[Senate Hearing 113-547]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 113-547

                    PROTECTING CONSUMERS FROM FALSE
                       AND DECEPTIVE ADVERTISING
                        OF WEIGHT-LOSS PRODUCTS

=======================================================================

                                HEARING

                               before the

   SUBCOMMITTEE ON CONSUMER PROTECTION, PRODUCT SAFETY, AND INSURANCE

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 17, 2014

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation





                  U.S. GOVERNMENT PUBLISHING OFFICE
92-998                    WASHINGTON : 2015
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
BARBARA BOXER, California            JOHN THUNE, South Dakota, Ranking
BILL NELSON, Florida                 ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington           ROY BLUNT, Missouri
MARK PRYOR, Arkansas                 MARCO RUBIO, Florida
CLAIRE McCASKILL, Missouri           KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota             DEAN HELLER, Nevada
MARK BEGICH, Alaska                  DAN COATS, Indiana
RICHARD BLUMENTHAL, Connecticut      TIM SCOTT, South Carolina
BRIAN SCHATZ, Hawaii                 TED CRUZ, Texas
ED MARKEY, Massachusetts             DEB FISCHER, Nebraska
CORY BOOKER, New Jersey              RON JOHNSON, Wisconsin
JOHN E. WALSH, Montana
                    Ellen L. Doneski, Staff Director
                     John Williams, General Counsel
              David Schwietert, Republican Staff Director
              Nick Rossi, Republican Deputy Staff Director
   Rebecca Seidel, Republican General Counsel and Chief Investigator
                                 ------                                

         SUBCOMMITTEE ON CONSUMER PROTECTION, PRODUCT SAFETY, 
                             AND INSURANCE

CLAIRE McCASKILL, Missouri,          DEAN HELLER, Nevada, Ranking 
    Chairman                             Member
BARBARA BOXER, California            ROY BLUNT, Missouri
MARK PRYOR, Arkansas                 KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota             DAN COATS, Indiana
RICHARD BLUMENTHAL, Connecticut      TED CRUZ, Texas
BRIAN SCHATZ, Hawaii                 DEB FISCHER, Nebraska
CORY BOOKER, New Jersey
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 17, 2014....................................     1
Statement of Senator McCaskill...................................     1
Statement of Senator Heller......................................     3
Statement of Senator Nelson......................................     4
Statement of Senator Klobuchar...................................    70
Statement of Senator Blumenthal..................................    79

                               Witnesses

Mary Koelbel Engle, Associate Director, Division of Advertising 
  Practices, Bureau of Consumer Protection, Federal Trade 
  Commission.....................................................     5
    Prepared statement...........................................     7
Dr. Mehmet C. Oz, Vice Chairman and Professor of Surgery, 
  Columbia University College of Physicians and Surgeons; Host, 
  The Dr. Oz Show................................................    11
    Prepared statement...........................................    13
C. Lee Peeler, President and Chief Executive Officer, Advertising 
  Self-Regulatory Council; Executive Vice President, Advertising 
  Self-Regulation, Council of Better Business Bureaus............    31
    Prepared statement...........................................    33
Steven M. Mister, President and Chief Executive Officer, Council 
  for Responsible Nutrition......................................    44
    Prepared statement...........................................    46
Robert H. Haralson IV, Executive Director, TrustInAds.org........    49
    Prepared statement...........................................    51
Daniel Fabricant, Ph.D., Chief Executive Officer and Executive 
  Director, Natural Products Association.........................    61
    Prepared statement...........................................    63

                                Appendix

Written Testimony of the Electronic Retailing Association 
  submitted by Julie Coons, President and CEO and Bill McClellan, 
  Vice President, Government Affairs.............................    83
Response to written questions submitted by Hon. Dean Heller to 
  Mary Koelbel Engle.............................................    84

 
                    PROTECTING CONSUMERS FROM FALSE

                       AND DECEPTIVE ADVERTISING

                        OF WEIGHT-LOSS PRODUCTS

                              ----------                              


                         TUESDAY, JUNE 17, 2014

                               U.S. Senate,
      Subcommittee on Consumer Protection, Product 
                             Safety, and Insurance,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:35 a.m., in 
room SR-253, Russell Senate Office Building, Hon. Claire 
McCaskill, Chairman of the Subcommittee, presiding.

          OPENING STATEMENT OF HON. CLAIRE McCASKILL, 
                   U.S. SENATOR FROM MISSOURI

    Senator McCaskill. This hearing will now come to order.
    We have all heard and seen the ads promising quick and 
substantial weight loss if only you take this pill, drink this 
shake, use this device, or apply this cream--all without 
adjusting diet or increasing physical activity. It seems too 
good to be true, and, of course, it is.
    We have a short clip of some of these ads--that have run on 
television, satellite radio, online, and in print--that I'm 
going to play so it is clear what we are talking about today. 
And it will appear in a moment.
    [Video presentation.]
    Senator McCaskill. We also had a satellite radio ad I 
thought we were going to play--there are lots of terrible ads 
on satellite radio.
    It's easy to understand why so many consumers are willing 
to take a chance, ignore their instincts, and believe 
suspicious claims like these. According to the most recent data 
from the Centers of Disease Control and Prevention, more than 
one-third of American adults are obese, and 70 percent are 
either obese or overweight.
    This familiar story of the obesity epidemic is further 
colored by surveys finding a desire among Americans to lose 
weight, but consistently failing to put in the effort to do so. 
In 2013, a Gallup survey showed that 51 percent of adults 
wanted to lose weight, while just 25 percent said they were 
seriously working toward that goal.
    This mismatch between Americans' stated desire to shed 
weight and their lack of serious effort can perhaps explain the 
growth of the U.S. weight-loss industry, as well as the 
proliferation of false and deceptive advertising for weight-
loss products. With so many Americans desperate for anything 
that might make it easier to lose weight, it's no wonder scam 
artists and fraudsters have turned to the $60-billion weight-
loss market to make a quick buck.
    Sadly, this is not a new problem. The Federal Trade 
Commission filed its first weight-loss case in 1927. McGowan's 
Reducine claimed in True Romance magazine that, quote, ``Excess 
fat is literally dissolved away, leaving the figure slim and 
properly rounded, giving the lithe grace to the body every man 
and woman desires.''
    Since 1927, the FTC has filed more than 250 cases 
challenging false and unproven weight-loss claims, including, 
just this year, four settlements announced in January and, last 
month, a complaint filed in Federal court against the sellers 
of, in fact, a green coffee bean dietary supplement. More than 
one in ten fraud claims submitted to the FTC are, in fact, for 
weight-loss products.
    But, the problem is much larger than any enforcement agency 
could possibly tackle on its own. Private stakeholders, 
companies that sell weight-loss products, media outlets, and 
other advertising platforms, as well as consumer watchdogs, 
must all do their part to help address this problem.
    Media outlets and advertising platforms, in particular, 
serve as a critical gatekeeper that are well positioned to keep 
false and deceptive advertising from reaching consumers. I 
appreciate TrustInAds.org, which represents some of the largest 
online advertising platforms, being here today to discuss their 
recent report on this issue, the challenges online companies 
face in addressing false and deceptive advertising, and what 
more they can do.
    But, the problem is not limited to the Internet. In 
preparing for this hearing, my staff reached out to a variety 
of media companies across all mediums to better understand 
industry practices in screening and monitoring advertising. I 
find it troubling that broadcast and satellite radio witnesses 
who were asked to be here today were unwilling to appear. To 
me, this indicates there is either something to hide or they 
don't have a good story to tell. Either way, we will not be 
effective in addressing this problem until all stakeholders 
take it seriously.
    Like in virtually any other industry, there are good actors 
and bad actors. We will hear today from the Council for 
Responsible Nutrition, a trade association for the dietary 
supplement industry, and the Better Business Bureaus' 
Advertising Self-Regulatory Council about the industry's 
efforts to police itself.
    We will also hear today from Dr. Mehmet Oz. He offers a 
unique perspective of being both a medical doctor and the host 
of a very popular daytime show that frequently airs segments on 
weight-loss issues and products, and that is frequently cited 
in the false-and-deceptive advertisements used to market 
questionable weight-loss products.
    Dr. Oz, I will have some tough questions for you today 
about your role, intentional or not, in perpetuating these 
scams. When you feature a product on your show, it creates what 
has become known as ``The Oz Effect,'' dramatically boosting 
sales and driving scam artists to pop up overnight, using false 
and deceptive ads to sell questionable products.
    While I understand that your message is also focused on 
basics, like healthy eating and exercise, I'm concerned that 
you are melding medical advice, news, and entertainment in a 
way that harms consumers.
    This subcommittee has looked at a number of scams affecting 
consumers. In most other cases, the scams resulted in financial 
losses, which can certainly be devastating. But, what makes 
weight-loss scams really stand out is that they not only result 
in financial losses, but can potentially put a consumer's 
health at risk.
    I hope to hear suggestions today about how we can better 
empower consumers with the tools and knowledge needed to not 
fall victim to weight-loss scams and what more stakeholders can 
and should be doing to keep false and deceptive weight-loss ads 
from reaching consumers in the first place.
    I look forward to hearing from all of our witnesses today, 
and I thank you all very much for being here.
    Senator Heller.

                STATEMENT OF HON. DEAN HELLER, 
                    U.S. SENATOR FROM NEVADA

    Senator Heller. Thank you. Thank you, Madam Chairman, for 
holding this hearing regarding the weight-loss industry.
    I want to thank all our witnesses for taking time for being 
here also.
    We all know that weight management is of interest to many 
Americans. I probably should add ``politicians'' to that, too. 
But, it's no surprise that the market is quite significant, 
totaling 60.5 billion in 2013, alone, in one estimate. I can 
understand the appeal these products have for many who are 
attempting to improve their health and lifestyles.
    It seems to me, that many, and perhaps even most of these 
products and services are legitimate, making responsible, 
substantiated representation about health benefits and other 
claims. But, like any other marketplace, there are bad actors 
in this space who make widely erroneous claims about 
questionable products. There are also fraudsters and those who 
seize upon dieting fads and work to scam vulnerable members of 
our population.
    I strongly believe the key to healthy weight loss is a 
combination of diet and exercise. I personally would be suspect 
of a magic weight-loss cure or a miracle pill. That being said, 
I can understand how a person may question their own 
assumptions when someone who they believe has credibility on 
the issue makes a claim about any particular product.
    That's why I'm pleased we're here--joined today by Ms. Mary 
Engle, who is the Associate Director of the Division of 
Advertising Practices within the FTC Bureau of Consumer 
Protection. I applaud the FTC's work to shut down the scam 
artists, and I look forward to learning more about the 
Commission's success this year in bringing a series of cases 
under the agency's existing Section 5 authority against a 
number of companies engaged in deceptive advertising of weight-
loss products.
    I also look forward to hearing her thoughts about how the 
Commission is applying its ``reasonable basis'' standard for 
substantiating health claims, including weight loss, and what 
it considers to be competent and reliable scientific evidence 
to back certain claims.
    While this standard has traditionally been a flexible one, 
it's no secret that the FTC has pursued more stringent 
requirements in recent consent decrees. It's an open question 
as to who these new substantiation requirements are meant to 
apply, where the FTC has followed its own procedural 
requirements in applying new standards, and whether the 
standard is consistent with constitutional protection of free 
speech.
    I'd also like to welcome Dr. Oz here today. The Dr. Oz Show 
debuted in 2009, and reaches roughly 3 million viewers every 
day. I look forward to hearing from Dr. Oz on what steps he has 
taken to ensure that the information he shares, and 
conversation he moderates provides accurate claims.
    We are informed that Dr. Oz does not endorse particular 
products, and he has been the subject of unscrupulous entities 
using his image in advertising without his permission. However, 
much has been written about the so-called ``Dr. Oz effect,'' 
whereby demands for products and ingredients spike after they 
are featured on his show.
    When the celebrity doctor mentioned ``Neti Pots,'' for 
example, sales for the product rose by 12,000 percent and 
Internet searches for the device rose by 42,000 percent. It is 
this popularity that may have influenced a Florida-based 
company to enter the market in green coffee bean extraction, an 
ingredient that Dr. Oz referred to as a ``magic weight-loss 
cure'' and a ``miracle pill'' that can burn fat fast. This 
company is now the subject of an enforcement action brought by 
the FTC that is currently pending in Federal District Court in 
Florida for unfair and deceptive claims with regard to this 
product.
    I would also like to welcome our other witnesses: Mr. Lee 
Peeler, for Better Business Bureau; Mr. Steven Mister, of the 
Council for Responsible Nutrition; Mr. Rob Haralson, of 
TrustInAds.org; and Dr. Daniel Fabricant, of the Natural 
Products Association. I thank all of you for taking time to be 
here today.
    And thank you, again, Madam Chairman, for holding this 
hearing. I look forward to our testimonies and answers to some 
of our questions.
    Senator McCaskill. Great.
    Would you like to say a word?

