[Federal Register Volume 63, Number 13 (Wednesday, January 21, 1998)]
[Notices]
[Pages 3129-3131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1360]


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FEDERAL TRADE COMMISSION

[File No. 942-3278]


Mega Systems International, Inc., et al.; Analysis To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before March 23, 1998.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pennsylvania Avenue, N.W., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
C. Steven Baker or Russell W. Damtoft, Federal Trade Commission, 
Chicago Regional Office, 55 East Monroe St., Suite 1860, Chicago, IL. 
60603. (312) 353-8156.

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 January 13, 1998), on the World Wide Web, at ``http.//<a href="http://www.ftc.gov/
os/actions/htm">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, 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 To Aid Public Comment

    The Federal Trade Commission has accepted an agreement, subject to 
final approval, to a proposed consent order from respondents Mega 
Systems International, Inc. and Jeffrey Salberg.
    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 and take other appropriate action or make 
final the agreement's proposed order.
    This matter concerns advertisements, including but not limited to 
infomercials, for five Mega Systems International products: Eden's 
Secret Nature's Purifying Product, Sable Hair Farming System, Kevin 
Trudeau's Mega Memory System, Dr. Callahan's Addiction Breaking System, 
and Jeanie Eller's Action Reading. This matter also concerns the 
deceptive format of the infomercials.
    The Commission's complaint charges that respondents made false and 
unsubstantiated claims that Eden's Secret Nature's Purifying Product 
(1) causes significant weight loss, (2) will prevent or cure illnesses, 
including but not limited to fatigue, headaches, depression, arthritis, 
insomnia, immune suppression, and premenstrual syndrome, (3) will 
cleanse the body of

[[Page 3130]]

