[Federal Register Volume 62, Number 66 (Monday, April 7, 1997)]
[Notices]
[Pages 16586-16587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8800]


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FEDERAL TRADE COMMISSION

[File No. 962-3137]


Guildwood Direct Limited, Also d/b/a Intermed Laboratories; 
Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair or deceptive acts or practices and unfair methods of 
competition, this consent agreement, accepted subject to final 
Commission approval, would prohibit, among other things, the New York-
based company from representing that any product causes weight loss, 
with or without changes in diet or exercise, or provides any weight 
loss, fat loss, weight regulation, weight control or weight maintenance 
benefit, and from using the name ``Slimming Insoles'' or any other name 
in a manner that represents that any product causes weight loss unless 
the respondent possesses competent and reliable scientific evidence 
that substantiates the representation. The consent agreement also would 
prohibit the respondent from representing that Advance Bio/Natural 
Research Labs in a bona fide, independent research organization or from 
making any misrepresentations of the existence, contents, validity, 
results, conclusions or interpretations of any test, study or research 
or the existence, nature, purpose or activities of any organization. In 
addition, the consent agreement would require the respondent to pay, to 
purchasers of the Slimming Insoles, $40,000 for consumer redress or 
disgorgement, with that liability being suspended upon payment of 
$7,500 once the order becomes final.

DATES: Comments must be received on or before June 6, 1997.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:
Richard Cleland, FTC/H-482, Washington, D.C. 20580. (202) 326-3088.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of sixty (60) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home page 
(for March 25, 1997), on the World Wide Web, at   ``<a href="http://www.ftc.gov/
os/actions/htm">http://www.ftc.gov/
os/actions/htm</a>.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, N.W., 
Washington, D.C. 20580, either in person or by calling (202) 326-3627. 
Public comment is invited. Such comments or views will be considered by 
the Commission and will be available for inspection and copying at its 
principal office in accordance with Section 4.9(b)(6)(ii) of the 
Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from Guildwood Direct Limited (``respondent'').
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    The Commission's complaint in this matter charges respondent with 
deceptively advertising Slimming Insoles, insoles worn in the shoes 
that purportedly cause weight loss through ``reflexology,'' without 
changes in diet or exercise. According to advertisements for the 
product, the Slimming Insoles purportedly cause weight loss by 
massaging certain ``reflex points'' on the bottom of the foot during 
the course of a normal day's walking, thereby stimulating the body's 
digestive system to burn stored fat and cause weight loss. 
Advertisements for the product appeared in newspapers such as the 
Washington Post, New York Post, Denver Post and St. Louis Post, in 
newspaper inserts, in magazines such as American Women, Soap Opera 
Update and Woman's Own as well as in nationwide direct mailings.
    The complaint alleges that, through the product name ``Slimming 
Insoles'' and the advertisements, respondent made unsubstantiated 
representations that the Slimming Insoles cause significant weight loss 
and that the weight loss occurs without changes in diet or exercise. 
According to the complaint, the ads also claim, without

[[Page 16587]]

adequate substantiation, that testimonials from consumers appearing in 
the ads reflect the typical or ordinary experience of people who have 
used the product.
    The complaint also alleges that respondent falsely represented that 
scientific studies demonstrate that the Slimming Insoles cause 
significant weight loss without changes in diet or exercise. In 
addition, the complaint alleges that respondent falsely represented 
that an organization named Advanced Bio/Natural Research Labs is a bona 
fide, independent research organization that has published a report 
containing the results of valid, independent testing of the Slimming 
Insoles.
    The proposed consent order contains provisions designed to remedy 
the violations charged and to prevent respondent from engaging in 
similar acts and practices in the future.
    Part I of the order requires respondent to possess competent and 
reliable scientific evidence to support any claim that any product 
causes weight loss, with or without changes in diet or exercise, or 
provides any weight loss, fat loss, weight regulation, weight control 
or weight maintenance benefit. Part II prohibits respondent from using 
the name ``Slimming Insoles'' or any other name in a manner that 
represents that any product causes weight loss, unless respondent 
possesses competent and reliable scientific evidence that substantiates 
the representation.
    Part III prohibits respondent from claiming that the experience 
represented in any user-testimonial or endorsement of any food, dietary 
supplement, drug, device, or weight loss product or program represents 
the typical or ordinary experience of members of the public who use the 
product, unless, at the time, respondent possesses and relies upon 
competent and reliable scientific evidence substantiating the 
representation or respondent discloses, clearly and prominently, and in 
close proximity to the testimonial or endorsement, what the generally 
expected results would be or that consumers should not expect to 
experience similar results.
    Part IV prohibits respondent from representing that Advance Bio/
Natural Research Labs is a bona fide, independent research organization 
or that it has published a report containing the results of valid, 
independent testing of any product. Part V prohibits, in connection 
with the sale of any food, dietary supplement, drug, device or weight 
loss product or program, misrepresentations of the existence, contents, 
validity, results, conclusions or interpretations of any test, study or 
research or the existence, nature, purpose or activities of any 
organization.
    Part VI requires respondent to deposit $40,000 into an escrow 
account, which will be used by the Commission to provide either direct 
redress to purchasers of the Slimming Insoles or will be paid to the 
United States Treasury, if the Commission determines that direct 
redress to consumers is wholly or partially impracticable. The order 
suspends the full $40,000 liability, however, provided that respondent 
pays $7,500 to the Commission no later than the date the order becomes 
final. The full $40,000 becomes due, however, should respondent default 
in making the $7,500 payment. In addition, the Commission's acceptance 
of the order is expressly premised upon financial statements and 
related documents provided by the respondent, and the Commission 
reserves the right to re-open the proceeding to determine if the 
financial information provided by respondent contains any material 
misrepresentations or omissions. If the Commission determines that 
there are any material misrepresentations or omissions in the financial 
information provided, then the full $40,000 becomes due and payable.
    Parts VII through X relate to respondent's obligations to maintain 
and make available to the Commission certain records; to provide copies 
of the order to respondent's personnel; to notify the Commission of 
changes in corporate structure; and to file compliance reports with the 
Commission. Part XI provides that the order will terminate after twenty 
years, under certain circumstances.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 97-8800 Filed 4-4-97; 8:45 am]
BILLING CODE 6750-01-M