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. No, thank you.
    Senator McCaskill. I think that my colleague just did a 
great job of introducing everyone, so I'll do this quickly. Ms. 
Mary Koelbel Engle is the Associate Director of Division of 
Advertising Practices, Bureau of Consumer Protection at the 
Federal Trade Commission, here in Washington. Dr. Mehmet Oz, 
Vice Chairman and Professor of Surgery, Columbia University 
College of Physicians and Surgeons, and host of The Dr. Oz 
Show. Mr. C. Lee. Peeler, President and CEO of Advertising 
Self-Regulatory Council, Executive Vice President, Council of 
Better Business Bureaus, from New York. Mr. Steven Mister--is 
it ``Mister'' or ``Myster''?
    Mr. Mister. Mister.
    Senator McCaskill. Mister. Mr. Steven Mister, President and 
CEO, Council for Responsible Nutrition, based here in 
Washington. Mr. Robert Hatton Haralson IV, Executive Director, 
TrustInAds.org; and Dr. Daniel Fabricant, Executive Director 
and CEO, Natural Products Association.
    And we will begin with your testimony. We will have you on 
a clock, which I'm sure you understand--I know you understand, 
Dr. Oz, about the clock--but, we are not strict about that. If 
you feel the need to go over by a few moments, we will not have 
a problem. And keep in mind, the entirety of any written 
testimony you would like to submit will be included in the 
official record.
    Welcome, Ms. Engle.

           STATEMENT OF MARY KOELBEL ENGLE, ASSOCIATE

DIRECTOR, DIVISION OF ADVERTISING PRACTICES, BUREAU OF CONSUMER 
              PROTECTION, FEDERAL TRADE COMMISSION

    Ms. Engle. Good morning. Madam Chair and members of the 
Committee, I am Mary Engle, Associate Director for Advertising 
Practices at the Federal Trade Commission. I am pleased to have 
this opportunity to provide information regarding the FTC's 
efforts to combat fraudulent weight-loss advertising.
    As you know, the United States is facing an obesity 
epidemic. Nearly 70 percent of U.S. adults are overweight or 
obese. Excess weight and obesity are major contributors to 
chronic diseases and healthcare costs, and present a serious 
public health challenge. So, it isn't surprising that there is 
strong interest in products that claim to promote weight loss. 
Unfortunately, where there is strong consumer interest, fraud 
often follows. In the FTC's 2011 Survey of Consumer Fraud, we 
found that more consumers were victims of fraudulent weight-
loss products than of any of the other specific frauds that we 
surveyed.
    Despite the continuing boom in the weight-loss industry, 
there exists very little scientific evidence that pills and 
supplements alone can help one lose a significant amount of 
weight. Scientists agree that the foundation of successful 
weight loss is to eat a healthful, calorie-controlled diet, and 
increase physical activity. Products that promote fast and easy 
weight loss without changes to diet or lifestyle deter 
consumers from making these tough but necessary changes.
    As was mentioned, the Commission filed its first weight-
loss case way back in 1927, and, since then, we have filed 
another 250 cases challenging false and unproven weight-loss 
claims. In the past 10 years, the Commission has brought 82 law 
enforcement actions challenging false or unsubstantiated claims 
about the effectiveness of a wide variety of weight-loss 
products and services. Since 2010 alone, the Commission has 
collected nearly $107 million in consumer restitution for 
deceptive weight-loss claims.
    Our recent cases highlight how the agency has focused its 
enforcement priorities on large national advertising campaigns 
for a creative range of weight-loss products with unproven 
benefits. Operation Failed Resolution, announced right after 
the new year, targeted the newest weight-loss fads with popular 
ingredients: food additives, human hormones, skin creams, and 
acai berries. In one Failed Resolution case, consumers were 
catchily urged to ``shake their Sensa'' and lose 30, 40, 90 
pounds or more without dieting or exercise. In another, 
consumers were urged to rub in L'Occitane's almond shaping 
creams, touted as having body-slimming capacities that could 
trim inches in weeks. In a third, consumers with a taste for 
the rare might try liquid homeopathic HCG drops, made from a 
diluted form of human hormone, to lose a pound a day. Each of 
these cases resulted in a settlement with the FTC. The 
companies were ordered to pay consumer redress and to back any 
future weight-loss claims with well-conducted human clinical 
studies.
    Despite this long history of FTC enforcement, weight-loss 
fraud persists. This is because it's an area where consumers 
are particularly vulnerable to fraud. There's an enormous 
amount of money to be made. And people intent on committing 
fraud will gravitate toward where the money is.
    We have recently noted some disturbing developments with 
respect to weight-loss advertising. First is the reliance on 
proprietary studies using erroneous or even fabricated data. 
This was true in our case against Sensa and in our earlier case 
involving Skechers toning shoes. These kinds of practices add a 
layer of complexity to our weight-loss investigations.
    A second trend is the appearance of weight-loss fads in 
mainstream media, supported by trusted spokespeople. Our 
pending case against NPB Advertising shows how the marketers of 
the Pure Green Coffee dietary supplement capitalized on Dr. Oz 
having featured green coffee bean extract on his show and 
calling it ``magic'' and ``a miracle.''
    When consumers see products or ingredients marketed in 
sophisticated ways on respected media outlets or praised by 
hosts they trust, it can be difficult for them to listen to 
their internal voices telling them to beware. That is why we 
have long sought the partnership of the media to screen 
deceptive diet ads before they run. Our recently issued Gut 
Check Reference Guide, sent to media outlets throughout the 
country, advises the media on seven weight-loss claims that 
experts say simply cannot be true, and that the media should 
think twice about before running.
    Finally, we recognize that consumers are the first line of 
defense against weight-loss fraud. The FTC has developed a full 
arsenal of consumer educational materials, ranging from 
traditional publications that lay out the facts for consumers 
to online teaser websites. And today we launched a new 
interactive online consumer quiz.
    I want to thank the Committee for focusing attention on 
weight-loss scams and for giving the FTC an opportunity to 
describe its role. While we may never eliminate weight-loss 
fraud, we will continue our efforts to pursue the perpetrators, 
work with the media to help prevent fraudulent ads from 
running, and educate consumers that trusting their gut instinct 
can be a strong protective mechanism.
    Thank you, and I'd be happy to respond to any questions.
    [The prepared statement of Ms. Engle follows:]