harmful toxins, and (4) will purify the body's blood supply.
    The Commission's complaint also charges that respondents made false 
and unsubstantiated claims that Sable Hair Farming System (1) will 
stop, prevent, cure, relieve, reverse or reduce hair loss, (2) will 
promote the growth of hair where hair has already been lost, and (3) is 
superior to Rogaine and Minoxidil in stopping, preventing, curing, 
relieving, reversing or reducing hair loss. In addition, the 
Commission's complaint charges that respondents made the false claim 
that scientific studies demonstrate that Sable Hair Farming System is 
effective in stopping hair loss and promoting hair growth.
    The Commission's complaint also charges that respondents made the 
false and unsubstantiated claim that Kevin Trudeau's Mega Memory System 
will enable users to achieve a photographic memory, and the 
unsubstantiated claim that Kevin Trudeau's Mega Memory System is 
effective in causing adults or children with learning disabilities or 
attention deficit disorder to substantially improve their memory. In 
addition, the Commission's complaint charges that respondents made 
false claims that (1) scientific studies of Kevin Trudeau's Mega Memory 
System on seventh-grade students demonstrate that Kevin Trudeau's Mega 
Memory System will substantially improve their academic performance and 
grades, (2) scientific studies of Kevin Trudeau's Mega Memory System on 
blind children demonstrate that Kevin Trudeau's Mega Memory System will 
improve their recall ability to a level of 95% to 98%, (3) scientific 
studies of Kevin Trudeau's Mega Memory System on children with IQ's of 
fifty to sixty demonstrate that Kevin Trudeau's Mega Memory System will 
improve their recall ability to a level of almost 100%, and (4) 
scientific studies of Kevin Trudeau's Mega Memory System on children 
with attention deficit disorder demonstrate that Kevin Trudeau's Mega 
Memory System will substantially improve their memory.
    The Commission's complaint also charges that respondents made false 
and unsubstantiated claims that Dr. Callahan's Addiction Breaking 
System (1) reduces an individual's compulsive desire to eat, leading to 
significant weight loss, (2) reduces an individual's compulsive desire 
to eat, leading to significant weight loss without the need to diet or 
exercise, and (3) cures addictions and compulsions, including but not 
limited to, smoking, eating, and using alcohol or heroin. In addition, 
the Commission's complaint charges that respondents made the false 
claim that testimonials with regard to consumers' use of Dr. Callahan's 
Addiction Breaking System reflect the typical or ordinary experience of 
members of the public who use the product.
    The Commission's complaint also charges that respondents made 
unsubstantiated claims that Jeanie Eller's Action Reading is successful 
in teaching reading 100% of the time. Finally, the Commission's 
complaint charges that respondents deceptively represented that their 
infomercials were independent television programs and not paid 
commercial advertising.
    The proposed consent order contains provisions designed to remedy 
the violations charged and to prevent the respondent from engaging in 
similar acts and practices in the future. The proposed consent order 
prohibits the respondents from representing that Eden's Secret Nature's 
Purifying Product, or any substantially similar product, (1) causes 
significant weight loss, (2) prevents or cures illnesses, including but 
not limited to fatigue, headaches, depression, arthritis, insomnia, 
immune suppression, and premenstrual syndrome, (3) will cleanse the 
body of harmful toxins, or (4) will purify the body's blood supply.
    The proposed consent order also prohibits the respondents from 
representing that Sable Hair Farming System, or any substantially 
similar product, (1) will stop, prevent, cure, relieve, reverse or 
reduce hair loss, (2) will promote the growth of hair where hair has 
already been lost, or (3) is superior to Rogaine and Minoxidil in 
stopping, preventing, curing, relieving, reversing or reducing hair 
loss. In addition, the proposed consent order prohibits respondents 
from advertising, packaging, labeling, promoting, offering for sale, 
selling, or distributing any product that is represented as promoting 
hair growth or preventing hair loss, unless the product is the subject 
of an approved new drug application for such purpose under the Federal 
Food, Drug, and Cosmetic Act, 21 U.S.C. 301 et seq.
    The proposed consent order also prohibits the respondents from 
representing that Kevin Trudeau's Mega Memory System, or any 
substantially similar product, will enable users to achieve a 
photographic memory. In addition, the proposed consent order prohibits 
the respondents from representing that Kevin Trudeau's Mega Memory 
System, or any substantially similar product, is effective in causing 
adults or children with learning disabilities or attention deficit 
disorder to substantially improve their memory, unless, at the time the 
representation is made, respondents possess and rely upon competent and 
reliable evidence, which when appropriate must be competent and 
reliable scientific evidence, that substantiates the representation.
    The proposed consent order also prohibits the respondents from 
representing that Dr. Callahan's Addiction Breaking System, or any 
substantially similar product or program, (1) reduces an individual's 
compulsive desire to eat, leading to significant weight loss, (2) 
reduces an individual's compulsive desire to eat, leading to 
significant weight loss without the need to diet or exercise, or (3) 
cures addictions and compulsions, including but not limited to, 
smoking, eating, and using alcohol or heroin.
    The proposed consent order also prohibits the respondents from 
representing with respect to Jeanie Eller's Action Reading, or any 
other product or program that provides instruction in any aspect of 
reading, the extent to which individuals who use such product will 
learn to read or the success rate of individuals who use such product, 
unless the representation is substantiated.
    The proposed consent order also prohibits the respondents from (1) 
misrepresenting the existence, contents, validity, results, conclusions 
or interpretations of any test, study or research, (2) representing the 
benefits, performance or efficacy of any product or program, unless the 
representation is substantiated, and (3) representing that the 
experience represented by any user testimonial or endorsement of any 
product or program represents the typical or ordinary experience of the 
members of the public, unless the representation is substantiated or 
clearly and prominently qualified.
    In addition, the proposed consent order prohibits the respondents 
from creating, producing, selling or disseminating (1) any 
advertisement that misrepresents that it is not a paid advertisement, 
(2) any television commercial or other video advertisement fifteen 
minutes in length or longer that does not clearly and prominently 
disclose within the first thirty seconds and immediately before each 
presentation of ordering instructions that the program is a paid 
advertisement for the product or service, and (3) any radio commercial 
or other radio advertisement five minutes in length or longer that does 
not broadcast clearly an audibly within the first thirty seconds and 
immediately before each presentation of ordering instructions or

[[Page 3131]]

periodically through the program, but no more than approximately ten 
minutes apart that the program is a paid advertisement for the product 
or service.
    The proposed consent order also requires respondents to pay the 
Federal Trade Commission $500,000. The funds paid by the respondents 
shall, in the discretion of the Federal Trade Commission, be used to 
provide direct redress to consumers. If the Federal Trade Commission 
determines that consumer redress is impracticable or otherwise 
unwarranted, any funds not so used shall be paid to the United States 
Treasury.
    The remaining parts of the proposed consent order require the 
respondents (1) to maintain promotional and substantiation materials 
related to the claims covered by the order, (2) to deliver a copy of 
the order to all current and future principals, officers, directors, 
and managers, and deliver a summary of the order to all current and 
future employees, agents, and representatives having responsibilities 
with respect to the subject matter of this order, (3) to notify the 
Commission of any changes in the structure of the proposed corporate 
respondent, (4) to notify the Commission of any changes in employment 
of the individual respondent, and (5) to file one or more compliance 
reports.
    The purpose of this analysis is to facilitate public comment on the 
proposed consent order. 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. 98-1360 Filed 1-20-98; 8:45 am]
BILLING CODE 6750-01-M