[Federal Register Volume 62, Number 66 (Monday, April 7, 1997)]
[Notices]
[Pages 16583-16584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8799]


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FEDERAL TRADE COMMISSION

[File No. 912-3220]


Dean Distributors, Inc., et al., d/b/a Advanced Health Systems, 
Cambridge Direct Sales, and Medibase; 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 require, among other things, the California-
based companies, which market low calorie and very low calorie diet 
(VLCD) programs, to possess a reasonable basis for any future claims 
regarding weight loss or weight loss maintenance, and to clearly and 
prominently disclose in any representation regarding the safety of 
respondent's VLCD diet programs that physician monitoring is required 
to minimize the potential for health risks, namely development of 
gallbladder disease.

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

ADDRESSES: Comments should be directed to: FTC/Office of Secretary, 
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
Walter Gross or J. Reilly Dolan, FTC/H-200, Washington, DC 20580. (202) 
326-3319 or 326-3292.

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, NW., 
Washington, DC 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 Dean Distributors, Inc., a corporation 
doing business as advanced Health Care Systems, Cambridge Direct Sales 
and Medibase. Proposed respondent markets low calorie and very low 
calorie diet programs through a multi-level distribution system and 
directly to independent physicians.
    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 will decide whether it should withdraw from the agreement 
or make final the agreement's proposed order.
    The Commission has alleged that proposed respondent has made false 
and unsubstantiated claims in its advertising, promotional and sales 
materials that are likely to mislead consumers as to: (1) the 
likelihood of success in achieving and maintaining weight reduction; 
and (2) the health risk associated with rapid weight loss. Proposed 
respondent has represented, through consumer endorsements, that its 
diet programs produce successful results. The consumers featured in 
these testimonials purportedly achieved remarkable success in reaching 
a desired weight, and in changing their appearance. Through these 
consumer endorsements, proposed respondent has represented that he 
success achieved by such consumers in reaching their weight loss goal 
reflects the typical or ordinary experiences of participants of 
respondent's weight loss programs. The Commission has alleged that 
proposed respondent had failed to substantiate the claim that the 
weight loss success experienced by persons featured in these 
testimonial advertisements is representative of what consumers will 
generally achieve with the products.

[[Page 16584]]

    The Commission has also alleged that proposed respondent has 
represented that the typical consumer of its products and services is 
successful in maintaining achieved weight loss, or, at a minimum, a 
substantial portion of achieved weight loss, over time. Proposed 
respondent has not provided adequate substantiation to support 
representations regarding the long-term effectiveness of the weight 
loss products and programs. Furthermore, according to the Commission's 
complaint, proposed respondent has represented that its maintenance 
claims were based in part upon a valid statistical analysis of its 
customers. However, the Commission has alleged that the analysis in 
question was not based upon a valid statistical sample of proposed 
respondent's customers.
    Finally, the Commission has alleged that proposed respondent has 
represented that its physician monitored very-low-calorie diet programs 
are free of serious health risks without disclosing that physician 
monitoring is necessary to minimize the risk of serious health 
complications associated with very-low calorie diet programs. Further 
the Commission has alleged that in materials prepared specifically for 
physicians of patients using the very-low-calorie diets, proposed 
respondent failed to list serious adverse heath complications that have 
been associated with very-low-calorie diets.
    The proposed consent order seeks to address the alleged 
misrepresentations cited in the accompanying complaint by requiring 
proposed respondents to possess a reasonable basis for any future 
claims regarding weight loss or weight loss maintenance. The proposed 
consent order also requires proposed respondent to clearly and 
prominently disclose in any representation regarding the safety of 
respondent's VLCD diet programs that physician monitoring is required 
to minimize the potential for health risks, namely development of 
gallbladder disease.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and 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. 97-8799 Filed 4-4-97; 8:45 am]
BILLING CODE 6750-01-M