Prepared Statement of Mary Koelbel Engle, Associate Director, Division 
of Advertising Practices, Bureau of Consumer Protection, Federal Trade 
                               Commission
I. Introduction
    Madame Chair and members of the Committee, I am Mary Engle, 
Associate Director for Advertising Practices at the Federal Trade 
Commission (``FTC'' or ``Commission''). I am pleased to have this 
opportunity to provide information concerning the Commission's efforts 
to combat fraudulent and deceptive claims for weight-loss products.\1\
---------------------------------------------------------------------------
    \1\ The written statement presents the views of the Federal Trade 
Commission. Oral testimony and responses to questions reflect my views 
and do not necessarily reflect the views of the Commission or any 
Commissioner.
---------------------------------------------------------------------------
    As has been reported for years, the United States is facing an 
obesity epidemic. More than one-third of U.S. adults (34.9 percent) are 
obese.\2\ Combined with those who are overweight, the percentage 
skyrockets to nearly 70 percent.\3\ Excess weight and obesity are major 
contributors to chronic diseases and present a serious public health 
challenge--the medical costs of obesity reached a staggering $147 
billion in 2008, and the estimated annual medical costs of obese 
persons are nearly $1,500 higher than for those of normal weight.\4\
---------------------------------------------------------------------------
    \2\ Cynthia Ogden, Margaret Carroll, ``Prevalence of Childhood and 
Adult Obesity in the United States, 2011-2012,'' Journal of American 
Medicine, 311(8):806-814 (2014).
    \3\ ``Weight Loss Services in the U.S. Industry Market Research 
Report from IBISWorld Has Been Updated,'' IBISWorld (Jan. 14, 2014), 
available at http://www.prweb.com/releases/2014/01/prweb11486414.htm; 
Cynthia Ogden, Margaret Carroll, ``Prevalence of Overweight, Obesity, 
and Extreme Obesity Among Adults: United States, Trends 1960-1962 
Through 2007-2008'' (2010).
    \4\ Eric Finkelstein et al., ``Annual Medical Spending Attributable 
To Obesity: Payer-And Service-Specific Estimates,'' Health Affairs, 28, 
no. 5 (2009):w822-w831 (Jul. 27, 2009), available at http://
content.healthaffairs.org/content/28/5/w822.full.pdf+html.
---------------------------------------------------------------------------
    Last year, Americans were expected to spend $2.4 billion on weight-
loss services,\5\ and this figure is predicted to rise to $2.7 billion 
by 2018.\6\ Where there is strong consumer interest, unfortunately 
fraud often follows. In our 2011 survey of consumer fraud, the FTC 
reported that more consumers were victims of fraudulent weight-loss 
products than of any of the other specific frauds covered by the 
survey.\7\
---------------------------------------------------------------------------
    \5\ ``Weight Loss Services in the U.S. Industry Market Research 
Report From IBISWorld Has Been Updated,'' IBISWorld (July 22, 2013), 
available at http://www.prweb.com/releases/2013/7/prweb10948232.htm.
    \6\ Id.
    \7\ FED. TRADE COMM'N STAFF REPORT, CONSUMER FRAUD IN THE UNITED 
STATES, 2011: THE THIRD FTC SURVEY (2013), at 17, available at http://
www.ftc.gov/sites/default/files/documents/reports/consumer-fraud-
united-states-2011-third-ftc-survey/130419fraudsurvey
_0.pdf.
---------------------------------------------------------------------------
    Scientists agree that the foundation of healthy, successful weight 
loss is to eat a healthful, calorie-controlled diet and to increase 
physical activity.\8\ They also agree that even proven medications for 
weight loss should only be prescribed as an adjunct to lifestyle 
changes in order help certain patients adhere more consistently to a 
lower calorie diet.\9\ Despite the continuing boom in the weight-loss 
industry, there exists very little scientific evidence that pills or 
supplements alone will cause sustained, meaningful weight loss. 
Moreover, the promise of fast or easy weight loss without changes to 
diet and lifestyle is especially pernicious because it may deter 
consumers from making the tough but necessary changes that are known to 
work.
---------------------------------------------------------------------------
    \8\ See Mayo Clinic Staff, ``Weight Loss: Strategies for Success 
(Make your weight-loss goals a reality. Follow these proven 
strategies)'' (Feb. 26, 2014), available at http://www.mayo
clinic.org/healthy-living/weight-loss/in-depth/weight-loss/art-20047752 
(``Hundreds of fad diets, weight-loss programs and outright scams 
promise quick and easy weight loss. However, the foundation of 
successful weight loss remains a healthy, calorie-controlled diet 
combined with exercise. For successful, long-term weight loss, you must 
make permanent changes in your lifestyle and health habits''); see also 
2013 AHA/ACC/TOS Guideline for the Management of Overweight and Obesity 
in Adults: A Report of the American College of Cardiology/American 
Heart Association Task Force on Practice Guidelines and The Obesity 
Society (Nov. 12, 2013) (Accepted Article), at 20, Box 9, available at 
http://onlinelibrary.wiley.com/doi/10.1002/oby.20660/pdf (``Recommended 
methods for weight loss: Weight loss requires creating an energy 
deficit through caloric restriction, physical activity, or both. An 
energy deficit of ≥500 kcal/day typically may be achieved with 
dietary intake of 1,200 to 1,500 kcal/day for women and 1,500 to 1,800 
kcal/day for men'').
    \9\ See 2013 AHA/ACC/TOS Guideline for the Management of Overweight 
and Obesity in Adults, supra note 8, at 21, Boxes 10-12.
---------------------------------------------------------------------------
    Today I will provide an overview of the Commission's multi-faceted 
program aimed at combating fraud and deception in the weight-loss 
industry. I will first speak about the Commission's law enforcement 
program, then will explain our media outreach efforts, and finally, 
will talk about the importance of consumer education.
    You might be surprised to learn that the Commission filed its first 
weight-loss case back in 1927; since then, we have filed hundreds of 
cases challenging false and unproven weight-loss claims. As the 
Commission staff stated in its 2002 Weight Loss Report, there exists 
``a never-ending quest for easy solutions.'' \10\ The endless flood of 
unfounded claims being made in the weight-loss industry vividly 
illustrates the challenges we, and consumers, are up against.
---------------------------------------------------------------------------
    \10\ FED. TRADE COMM'N STAFF REPORT, WEIGHT-LOSS ADVERTISING: AN 
ANALYSIS OF CURRENT TRENDS (2002), available at http://www.ftc.gov/
news-events/press-releases/2002/09/ftc-releases-report-weight-loss-
advertising.
---------------------------------------------------------------------------
    Why, then, with such a long history of enforcement in this area, 
does weight-loss fraud persist? Unfortunately, there is no perfect 
answer. What we do know is that this is an area where consumers looking 
for a solution are particularly vulnerable to fraud; that there is an 
enormous amount of money to be made in the diet industry; and that 
people intent on committing fraud will gravitate toward where the money 
is.\11\ While we might never eliminate weight-loss fraud, we will 
continue our efforts to pursue the perpetrators, to work with the media 
to help prevent fraudulent ads from airing, and to educate consumers on 
avoiding weight-loss scams.
---------------------------------------------------------------------------
    \11\ See Frank Bruni, ``Diet Lures and Diet Lies'' The New York 
Times (May 26, 2014), available at http://www.nytimes.com/2014/05/27/
opinion/bruni-diet-lures-and-diet-lies.html?_r=0. (``Enhanced education 
and growing sophistication haven't done away with fads. There's still 
too much favor to be curried and money to be made by trumpeting 
them.'').
---------------------------------------------------------------------------
II. The FTC's Weight-Loss Fraud Prevention Program
    In the past ten years, the Commission has brought 82 law 
enforcement actions challenging false or unsubstantiated claims about 
the efficacy of a wide variety of weight-loss products and services. 
Since 2010 alone, the Commission has collected nearly $107 million in 
consumer restitution for deceptive weight-loss claims, and one weight-
loss company paid a civil penalty of $3.7 million for violations of a 
prior Commission order.\12\
---------------------------------------------------------------------------
    \12\ U.S. v. Jason Pharmaceuticals, No. 12-1476 (D.D.C., filed 
Sept. 7, 2012).
---------------------------------------------------------------------------
    Our recent cases highlight how the agency has focused its 
enforcement priorities on large national advertising campaigns for a 
range of weight-loss products with unproven benefits. ``Operation 
Failed Resolution,'' announced in January, targeted the newest weight-
loss fads with popular ingredients--food additives, human hormones, 
skin creams, and acai berries.\13\
---------------------------------------------------------------------------
    \13\ See Fed. Trade Comm'n Press Release, Sensa and Three Other 
Marketers of Fad Weight-Loss Products Settle FTC Charges in Crackdown 
on Deceptive Advertising: Sensa to Pay $26.5 Million for Consumer 
Refunds (Jan. 7, 2014), http://www.ftc.gov/news-events/press-releases/
2014/01/sensa-three-other-marketers-fad-weight-loss-products-settle-
ftc.
---------------------------------------------------------------------------
    In our case against Sensa Products, consumers were catchily urged 
to ``shake their Sensa'' and lose 30, 40, 90 pounds or more without 
dieting or exercise.\14\ We alleged that the defendants' powdered food 
additive, available in twelve flavors, was deceptively advertised to 
enhance food's smell and taste, making users feel full faster so they 
eat less and lose weight. Our consent order required Sensa to pay $26.5 
million in redress; this money will be returned to consumers. The 
settlement also bars the defendants from making weight-loss claims 
about dietary supplements, foods, or drugs unless they have well-
controlled human clinical studies supporting the claims, and it 
requires them to disclose any material connections with product 
endorsers or anyone participating in or conducting a study of such 
products.
---------------------------------------------------------------------------
    \14\ FTC v. Sensa Products LLC, No. 14-cv-72 (N.D. Ill., filed Jan. 
7, 2014).
---------------------------------------------------------------------------
    The FTC's case against L'Occitane arose from that company's 
marketing of the Almond Beautiful Shape and Almond Shaping Delight 
creams, which it touted as having body slimming capabilities that could 
trim inches in weeks.\15\ The Commission's settlement with L'Occitane 
bars the company from claiming that any product applied to the skin 
causes substantial weight or fat loss or a substantial reduction in 
body size, and also requires well-controlled human clinical studies for 
claims that drugs or cosmetics cause such results. L'Occitane paid 
$450,000 in consumer redress as part of its settlement with the FTC.
---------------------------------------------------------------------------
    \15\ L'Occitane, Inc., FTC Dkt. No. C-4445 (Mar. 27, 2014), 
available at http://www.ftc.gov/system/files/documents/cases/
140408loccitanedo.pdf.
---------------------------------------------------------------------------
    The Commission also filed a case against HCG Diet Direct in 
connection with its sale of liquid homeopathic drops, which contain a 
diluted form of hCG, a hormone produced by the human placenta.\16\ 
Users were told they could lose up to one pound a day by placing the 
drops under their tongues before meals and adhering to a very low 
calorie diet. The Commission's consent order with HCG Diet Direct 
requires well-controlled human clinical studies; bars the defendants 
from representing that a product is FDA-approved when it is not, and 
from failing to disclose any material connections endorsers might have 
to the defendants; and imposes a $3.2 million judgment.\17\
---------------------------------------------------------------------------
    \16\ FTC v. HCG Diet Direct LLC, No. 14-cv-00015-NVW (D. Ariz., 
filed Jan. 6, 2014).
    \17\ The FTC's case against HCG Diet Direct followed on a set of 
warning letters the agency staff co-issued in 2011 with staff of the 
Food and Drug Administration (``FDA'') to marketers of homeopathic hCG 
weight-loss products. The letters warned that the marketers were making 
unapproved new drug claims in violation of the Federal Food, Drug, and 
Cosmetic Act, and unsubstantiated claims in violation of the FTC Act. 
They also stated that the hCG products are misbranded prescription 
drugs. See sample warning letter from Mary K. Engle, Associate Director 
for Advertising Practices (FTC), and Ilisa B.G. Bernstein, Acting 
Director, Office of Compliance, Center for Drug Evaluation and Research 
(FDA) (Nov. 28, 2011), available at http://www.ftc.gov/sites/default/
files/documents/public_statements/joint-fda/ftc-warning-letter-
concerning-product-labeling-human-chrorionic-gonadotropin-hcg-drugs/
ucm281528.pdf.
---------------------------------------------------------------------------
    The Commission currently remains in active litigation against a 
number of other defendants hawking miracle weight-loss products.\18\
---------------------------------------------------------------------------
    \18\ FTC v. HCG Platinum, No. 13-cv-02215-HRH (D. Ariz., filed Oct. 
30, 2013); FTC v. LeanSpa LLC, 3:11-cv-01715-JCH (D. Conn., filed Nov. 
7, 2011).
---------------------------------------------------------------------------
    The Commission has noted several disturbing developments with 
respect to weight-loss advertising. First is the reliance on 
proprietary studies using erroneous or fabricated data. In response to 
our requests for scientific substantiation, companies usually will 
submit write-ups of human clinical studies, sometimes published in 
peer-reviewed journals. While these studies may appear facially 
plausible, in a number of cases, we have discovered serious flaws, or 
worse, outright fabrications once we obtain the underlying data.\19\ In 
the Sensa case for example, the Commission alleged, among other 
irregularities, that Sensa's purportedly randomized control trial was 
not, in fact, randomized; that it included duplicate subjects; and 
that, on multiple occasions, the research firm Sensa hired sent results 
to the corporate defendants before the test subjects weighed-in. These 
flaws are not isolated to Sensa. In other cases, our examination of the 
underlying data has revealed altered, incomplete, or falsely-reported 
data.\20\ It goes without saying that these kinds of practices add a 
layer of complexity to the FTC's weight-loss investigations.
---------------------------------------------------------------------------
    \19\ The staff's ability to obtain raw data may be hampered when 
such research has been conducted in a foreign jurisdiction.
    \20\ See, e.g., FTC v. Skechers U.S.A., No. 1:12-cv-01214 (N.D. 
Ohio, filed May 16, 2012) (FTC complaint alleging that two of the four 
studies of the defendant's toning footwear were conducted by a 
chiropractor who was married to a senior vice president of marketing at 
Skechers; that one of the studies included spouses and parents of its 
co-authors as test subjects; and that some subjects who gained weight 
or increased their body fat percentage were reported as having lost 
weight or reduced their body fat percentage).
---------------------------------------------------------------------------
    Another distressing trend is marketers taking advantage of weight-
loss fad ingredients that are propelled to popularity through exposure 
in mainstream media supported by trusted spokespeople. For instance, 
within weeks of an April 2012 Dr. Oz Show touting green coffee bean 
extract as a miracle fat burning pill that works for everyone, the 
marketers of the Pure Green Coffee dietary supplement took to the 
Internet making overblown claims--like ``lose twenty pounds in four 
weeks'' and ``lose twenty pounds and two to four inches of belly fat in 
two to three months''--for their dietary supplement. The FTC 
investigated, and last month, filed suit.\21\ The complaint alleges 
that the defendants deceptively promoted Pure Green Coffee through 
their website featuring footage from The Dr. Oz Show, supposed consumer 
endorsements, and purported clinical proof that dieters could lose 
weight rapidly without changing their diet or exercise regimens. We 
also allege that the defendants made deceptive claims on websites they 
set up to look like legitimate news sites and blogs, and on other 
``fake news'' sites run by affiliate marketers whom they paid to 
advertise the Pure Green Coffee product. In all, the defendants are 
alleged to have sold more than 536,000 bottles of Pure Green Coffee 
since May 2012.
---------------------------------------------------------------------------
    \21\ FTC v. NPB Advertising, Inc., No. 14-cv-01155-SDM-TGW (M.D. 
Fla., filed May 15, 2014).
---------------------------------------------------------------------------
III. The Commission's Media Screening Guidance on Weight-Loss Claims
    When consumers see products and ingredients marketed in 
sophisticated ways on respected media outlets and praised by people 
they trust, it can be difficult for them to listen to their internal 
voices telling them to beware. That is why we have long sought the 
partnership of the media to screen deceptive diet ads before they run. 
The FTC's recently-issued ``Gut Check'' reference guide advises media 
outlets on seven weight-loss claims that experts say simply cannot be 
true and that media outlets should think twice about running.\22\ FTC 
staff sent this guidance document to major publishers, media outlets, 
trade associations, and broadcasters asking them for their help in 
protecting consumers (and their own reputation for accuracy) by serving 
as a front-line defense, halting false claims before they are published 
or aired--and before consumers risk their money and perhaps even their 
health on a worthless product.\23\ This is not the first time the FTC 
has issued such media advice,\24\ and it likely will not be the last. 
Media response to our past initiatives has been positive and based on 
our experience, we expect that this effort will be successful in 
keeping many facially false weight-loss claims out of mainstream 
media.\25\ As we have in the past,\26\ we will follow up with media 
outlets (including television, print, and satellite radio) engaged in a 
pattern of running problematic weight-loss ads.
---------------------------------------------------------------------------
    \22\ The Gut Check guidance identifies the following seven false 
claims for dietary supplements, herbal remedies, over-the-counter 
drugs, patches, creams, wraps, and similar products:

