Markets Wired

Two companies that market skin care and weight-loss products must stop making false or unsubstantiated deceptive claims about their products, under settlements resolving charges in two separate cases brought by the Federal Trade Commission.

In one case, the FTC challenged ads for DermaTend, a skin cream that was promoted for do-it-yourself removal of moles, skin tags, and warts, as well as Lipidryl, a supplement promoted for weight loss. In the second case, the agency challenged claims for Photodynamic Therapy anti-aging lotions, as well Shrinking Beauty, a supposed body-slimming lotion.

The FTC settlements in both cases prohibit the defendants from misleading consumers about the efficacy of their products and about whether their claims are backed by scientific evidence. In addition, the marketers of DermaTend and Lipidryl are required to disclose when people promoting the products are paid for their endorsement.

“These companies made outrageous claims that their products could provide a range of benefits – from removing warts to decreasing the appearance of cellulite to providing substantial weight loss,” said Jessica Rich, Director of the Bureau of Consumer Protection. “The common thread for all of these claims was the fundamental lack of scientific evidence. Consumers deserve better.”

DermaTend and Lipidryl

Aaron Lilly, a Nevada-based marketer, owns and operates both Solace International, Inc. and Bioscience Research Institute LLC, which sell DermaTend and Lipidryl, respectively. DermaTend was advertised in SkyMall (both the magazine and website), as well as on Amazon.com and eBay, and through Google AdWords. It was also sold on company-owned websites and marketed through affiliates.

According to the FTC’s complaint, DermaTend contains the botanical bloodroot and zinc chloride. A 1.7 ounce container of the “Original” formula sells for $39.95, while a 3.4 ounce container of “Ultra” sells for $69.95. Consumers who bought DermaTend also received an emery board and instructions directing consumers to file down their mole, skin tag, or wart with the emery board before applying the product.

The complaint alleges that DermaTend ads made false or unsubstantiated claims that the product worked in a very short amount of time, caused little or no scarring, and was safe (even for children). They also touted a “97 percent success rate.” The FTC also alleges that DermaTend ads touted “real user results” supposedly showing before and after photos of consumers who had success using the products, and written testimonials, without disclosing that reviewers were sometimes paid for their stories.

Bioscience, Lilly’s other company, charged $129.99 for a three-month supply of Lipidryl, which contains African mango seed extract. The FTC complaint charges that ads for Lipidryl falsely claimed that the supplement was clinically proven to cause substantial weight loss (such as 28 pounds in 10 weeks) and reduce users’ waistlines.

The FTC’s settlement order with Lilly and his companies requires that future claims for DermaTend and other products promoted for removing skin lesions be supported by high-quality human clinical testing. Future claims for Lipidryl or other weight-loss products must be supported by at least two well-done human clinical studies.

The order prohibits the defendants from making a number of specific unsubstantiated representations; requires disclosure if endorsers are provided with compensation; and requires monitoring of affiliate marketers. The order also requires the defendants to pay $402,338 and to provide the Commission with the proceeds from the sale of four homes in Texas.

DERMAdoctor, Inc.

According to the FTC’s complaint, DERMADoctor, Inc. and its majority owner, Audrey Kunin, M.D., violated the FTC Act by making deceptive claims about their anti-aging products and a body-slimming lotion. DERMAdoctor is based in Missouri and marketed Photodynamic Therapy Liquid Red Light Anti-Aging Lotion and Photodynamic Therapy Liquid Red Light Eye Lift Lotion, as well Shrinking Beauty, a “firming, sculpting & toning lotion with lobster weight loss inspired technology.”

The complaint states that since October 2010, the defendants have marketed and sold Photodynamic Therapy lotion with extract of the noni fruit, which was promoted as able to capture UV light and transform it into visible red light that has purported anti-aging effects on the skin. The defendants charged $85 for a one-ounce bottle of the face lotion. DERMAdoctor products are sold in retailers such as Nordstrom, Sephora, and Ulta, and according to the FTC, Photodynamic Therapy was advertised on QVC, the DERMAdoctor website, and in women’s magazines, including Cosmopolitan and Shape.

Since December 2012, the defendants also have marketed and sold Shrinking Beauty, with a retail price of $58 for a 5.5-ounce tube. Through ads in magazines such as Health and on the DERMAdoctor website, the defendants claimed the product would improve the appearance of cellulite, smooth and tighten skin, and that the results were “clinically proven to reduce measurements up to one inch in two weeks.”

The proposed settlement order with DERMAdoctor requires that the defendants have competent and reliable scientific evidence to support future anti-aging and cellulite-reduction claims, as well as at least two randomized, double-blind, placebo-controlled human clinical studies to support claims relating to weight loss or reduction of body size. It also prohibits them from misrepresenting the existence or results of any scientific test, study or research. The order requires payment of $12,675.

The Commission votes approving the complaints and proposed stipulated orders in both cases were 5-0. The complaint and proposed order in the Lilly case were filed in the U.S. District Court for the District of Nevada on December 10, 2014 and signed by the judge the next day The complaint and proposed order in the DERMAdoctor case were filed in the U.S. District Court for the Western District of Missouri, Western Division, on December 23, 2014.

In the course of its investigation into Solace International and Bioscience Research Institute, the FTC worked with the U.S. Food and Drug Administration (FDA), which issued a warning letter to Solace regarding its marketing of DermaTend, and law enforcers in 10 California counties. The National Advertising Division of the Better Business Bureaus referred this matter to the Commission.

Information for Consumers

When it comes to treatments for health and fitness, it can be tough to tell useful products and services from those that don’t work or aren’t safe. For more information, see the FTC’s guidance on Treatments & Cures and Weight Loss & Fitness.

The FTC is a member of the National Prevention Council, which provides coordination and leadership at the federal level regarding prevention, wellness, and health promotion practices. This case advances the National Prevention Strategy’s goal of increasing the number of Americans who are healthy at every stage of life.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. Stipulated orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.