    (1) causes weight loss of two pounds or more a week for a month or 
more without dieting or exercise;

    (2) causes substantial weight loss no matter what or how much the 
consumer eats;

    (3) causes permanent weight loss even after the consumer stops 
using the product;

    (4) blocks the absorption of fat or calories to enable consumers to 
lose substantial weight;

    (5) safely enables consumers to lose more than three pounds per 
week for more than four weeks;

    (6) causes substantial weight loss for all users; or

    (7) causes substantial weight loss by wearing a product on the body 
or rubbing it into the skin.

    The guidance is not intended to apply to prescription drugs, meal 
replacement products, low-calorie foods, surgery, hypnosis, special 
diets, or exercise equipment. See Gut Check: A Reference Guide for 
Media on Spotting False Weight Loss Claims (Jan. 7, 2014), available at 
http://www.business.ftc.gov/documents/0492-gut-check-reference-guide-
media-spotting-false-weight-loss-claims.
    \23\ See model letter from Jessica Rich, Director, Bureau of 
Consumer Protection, to media outlets, available at http://www.ftc.gov/
sites/default/files/attachments/press-releases/ftc-has-updated-
guidance-media-outlets-spotting-false-weight-loss-claims-advertising/
140107gutcheckletter.pdf.
    \24\ See Fed. Trade Comm'n, Screening Advertisements: A Guide for 
The Media (Dec. 2006), available at http://www.business.ftc.gov/
documents/bus36-screening-advertisements-guide-media; Fed. Trade 
Comm'n, Red Flag: Bogus Weight Loss Claims (Dec. 9, 2003), available at 
http://www.ftc.gov/news-events/press-releases/2003/12/ftc-releases-
guidance-media-false-weight-loss-claims.
    \25\ The Commission's earlier media screening initiative effort 
resulted in the number of obviously false weight-loss claims in 
television, radio, and print advertisements for dietary supplements, 
topical creams, and diet patches dropping from almost 50 percent in 
2001 to 15 percent in 2004. See Fed. Trade Comm'n Press Release, FTC 
Releases Result of Weight-Loss Advertising Survey (Apr. 11, 2005), 
http://www.ftc.gov/news-events/press-releases/2005/04/ftc-releases-
result-weight-loss-advertising-survey. Recent monitoring suggests that 
this trend is continuing. It should be noted, however, that even though 
an advertisement does not contain an obviously false claim, it still 
may be deceptive for other reasons, such as for lack of substantiation 
for the core efficacy claim.
    \26\ See letter from Mary K. Engle, Associate Director for 
Advertising Practices (FTC), to Stacey Anne Mahoney (counsel for News 
America Marketing FSI, LLC) (Oct. 3, 2008), available at http://
www.ftc.gov/sites/default/files/documents/closing_letters/news-america-
marketing-fsi-llc/081003newsamericaclosing.pdf; letter from Mary K. 
Engle, Associate Director for Advertising Practices (FTC), to Nicholas 
R. Koberstein (counsel for Valassis Communications, Inc.) (Nov. 14, 
2006), available at http://www.ftc.gov/sites/default/files/documents/
closing_letters/valassis-communications-inc./
061114valassisclosingletter.pdf.
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IV. Consumer Education Initiatives
    The FTC seeks to educate consumers as well. The best protection 
against weight-loss fraud is a savvy consumer, so the Commission 
continually looks for new ways to reach consumers with messages about 
how to avoid falling victim to a diet scam. We have issued a number of 
consumer education brochures, articles, and blog posts that hammer home 
the message that the only thing consumers will lose is money if they 
fall for ads promising dramatic weight loss without diet or 
exercise.\27\ The Commission also has created teaser websites designed 
to reach people who are surfing online for weight-loss products.\28\ 
And today, we are launching a new consumer quiz--the FTC Weight Loss 
Challenge--to help consumers identify weight-loss fraud. This 
interactive quiz is designed to help consumers think critically about 
weight-loss products and claims. Available in English and Spanish, the 
quiz separates fact from fiction in ads for products touting fast 
weight loss without the need for diet and exercise.\29\
---------------------------------------------------------------------------
    \27\ See, e.g., ``Putting the Squeeze on Bogus Weight Loss 
Products'' (Jan. 7, 2014), available at http://www.consumer.ftc.gov/
blog/putting-squeeze-bogus-weight-loss-products; ``What's a Healthy 
Weight Loss Plan?'' (Nov. 5, 2013), available at http://
www.consumer.ftc.gov/blog/whats-healthy-weight-loss-plan; ``New Year's 
Resolution: Don't Buy Into Diet Ads'' (Jan. 8, 2013), available at 
http://www.consumer.ftc.gov/blog/new-years-resolution-dont-buy-diet-
ads; ``Weighing the Claims in Diet Ads'' (Jul. 2012), available at 
http://www.consumer.ftc.gov/articles/0061-weighing-claims-diet-ads; 
``Weight Loss Promises: Health Information for Older People'' (Oct. 
2008), available at http://www.consumer.ftc.gov/articles/0317-weight-
loss-promises-health-information-older-people.
    \28\ At first glance, the Commission's ``FatFoe'' teaser site 
appears to advertise a new product, ``FatFoe,'' that falsely guarantees 
fast, easy weight loss for all users, with no diet or exercise 
necessary to lose up to 10 pounds per week permanently. See http://
www.wemarket4u.net/fatfoe/index.html. However, when consumers try to 
order FatFoe, they learn the ad is a warning from the FTC about diet 
scams. See http://www.wemarket4u.net/fatfoe/results.htm.
    \29\ See http://www.consumer.ftc.gov/sites/all/libraries/games/
weightlosschallenge/.
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V. Conclusion
    I want to thank this Committee for focusing attention on weight-
loss scams and for giving the Federal Trade Commission an opportunity 
to describe its role. The Commission is committed to continuing to use 
all the tools at its disposal to limit consumer injury from deceptive 
weight-loss advertising. I would be happy to respond to any questions 
about our weight-loss fraud prevention program.

    Senator McCaskill. Thank you, Ms. Engle.
    Dr. Oz.

 STATEMENT OF DR. MEHMET C. OZ, VICE CHAIRMAN AND PROFESSOR OF 
    SURGERY, COLUMBIA UNIVERSITY COLLEGE OF PHYSICIANS AND 
                SURGEONS; HOST, THE DR. OZ SHOW

    Dr. Oz. Thank you, members of the Committee, for convening 
this session--this hearing, and for allowing me to testify.
    Consumer scams and fraud related to weight-loss products 
have plagued me in my work educating the public since I first 
started in the media, long before my talk show launched in 
2009. It's a problem that I have spent immeasurable time, 
energy, broadcast resources, and money trying to combat. I'm 
chagrined to say the problem has only increased exponentially. 
However, I'm encouraged that the U.S. Senate has decided to 
prioritize this criminal enterprise, and I believe that the 
attention provided by this hearing and the contributions of 
other witnesses will help, because we can, together with our 
collective brainpower, douse the flames of this uncontrolled 
wildfire in the interest of protecting the consumer.
    A bit of history. After I finished my training, in 1993--it 
was about a decade of training, by the way--I began practicing 
cardiothoracic surgery at New York Presbyterian Hospital at 
Columbia University. As I performed thousands of surgeries on 
patients whose hearts had been ravaged by obesity, I realized 
we needed to better educate people on how to take part in their 
own care. And, for that reason, I went into the public life in 
an effort to teach.
    I started as a guest on the Oprah Winfrey Show in 2004 and 
had my first experiences with scam advertising at that time. 
When we discussed supplements like acai berry and resveratrol, 
there wasn't anything special about my description of them, but 
they--immediately, the Internet ads began springing up, using 
pictures of us, show quotes claiming that Ms. Winfrey and I 
were supporting these products and selling them. Ms. Winfrey 
and I and six attorneys general filed a civil suit against the 
companies making these ads. Despite the expense and law 
enforcement cooperation, it had very little impact. Ten years 
later, we're back. This phenomenon has grown dramatically in 
sophistication and scale so that I am forced to defend my 
reputation every single day.
    These ads take money from trusting viewers, many of whom 
believe that I'm actually selling the items. Just to be clear, 
in case it comes up, I have never sold supplements.
    Out of sheer frustration, I have taken a number of measures 
to deal with this problem and protect my viewers. Recognizing--
and I accept the responsibility for this--that the passionate 
language I used to describe supplements was fodder for these 
unethical advertisements, my show has tempered our editorial on 
promising supplements. We have been more stringent in 
presenting opportunities, and have included opposing voices on 
these segments. This, to my knowledge, has had no discernible 
impact. Marketers are still able to select a single phrase of 
support without the surrounding context, and continue profiting 
unimpeded.
    The clip that you showed, and others of--similar ones--if 
you look deeper into the shows, I'll almost always mention 
something about the fact that there aren't crutches, they are 
designed for short-term support, you won't get there without 
diet and exercise.
    To go further, I have devoted numerous shows to covering 
the exact anatomy of how a scam works and what to look for. 
I've launched a campaign called, ``It's Not Me,'' and used 
various media partners to amplify the coverage. I devote a 
portion of every single broadcast to look directly into the 
camera--it's the last thing I say to the viewer--and tell them 
and reassure them that I don't sell anything. If they see my 
name, my picture, or any part of the show involved in an 
advertisement, do not buy the product. Check any show you 
happen to wander on, you'll see me saying that at the very end.
    We also created Oz Watch, which is a way for viewers to 
report violations and report scams. Oz Watch has collected more 
than 35,000 complaints from our viewers. We even hired a 
private company to help with these complaints and police the 
Web, and have issued more than 600 cease and desist letters. 
After months of investigation paid for by us, I even confronted 
an egregious advertiser of Garcinia Cambogia on my show, in 
part because we found--this is the part that hurts me; Senator 
McCaskill, you mentioned this--not only was he using my--it's 
stealing my name--he was also only providing only 10 percent of 
the active ingredient. So, whether it works or not, that's a 
separate issue. If he doesn't have the product in it, it can't 
possibly do anything. By the way, last night, I went online. I 
was still able to purchase this product if I wanted to. It's a 
fairly shameless series of perpetrators that we're dealing 
with.
    I have also taken action on my own, without the assistance 
of State and Federal agencies. But, I do believe that, working 
together, we can achieve a lot more.
    Now, before offering any suggestions--and I have a few--let 
me address the criticism that my show may be fueling the 
Internet scamming problem. I'm respectful of these criticisms. 
I encourage a Nation searching for answers to their health 
woes. We often address weight loss, because, as you all 
mentioned, it affects about two-thirds of the population. If 
the only message I gave was to eat less and move more, which is 
the most important thing people need to do, we wouldn't be very 
effectively tackling this complex challenge, because viewers 
know these tips, and they still struggle.
    So, we search for tools and crutches for short-term support 
so people can jumpstart their programs. We use the alternative 
solutions often--commonly used in other countries and other 
parts of the world, like in the Ayurveda tradition in 
subcontinent of India, traditional Chinese medicine. We feature 
cleanses and new diet programs by promising authors. Many of 
these are controversial, as are the supplements that we 
research and profile. But, I would rather have a conversation 
of this material on my stage than in back alleys, because the 
conversation will still happen, especially if you can give 
viewers the boost that motivates them to engage in wise dietary 
choices.
    However, today is not a referendum on complementary and 
alternative medicine. We're not here to decide if vitamin 
supplements make sense. The problem we've been invited to 
discuss--Internet scamming and fraud--will begin to recede only 
when State and Federal agencies who have jurisdiction over the 
scammers amplify their enforcement and a public-private 
cooperative effort is undertaken in earnest that includes 
everyone on this panel in front of us, including the FTC, 
legitimate product manufactures, Internet ad-hosting services, 
and media outlets like mine. I need to be a part of this, I 
feel passionate about doing this, and I want to play a role.
    Since my time is up, I'm not going to cover these 
suggestions, but I would like to offer some thoughts, maybe in 
the questions later on, about how we can create a Quick 
Reference Registry, Instant Device Whistleblowers, and maybe 
create a private-sector-funded bounty to assist the FTC in this 
very difficult, very challenging task.
    Thank you.

    [The prepared statement of Dr. Oz follows:]

Prepared Statement of Dr. Mehmet C. Oz, Vice Chairman and Professor of 
Surgery, Columbia University College of Physicians and Surgeons; Host, 
                            The Dr. Oz Show
    Good Morning. Chairwoman McCaskill, Ranking Member Heller, Members 
of the Subcommittee. Thank you for inviting me to testify before the 
Committee today on this important issue. My name is Dr. Mehmet Oz and I 
am a cardiothoracic surgeon, Vice Chair and professor of Surgery at New 
York Presbyterian Hospital at Columbia University. I have authored or 
co authored over 400 published academic papers and studies. I have 
performed over 5,000 surgeries and was part of the transplant team at 
New York Presbyterian, performing heart and lung transplants in my 
early surgery career. I hold several patents on surgical devices 
related to valves and left ventricular assistance. I completed medical 
school at the University of Pennsylvania and also attended the Wharton 
School of Business.
    I am also a public figure as host of the nationally syndicated Dr. 
Oz Show, author of YOU the Owner's Manual and the YOU Series of Books. 
I publish a magazine called Dr. Oz The Good Life with Hearst and I have 
a newspaper column which run in more than 110 newspapers across the 
country.
    I am grateful for the opportunity to come before the Committee in 
the interest of protecting the consumer. The ``consumer'' to whom we 
refer is a person. That person is my viewer and your constituent. They 
have placed a trust in both of us for different reasons. You to 
represent them in the Senate and me to provide them with information 
that is useful, accurate and on which they make decisions. I would 
venture to say we both hold this trust to be sacred. But we are here 
because that ``consumer'' is now being preyed upon at an alarming and 
uncontrolled rate, and its incumbent on all of us here to work together 
towards a solution. I have laid out the testimony I plan to provide in 
the sections that follow.
Background
    In the late 1990s and I was a surgeon at New York Presbyterian at 
Columbia in New York City. That morning I had performed a bypass on a 
woman who was 25 and obese. I had become accustomed to performing 
surgery on younger and younger patients who had advanced cardiovascular 
disease. There seemed to be more and more patients under the age of 30 
whose obesity had caused life threatening disease.
    The operation that morning was a success. I took solace in my usual 
post surgical reflection that I was a warrior in a medical field that 
had grown so adept at healing with steel and fixing hearts mechanically 
that there was little we could not do . I saw my department at New York 
Presbyterian Hospital at Columbia as the best in heart surgery and I 
could not have been more proud.
    I went to check on my patient and although awake only a few hours, 
her family and she were celebrating with fast food--the very food that 
caused her heart disease. Then the thought struck me, No matter how 
many operations I performed, no matter how many hearts I fixed, nothing 
would really be impactful in reducing our Nation's number one killer 
unless people took responsibility for their part in prevention. Most of 
my patients could have avoided surgery by taking better care of 
themself. But most were completely oblivious to what role they played 
in whether they lived a long healthy life or succumbed to heart 
disease.
    That evening as I reflected on the day, a conversation with my wife 
contained a breakthrough. I needed to reach more people my wife 
suggested--perhaps writing for magazines, authoring books and 
emphasized that she thought I might do well on television. Her 
suggestions were exciting, but I had no idea where to start and even 
less energy.
    I knew I had to reach people before adolescence where they are most 
impressionable. I also knew that fitness and nutrition were not getting 
the emphasis they should be getting in our schools. Lisa and I formed 
Healthcorps after a successful pilot program in New York City and 
modeled it after the Peace Corps. But instead of developing countries, 
we work in high need high schools. We raise money to fund coordinators 
in high schools to teach mental resilience, fitness and nutrition and 
serve as full time instructors for two years. Since its start in 2003, 
Healthcorps has grown to over 60 schools in 13 states and the District 
of Columbia. We have impacted 300,000 students and nearly 600,000 
members of their communities.
    As the days and weeks went on Lisa's suggestions about television 
made more and more sense and we began to map out very practical steps. 
With a background in television production, she sketched out and 
produced a show that would explore topics in health and ignited 
interest by the Discovery Channel, who eventually decided to air our 
small startup talk show we called ``Second Opinion'' in 2003.
    To launch ``Second Opinion'' we needed a big name guest and through 
a miracle of fate managed to book none other than Oprah Winfrey. Ms. 
Winfrey shared our concern that people needed to know more about their 
health and after her appearance on my show she invited me to appear on 
her talk show which was the number one talk show in the world. One 
appearance led to another and another and then a regular slot. Viewers 
were on fire with questions, e-mails, letters--all wanting to know what 
they could do to feel better, live longer, have more energy and most of 
all how to lose weight. We had hit a nerve. We had tapped into a 
collective thirst for information and inspiration about healthy living 
which really had no pop cultural thought leader. There were famous 
doctors, surgeons general, news correspondent M.D.s who were all 
excellent at their jobs. But while these predecessors did an fantastic 
job of reporting news, writing books and making policy, the public was 
looking for someone to also make health simple, fun, and less scary. We 
strategized that if we found a way add those elements, we might have a 
shot at engaging viewers enough to the point they change how they eat 
and live and move towards wellness rather than disease. The idea for 
The Dr. Oz Show was born in 2007 and development began.
History and Mission of The Dr. Oz Show
    In fall 2009 we launched The Dr. Oz Show in the United States, it 
launched internationally in subsequent seasons and currently it is seen 
in 118 countries. The most succinct way to describe our mission was to 
make The Dr. Oz Show our national conversation on health. We wanted to 
provide information that viewers could act upon which would lead them 
to a healthy life. One thing I learned from Oprah Winfrey, television's 
greatest teacher, was that people didn't changed based on what they 
knew, they changed based on how they felt. This explained why my 
patients still smoked cigarettes despite knowing it would kill them. It 
was a huge breakthrough for me when I internalized that lesson, and the 
creation of the Dr. Oz Show aimed to translate that idea into a 
practical television format.
    To make the Dr. Oz Show succeed in its mission, we have to overcome 
certain obstacles I learned in years of conversations with patients. We 
have to simplify complicated information. We have to make the material 
seem interesting and focus on the ``wow'' factor. We have to let the 
audience touch a liver, a heart, a brain, a spleen--things they would 
never get to do in their own lives. We need to have fun, use humor, and 
show people that laughter is a part of being healthy. It should be 
apparent to anyone who has seen our show that we are deliberately 
unorthodox in how we produce our program. We seek out the unexpected 
demonstrations, costumes, dance routines. I have had various guests 
from circus performers to Surgeon Generals to real camels. I will go to 
any lengths to get people to think differently about health.
    We also cover very serious topics. People need a filter for what 
they read in the news. They need interpretation that puts them at ease. 
They need information they can act on. They need to know how to care 
for loved ones. We cover cancer, diabetes, heart disease and all the 
major chronic diseases teaching basic prevention, how to be a smart 
patient, new and emerging research and alternative therapies. We see 
the show as the forum for a conversation on health that includes 
multiple points of view. While talk shows are designed to host debates, 
my medical training and each session of grand rounds at the hospital 
teaches that there are multiple ways to see a problem, and each point 
of view has its own value. Controversial issues like vaccines, 
mammograms, medical marijuana and many other topics are all part of our 
show. Viewer feedback is positive and our website has close to 4 
million page visits per month.
    Our website is the show's 24/7 informational concierge. I knew when 
we launched that we would never fit everything we need to in an hour, 
and people would have to learn about topics at their own pace. 
www.doctoroz.com provides both a solution and a platform. We are able 
to offer limitless content, show episodes, articles, blogs, lists and 
charts that people can print out and bring to their doctor, family 
history charts, recipes, exercise instructions--its where the viewer 
can go and get information.
    By far, the topic that we are asked about the most is weight loss. 
We cover it frequently with good reason--its an absolute absolute 
pandemic in America and the largest driver of chronic disease. People 
feel powerless, they need solutions, they must lose weight to regain 
their health. We cover the topic from a physiological, nutritional and 
emotional angle--from calories to body image and supplements to plastic 
surgery. These conversations are already taking place everywhere in in 
our country as people grapple with the Nation's weight problem. We are 
one of the very few--possibly sole media outlets whose mission includes 
dedication to the issue.
Editorial Coverage of Vitamins and Supplements
    It is estimated that 150 million Americans--roughly 2/3--take 
vitamins and supplements. Plain and simple these products alter body 
chemistry--ideally in a positive way. Up until we launched, there was 
no designated thought leader that deciphered the bottom line for 
consumers on what supplements were helpful and why. With nutritional 
supplements top of mind for our audience and the great risks and 
rewards that result form their consumption, we actively research new 
and emerging products and trends and news about products found in the 
average health food store. We look to published research, expert 
guests, our own testing that we do with third party laboratories and 
anecdotal testimony from audience members about people's experience 
with the various products with the goal of providing useful 
information. Our audience is already targeted by manufacturers and they 
need better information.
    We have aired close to 900 shows in the five seasons since we 
launched, and while we cover the entire range of health topics, the 
vitamins and supplements, especially those for weight loss have 
generated a disproportionate amount of attention. Most of the time, the 
general public is hearing about a product on my show for the first time 
and there is genuine curiosity. Other times the market springs into 
action, often illicitly and a surge of ads appear every time you turn 
on a computer.
    The general media covers a lot of what we do on the show in various 
ways, and I appear regularly on other programs to discuss news or other 
topics. More than once there has been criticism from some reporters who 
took exception to my use of colorful language in the supplement 
segments. They have expressed disagreement with my use of words like 
``miracle'' and ``groundbreaking''. We constantly reflect as a show on 
which words are the right ones to use and which adjectives we may want 
to retire. We are always self correcting, progressing, trying to make a 
better show. Do we miss the mark sometimes? Of course. But our work is 
affirmed by the millions of e-mails, testimonials, phone calls, from 
people who say they saw something on our show that made a difference in 
their lives and they are better off. Its affirmed by the 1.5 million 
people who signed up for season long Transformation Nation Program in 
Season 3 and lost 3 Million pounds through healthier behavior they 
learned from watching. Its affirmed by the two million people who 
downloaded our New Year's diet plan this January and the 500,000 that 
printed out the family history chart to fill out and bring to their 
doctor. These are just a few examples, but they confirm for us that we 
are speaking in a language that resonates with our audience.
    In 2012, we aired a show on a little known supplement called Green 
Coffee Extract. This is the supplement that is so prevalent in all the 
ads that are being exhibited today.
    In this show I used the word ``miracle'' when referring to how 
green coffee could melt fat and I explored a new study on the 
supplement. I was enthusiastic that it could be a tool to assist people 
in losing weight and I knew the audience wanted and needed this 
information. After the show aired an explosion of ads and marketing 
followed along with criticism that our characterization went to far in 
describing green coffee. My way of dealing with it was to construct a 
second show and answer the criticism of our original segment. While we 
covered Green Coffee in the show, we devoted about half of the hour to 
me explaining to viewers that they are being duped by unscrupulous 
people who are illegally using my name in ads. The entire discussion of 
Green Coffee was prefaced with a warning to the viewer in the interest 
of protecting them.
    Most importantly, in this show I spent an enormous portion of the 
broadcast demonstrating the false ads and how the various retail scams 
work--again trying to protect the viewer. I also re-explored green 
coffee this time using the audience to reveal their anecdotal 
experience after trying the supplement for two weeks. Some had lost 
weight, others had not. It seemed to help some people in their weight 
loss efforts. The Internet lit up again, the illicit ads proliferated, 
and we faced additional criticism.
    Because of the cause and effect that green coffee show had on the 
now burgeoning scams which were increasing completely unchecked, we 
took a long hard look at how we could minimize that effect and where 
our editorial could play a role, while simultaneously devising measures 
to protect the viewer and giving them a mechanism to report scams. 
After constantly reflecting on and refining our language, we broadcast 
a show in February 2014, two seasons later on a little known food 
called Yacon syrup, which is a sweetener made from a South American 
root vegetable and has been in stores for decades. We were deliberately 
measured in our language. We didn't use the words ``miracle'' or 
``magic,'' we thoroughly listed the potential side effects such as it 
cause diarrhea in some of our audience members who tried it. But I did 
suggest that it was good alternative sweetener and could assist in 
weight loss efforts. But the same thing happened afterwards--the very 
next day Yacon syrup was the subject of countless ads, many with my 
name and face with the exact same motus operandi as every ad on every 
supplement that had come before it. This taught me that regardless of 
how much enthusiasm I show in a segment, and whether I use forceful 
words like ``miracle,'' and ``magic'' or more conservative language 
like ``breakthrough,'' or ``promising'' the result is the same--my 
viewers are still victims of fraud and false claims by a sophisticated, 
large scale organized criminal enterprise that is being allowed to 
operate fully and without any enforcement effort. This concerned me 
greatly.
    Now completely confounded by this rampant problem, my next solution 
was to develop a show in which we found one of these perpetrators and 
confronted them. I thought if I made an example out of a company that 
was hard at work deceiving viewers that I would be protecting my 
audience and scaring others doing the same. We aired a show on May 2014 
where I staked out and confronted a company in San Diego that was 
selling Garcinia Cambogia under the name ``Miracle Garcinia''. Sadly, 
this had little impact on the proliferation of the ad scams as well.
    So I stand before you today as a someone who has done everything 
possible to try to protect my audience against those who attempt to 
hijack the conversation between viewer and doctor. I have collected 
close to 35,000 complaints, each one representing a real person--your 
constituents--who have been the victim of some type of fraud.
    When we write a script, we need to generate enthusiasm and engage 
the viewer. Viewers do not watch our show because they are seeking our 
dry clinical language. Viewers watch because we use language that is 
familiar to them which they would use when speaking to friends and 
loved ones. We are a guest in their home every afternoon. To treat that 
privilege like an academic lecture in medical school would be a 
miscalculation. As a television show, unlike a scientific conference, 
we have both the luxury and necessity to use colloquialisms and 
vernacular that you probably won't hear at your doctor's office. This 
is the essence of why we break through to viewer--we meet them where 
they are instead of demand they traverse a river of dry, confusing 
terms that are sure to alienate them. Remember--people act on emotion 
and how they feel, so a main principle in building our scripts is to 
illicit a visceral, emotional reaction from the viewer.
Trademark Infringement and Illicit Advertising of Products Involving 
        the Dr. Oz Show
    Let me be very clear on the following: I do not endorse any 
products or receive any money from any products that are sold. I have 
never allowed my image to be used in any ad. If you see my name, face 
or show in any type of ad, e-mail or other circumstance, its illegal.
    I have been grappling with the problem of illicit use of my name 
connected to weight-loss scams and other products since before The Dr. 
Oz Show even launched. In the years that I was a regular guest on The 
Oprah Winfrey Show, I covered two products--Acai Berry and Resveratrol, 
which lead to a tsunami of illegal banner ads on the internet. That 
began my long battle with this complicated and insidious problem. Below 
is a timeline and explanations on the effort the Dr. Oz Show has 
undertaken since that time.
9/12/2009: Dr. Oz and Oprah Winfrey file civil suit against merchants 
        using their likeness to sell and promote acai berry.
    Working with attorneys general form six states combined with our 
civil suit, we shut down 40 companies that were responsible for the 
false advertising. The effort received enormous news coverage. Sadly, 
after many were shut down, an equal amount re-appeared soon after and 
within a year the amount of perpetrators had more then tripled. In the 
five years since that lawsuit the amount of businesses responsible for 
the illicit scams is without measure.
9/03/2012: Dr. Oz Announces Oz Watch ``If you see something, send 
        something''
    Stymied by the uncontrolled proliferation of Internet scams 
involving our stoled trademark, we created a web based reporting system 
for viewers to turn in a URL, spam e-mail, commercial, or any use of my 
likeness or of the show. We told the audience to share anything they 
find while reminding them never to purchase a product that uses my 
likeness or the show. Since its launch in 2012, we have collected 
35,000 complaints. Many of the reports are viewers who are the victims 
of overt crimes and have had their credit cards billed repeatedly 
despite efforts to discontinue purchasing. These complaints are 
available to the Committee today and to any state or Federal agency 
that wishes to review them in order to take action.
9/12/2012: ``Dr. Oz Fights to Reclaim His Name'' Show
    We devoted a show to explaining to the viewer the exact nature of 
how these scams work and how easy it is for the companies to operate. 
We used this broadcast time which otherwise would have been spent on 
useful health editorial content teaching the audience how to navigate 
what had become a treacherous environment as the illicit ads and scams 
continued to increase.
5/06/2013: Dr. Oz Announces the ``It's Not Me'' Campaign
    With the illicit ads and scams now at fever pitch and growing 
exponentially, we launched a very public campaign with various media 
outlets to remind the public not to buy any products using my likeness. 
The campaign devoted a portion of each broadcast to remind viewers that 
I sell no products and have no relationship with any vitamin, 
supplement or weight loss manufacturers and to NEVER buy anything they 
see using my name. That campaign is still underway and will continue in 
perpetuity as a consumer protection measure.
4/29/2014: ``Dr. Oz Takes Down the Scammers'' Show
    Using the power of the show platform, and frustrated by the scale 
of the problem we developed a show that investigated, staked out and 
finally confronted a company that was an egregious example of the 
Internet scams. This dramatic show can be reviewed on www.doctoroz.com 
and was an attempt to send a message to compaies that if they choose to 
skirt the law, we will find them and we will expose them.
    The breakdown of content collected in the Ozwatch effort is as 
follows:

    Total Cases Reported to Oz Watch through 5/31/2014: 35,000+

   ``High Value'' Targets (image/logo/video infringements) 
        identified: 9,000+

    Many reported offenses (thousands) are duplicates. This number 
excludes social media.

   C&Ds sent to date: 600 (not including YouTube and Facebook 
        takedowns) to 450+ sites.

    Sites taken down + Infringements removed in response to C&D: 300+

    C&Ds sent that produced no result: 78

    Average Claims Submitted to Oz Watch Per Day: 50

    Total YouTube Takedowns to Date: 4,700+ videos

    Total SPAM Messages Reported: 28,000+

    General breakdown by claim type (not exact):

   Online: Website, Facebook, Amazon: 62 percent

   E-mail/Text: 28 percent

   Other (Television/Radio/Print): 9 percent

   In-store: 1 percent
Analysis of a Scam
    The following are the types of scams and the mechanisms that we 
have identified:

        ONLINE DIRECT MARKETING

        Online direct marketers design and leverage unscrupulous 
        business tactics that are intended to elicit an immediate 
        response or action from prospective consumers.

        To reach potential buyers, direct marketers employ a variety of 
        proven tactics including: display/banner advertisements, 
        targeted ad words (via Google/Facebook, etc), direct marketing 
        via e-mail and text message and traditional broadcast media. 
        Each method typically features an unauthorized image or video 
        of a celebrity and a number of trusted consumer facing brands 
        that are intended to establish a sense of trust and familiarity 
        in the prospective buyer.

        ADVERTORIALS + FREE TRIALS

        The celebrity images and trusted brands are presented alongside 
        consumer and celebrity ``testimonials'' on pages that are 
        considered ``Advertorial''. They display celebrity images and 
        selectively edit trademarked media in the style of an editorial 
        or objective journalistic article. To entice prospective buyers 
        into purchasing a product, direct marketers present offers they 
        bill as ``free trials''. In order for a prospective buyer to 
        receive a ``free trial'' they are required to submit their 
        personal information and as well as credit card to handle 
        ``shipping and handling'' of the free product they are 
        expecting to receive.

        DATA COLLECTION AND ORDER PROCESSING

        Once the consumer enters their personal and credit card 
        information, the order is processed and sent to a fulfillment 
        center for shipping. In addition to the standard $4.95 shipping 
        rate consumers believe they are paying for, they are typically 
        auto-enrolled in a product subscription program wherein their 
        credit card is billed monthly or until they contact the seller 
        to cancel. Another malicious tactic used by sellers charges the 
        consumers credit card for a 3-month supply of a product when 
        the free-trial transaction is processed. The 3-month supply 
        often exceeds $150 in cost, which goes directly to the buyer's 
        credit card. In order to cancel the order, the consumer must 
        contact the seller to dispute the charge. Some high volume 
        sellers employ call centers whose sole responsibility is credit 
        card disputes and mitigation. This is to ensure that their 
        phone lines are not clogged when new customers phone in to 
        process new product orders.

        WHITE LABEL PRODUCTS AND FULFILLMENT

        It is easy to create and distribute a unique brand of health 
        supplements, as the industry is largely unregulated. There are 
        a number of companies that manufacture health supplements to 
        seller specification. The bottles can be prepared without 
        labels and in any bottle the seller specifies. This means that 
        sellers have tremendous flexibility with the offers they 
        present. If one brand of product isn't moving, they can simply 
        change the name of the product and reprint new labels. The 
        fulfillment companies that process the orders and ship the 
        orders often ship from off-site UPS shipping centers. This is 
        often the return address listed on the mailing labels used in 
        place of any authentically registered business address.

        TRUSTED PARTNERS AND AFFILIATED COMPANIES

        This vicious and deceptive consumer cycle is perpetuated by 
        people and companies that with innate knowledge of ongoing 
        regulation efforts and a firm understanding of where the gaps 
        in online governance and compliance are. Techniques and 
        business models that prove lucrative quickly become industry 
        standard. Competitors in the direct marketing space will 
        blatantly steal the media and design elements that are 
        successfully deceiving consumers and converting new buyers on 
        competitive sites for use on their own landing pages and 
        offers. Expert direct marketers easily identify which players 
        and resources are essential to a product offer that is 
        successful and lucrative.

        When someone proves proficient or technically skilled in one 
        element of the operation, they are revered and sought after. 
        Their ideas become new standards for online direct marketers.

        EVADING ENFORCEMENT

        Marketers can register a fly-by-night LLC in Delaware, 
        establish a drop shipment address at a UPS shipping center, 
        update digital marketing materials, print new product labels 
        and invest considerable financial resources into marketing a 
        new product offer in a matter of days. The illegal aspect of 
        their operation that first got our attention is unwarranted use 
        of our trademark in their marketing materials, but we are most 
        concerned with the consumer being misled. Most direct marketers 
        will only leverage our trademark in the advertorial page that 
        appears before a consumer submits their personal and credit 
        card information. The advertorial pages are often hosted on 
        ``bulletproof'' servers with private domain registration in 
        place. Because marketers are able to evade enforcement by 
        concealing their identity when a domain host sends a trademark 
        claim to their attention, they simply repeat the process.

        In summary, a direct marketer establishes a connection with a 
        potential buyer via traditional advertising or direct 
        marketing. When the potential buyer clicks a link, they are 
        funneled into a conversion cycle that is laden with 
        unauthorized trademarked material on advertorial pages designed 
        to elicit an immediate action from the buyer. All links on the 
        advertorial page link directly to a product landing page and 
        data capture form.
Proposed Solutions and Suggestions
    The uncontrolled proliferation of illicit advertising of weight-
loss scams on the Internet is a large scale orchestrated criminal fraud 
that amounts to hundreds of million of dollars in illegal profits and a 
grave threat to the health of any person buying and ingesting products 
from a dishonest seller. There has been a paucity of enforcement of 
existing laws on the quality and safety of the products, the method of 
billing which results in fraud or theft by deception, and the rampant 
and constant trademark infringement. If ever there were an opportunity 
and an urgency to protect the consumer, this is it.
    I believe that we have existing laws that allow for the enforcement 
of these scams. I believe the power of this committee is critical in 
shedding light on the situation and raising its level of priority with 
the appropriate enforcement agencies. I do not think additional 
regulation or oversight is necessary.
    Here are my suggestions as a starting point to deal with this 
problem:

   Initiate greater intra-agency cooperation between the FTC, 
        FDA, FBI, Congress and State Attorney General offices and the 
        private sector companies (via trade organizations) to identify 
        offenders and shut them down.

   Development of a ``master list'' of celebrity endorsements 
        retained by the FTC for quick identification of violators. This 
        would be of great assistance to the celebrities who have no 
        practical recourse for trademark infringement and enable the 
        FTC and law enforcement to look in the obvious places in an 
        effort to protect the consumer.

   Web hosting and Internet advertising platforms must bear 
        some responsibility for hosting egregious and obvious false ads 
        or criminal content. A master list would be a useful tool and 
        if developed, ad hosting services could be expected to cross 
        reference celebrity content and expected to refuse purchases 
        for violators as well as report the purchaser.

    It's my hope that we leave today with a commitment to cooperate in 
protecting the consumer. You have my absolute commitment to provide 
whatever I can that will be of assistance in any of your efforts or 
with any of the agencies you deem appropriate. I also will continue my 
earnest efforts to be a public advocate on this issue and use the power 
of my show and various media platforms to keep it in the public eye.
    Thank you for the opportunity to testify.
    

    
                                                                  

    Senator McCaskill. Thank you, Dr. Oz.
    Mr. Peeler

        STATEMENT OF C. LEE PEELER, PRESIDENT AND CHIEF

         EXECUTIVE OFFICER, ADVERTISING SELF-REGULATORY

COUNCIL; EXECUTIVE VICE PRESIDENT, ADVERTISING SELF-REGULATION, 
               COUNCIL OF BETTER BUSINESS BUREAUS

    Mr. Peeler. Thank you, and good morning. I appreciate the 
opportunity to testify on the ongoing work of the advertising 
industry's self-regulatory system, particularly as it applies 
to weight-loss advertising.
    This system was created in 1971 by the Nation's leading 
advertising trade associations, in cooperation with the Council 
of Better Business Bureaus. Since that time, we have pioneered 
a rigorous form of self-regulation that is impartial--it is 
administered by the Council of Better Business Bureaus. It is 
comprehensive--it applies to all national advertisers in all 
media. It's transparent--all of our decisions are publicly 
reported. And it's effective--companies that do not participate 
in the process, or don't follow our recommendations, are 
publicly referred to the appropriate government agency, usually 
the Federal Trade Commission.
    We work on a case-by-case basis, actively monitoring 
national advertising for questionable claims and practices, and 
we apply FTC-type standards to those claims. Each year, we 
issue almost 200 decisions on a wide variety of advertising 
issues, including about a dozen last year that addressed 
advertising of weight-loss claims and required the company to 
stop or modify the ads in question.
    Self-regulatory claims for weight-loss products include 
issues ranging from technical, easy-to-remedy disclosure 
questions to questions about the validity of complex underlying 
studies that support the advertiser's claim. For example, one 
recent NAD decision addressed advertisements for a product 
called ``Garcinia Cambogia,'' including claims it had been 
clinically proven to promote four times more weight loss than 
diet and exercise. Some of the claims were contained in a 
special report on how to lose 28 pounds in 1 month with two 
healing cleanses recommended by Dr. Oz. Other claims cited 
results of specific studies as support for the weight-loss 
claims. In this case, the advertiser told us that that special 
report that I referred to earlier was posted by an unauthorized 
third party, and the advertiser immediately took steps to take 
the report off the Internet. The NAD determined that the 
remaining specific product performance claims and ingredients 
claims should be discontinued in their current form. The 
advertiser fully cooperated with the review and agreed to 
discontinue the claims, as do about 90 percent of the companies 
that participate in the process. We had a very similar case 
with one of the other ingredients that's popular in this area, 
Raspberry Ketone.
    Our casework complements that of the Better Business Bureau 
system in protecting consumers. BBBs handle hundreds of 
advertising review cases locally, including claims associated 
with weight-loss products and services. BBBs also work to 
resolve complaints about business practices, and are uniquely 
positioned to identify local and national scams as they emerge, 
and warn consumers about them. We are a major outlet for the 
educational material that the FTC witness described earlier, 
because we have over 100 Better Business Bureaus located around 
the country.
    Last year, Better Business Bureaus handled thousands of 
complaints about weight-loss products and services, including a 
growing number of complaints about weight-loss clinics. BBBs 
often find that unsubstantiated weight-loss claims are also 
associated with problematic billing practices and ``autoship'' 
programs, underscoring the adage that misleading weight-loss 
claims frequently lighten only the consumer's wallet.
    These overall results are consistent with those observed by 
our St. Louis BBB that serves eastern Missouri and southern 
Illinois, except that the St. Louis BBB has not seen the rise 
in the number of weight-loss clinic ads in that particular 
jurisdiction.
    Self-regulation works only if it has the support of the 
industry and the government. In the area of weight loss, two 
associations in particular, the Electronic Retailing 
Association and the Council for Responsible Nutrition, have 
stepped forward to provide the types of no-strings-attached 
funding that allows us to do our impartial monitoring and 
decisionmaking work. Similarly, although there is no formal 
relationship between the advertising self-regulation process 
and the government, decades of support by the Federal Trade 
Commission have been absolutely critical in the success of the 
process.
    Although there have been significant efforts by the Federal 
and State government to control unsubstantiated and exaggerated 
claims, more can be done. One of the things that I think 
everybody agrees on is, the type of State and Federal 
enforcement actions that the FTC has been bringing. Those are 
critical to controlling this type of advertising.
    In addition, trade associations whose members include 
representatives of weight-loss industries need to follow the 
example set by the Electronic Retailing Association and the 
Council for Responsible Nutrition, and step up and support 
increased self-regulatory monitoring of the marketplace. It's 
good for businesses. It's good for consumers.
    Finally, the FTC's renewed effort to enlist consistent 
support of the media in guarding against the most egregious 
types of weight-loss claims is a key step. Network 
broadcasters, for example, have fairly sophisticated processes 
for network ads. And similarly, in the new media, Google has 
recently introduced a new approach to ad screening that's 
tailored to that specific new media. But, there are lots of 
other media outlets--independent TV channels, cable television, 
satellite radio, and radio--that are not doing as much.
    And finally, I guess I'd just close with an anecdote. Just 
this weekend, I got a spam e-mail. It was for a product called 
``Forskolin.'' It said if I took the product, I would never 
have to diet again. And when I went on the Internet and used 
Google Earth, I found that the return address was for a post 
office box. So, it was sort of a regulatory trifecta. It was a 
spam e-mail, for a ``red flag'' claim that no one can 
substantiate, with a seller that nobody could find.
    Thank you.
    [The prepared statement of Mr. Peeler follows:]

  Prepared Statement of C. Lee Peeler, President and CEO, Advertising 
     Self-Regulatory Council Executive Vice President, Advertising 
       Self-Regulation Council of Better Business Bureaus (ASRC)
    I appreciate the opportunity to describe for the Subcommittee the 
ongoing work of the advertising industry's system of self-regulation, 
particularly as it applies to weight-loss advertising.
    According to a recent Gallup poll,\1\ 51 percent of American 
consumers want to lose weight. Weight-loss products come in all sizes 
and flavors: pills, creams, patches, diets and devices--to name a few. 
Weight-loss products and fads have long been ubiquitous and popular 
with consumers. They are, therefore, a primary subject of advertising 
self-regulatory review proceedings. Current concerns about the Nation's 
spiraling obesity rates can make unsubstantiated or exaggerated claims 
of effortless weight loss even more appealing to consumers than in the 
past. And that means it is even more important to have a process for 
separating truthful claims about effective products from exaggerated, 
unsupported or outright false claims about products that don't work.
---------------------------------------------------------------------------
    \1\ Americans' Desire to Shed Pounds Outweighs Effort
    http://www.gallup.com/poll/166082/americans-desire-shed-pounds-
outweighs-effort.aspx
---------------------------------------------------------------------------
Advertising Self-Regulatory Council (ASRC)
    The advertising industry's self-regulatory system was created in 
1971 when three leading advertising trade organizations--the 4A's, 
American Advertising Federation (AAF) and Association of National 
Advertisers (ANA)--together with the Council of Better Business Bureaus 
(CBBB), announced a new alliance to promote truthful and accurate 
advertising. That alliance, now called the Advertising Self-Regulatory 
Council or ASRC, sets policies and procedures for advertising industry 
self-regulation. In addition to the founding partners, the ASRC Board 
now includes the chief executives of the Electronic Retailing 
Association (ERA) and Interactive Advertising Bureau (IAB), giving ASRC 
significant reach throughout the advertising and marketing community.
Advertising Self-Regulation
    ASRC has pioneered a unique form of self-regulation. Our programs, 
described in Appendix A, are:

   Impartial and administered by a third party--the Council of 
        Better Business Bureaus.

   Comprehensive--they apply to all national advertisers in all 
        media

   Transparent--all decisions are public both for guidance to 
        the industry and to ensure public accountability.

   Effective--although the self-regulatory system is voluntary, 
        there are consequences for non-participation or non-compliance, 
        including public referral to the appropriate government agency, 
        usually the Federal Trade Commission (FTC).
Administration by the Council of Better Business Bureaus (CBBB)
    To ensure the impartiality and independence of the self-regulatory 
process, the system is administered by the CBBB. The CBBB is the 
network hub for the Better Business Bureau system in the United States 
and Canada, which works to promote trust in the marketplace.
Operation of the Self-Regulatory System
    All ASRC programs operate on a standard model. While the programs 
accept challenges and resolve disputes between competing advertisers, 
they also actively monitor national advertising for questionable claims 
or practices that may violate industry guidelines \2\ or principles.\3\
---------------------------------------------------------------------------
    \2\ Self-Regulatory Program for Children's Advertising
    http://www.asrcreviews.org/wp-content/uploads/2012/04/Guidelines-
FINAL-FINAL-REVISED-20142.pdf
    \3\ The DAA Self-Regulatory Principles
    http://www.aboutads.info/principles
---------------------------------------------------------------------------
    Active monitoring is particularly important in the weight-loss area 
where consumers are often reluctant to complain and may attribute poor 
results from the products to themselves, rather than to the product.
    Staff monitoring is supplemented by a robust competitor challenge 
process. As the United States Supreme Court observed last week: 
``Competitors who manufacture or distribute products have detailed 
knowledge regarding how consumers rely on certain sales and marketing 
strategies. Their awareness of unfair competition practices may be far 
more immediate and accurate than that of agency rulemakers and 
regulators.'' \4\
---------------------------------------------------------------------------
    \4\ Pom Wonderful LLC v. Coca-Cola Co.
    Supreme Court of the United States, Slip Opinion at page 11-12, 
June 12, 2014
---------------------------------------------------------------------------
    By providing a fast, expert forum to resolve these complaints and a 
transparent public record of the resolution, ASRC programs harness this 
expertise to serve the interests of the public.
    Self-regulatory cases for weight-loss products may involve a range 
of issues from technical and easy-to-remedy disclosure questions, to 
questions about the validity of complex underlying studies. In some 
cases, we recommend that the advertiser make certain modifications to 
the advertising. In others, we may recommend discontinuance of the 
entire ad. If an advertisement is the subject of an FTC order, court 
order or ongoing litigation we will advise the parties that the 
complaint is not, or is no longer, appropriate for investigation in 
this forum.
    When a self-regulatory inquiry is opened, the advertiser is asked 
to provide its support for a questioned claim. The advertiser's support 
for the claim is reviewed by skilled attorney staff, who then issue a 
decision that analyzes the claims made in the ad, the advertiser's 
support (substantiation) for the claims and the fit between the two.
    The advertising self-regulatory process is both similar to and 
different from government enforcement. It applies the same standards 
for claim substantiation as the FTC, but it does not have subpoena 
power to compel the production of documents and relies on evidence 
voluntarily produced by the parties. The self-regulatory process is 
comparatively short. Both the National Advertising Division (NAD) and 
Electronic Retailing Self-Regulation Program (ERSP) strive to resolve 
cases in 60 to 90 days.
    Overall, the self-regulatory system issues roughly 200 decisions 
each year. While there are no sanctions (penalties, redress, etc.) 
beyond requiring discontinuance or modification of advertising, the 
relative time-to-decision makes self-regulation a very valuable 
addition to the existing government regulatory framework for 
advertising. It helps ensure that industry members comply with strong 
standards and frees government resources to focus on the most egregious 
cases. Overall, more than 90 percent of advertisers voluntarily 
participate in the program and make recommended changes to their 
advertising.
Funding for Self-Regulation
    The advertising-self regulatory system is funded entirely by the 
advertising industry through the sales of products and services--
including dispute resolution services and online access to self-
regulatory decisions--national partnerships with the CBBB and direct 
funding of programs through trade associations.
FTC Support for Self-Regulation
    During more than 40 years of practice, the advertising self-
regulatory system has received strong support from the FTC.\5\
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    \5\ ``Truth or Consequences: The FTC Approach to Advertising''
    Remarks of Commissioner Jon Leibowitz at The National Advertising 
Division Annual Conference--September 24, 2007

    ``All of us at the FTC appreciate the NAD's advertising review 
work. It is more important today than it has ever been.. . .It really 
helps to have an alternative procedure that is quick, fair, and well-
respected.'' http://www.ftc.gov/speeches/leibowitz/070924bbbremarks.pdf

    The Federal Trade Commission at 100: Into Our Second Century
    The Continuing Pursuit of Better Practices: A Report by Federal 
Trade Commission Chairman William E. Kovacic--January 2009.

    ``Meaningful self-regulation is an important complement to the 
Commission's law enforcement efforts--particularly in the area of 
deceptive marketing practices. For example, the program administered by 
the National Advertising Division/National Advertising Review Council 
(``ASRC'') arm of the Council of Better Business Bureaus (``CBBB'') has 
worked well to obviate the need for Commission action in some 
instances.'' http://www.ftc.gov/ftc/workshops/ftc100/docs/
ftc100rpt.pdf.

    Self-Regulation in the Infomercial Industry:
    Deborah Platt Majoras, Chairman, Federal Trade Commission
    Before the Electronic Retailing Self-Regulation Program--April 2006
    (Footnote No. 3, listing FTC statements in support of self-
regulation since 1978.)
    http://www.ftc.gov/speeches/majoras/060503eraspeech.pdf.
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    Although there is no formal relationship between the government and 
the self-regulatory system, the FTC's ongoing support for self-
regulation contributes meaningfully to the success of the process. 
Referrals to the FTC of advertisers that refused to participate in the 
self-regulatory process have resulted in FTC lawsuits and significant 
monetary penalties.\6\
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    \6\ Court Orders Spammers to Give Up $3.7 Million
    http://www.ftc.gov/opa/2009/07/spear.shtm ;
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    Further, FTC guidance on advertising issues, including the ``FTC 
Guides Concerning the Use of Endorsement and Testimonials in 
Advertising,'' ``Dietary Supplement Advertising Guidelines'' and its 
recently published ``Gut Check: A Reference Guide for Media on Spotting 
False Weight Loss Claims,'' provides valuable counsel for advertisers 
and self-regulatory bodies. The FTC's guidance is further enforced 
through the decisions of the self-regulatory system, which applies FTC 
standards to its review of specific ads.
Better Business Bureau Advertising Reviews
    The work of the national advertising self-regulatory programs 
complements the role of the Better Business Bureau (BBB) system in 
protecting consumers. BBBs maintain active advertising monitoring 
programs in their communities under the BBB Code of Advertising. BBBs 
handle hundreds of advertising review cases, including pricing claims, 
inadequate disclosures and qualifications, superiority claims, rebates 
and warranty and guarantee claims.
    BBBs also work to resolve complaints about business practices and 
are in a unique position to identify potential scams--both locally and 
nationally--and warn consumers about fraud. BBBs also have excellent 
access to the media outlets in their communities.
    The BBB notes that more than 4,300 complaints about weight-loss 
supplements were filed nationwide in 2013, including complaints about 
paying for but not receiving merchandise, refund and exchange issues 
and potentially misleading claims.
    The BBB system, which makes its ratings and business reviews 
available to all consumers, can provide consumers a resource by 
allowing them to check a company's complaint history before making a 
purchase.
    Complaint data from the BBB system is shared with both Federal and 
state law enforcement agencies. In fact, complaints from the BBB system 
makes up more than 20 percent of the data in the FTC Consumer Sentinel 
fraud detection database and information from complaints filed with 
BBBs is often used by Federal and state law enforcement agencies to 
build cases, including cases against companies that sell bogus weight-
loss products.
Advertising Self-Regulation and Weight-loss Claims
    Truthful and substantiated advertising for weight-loss products, 
diets and exercise devices that work can be of substantial assistance 
to consumers seeking to achieve and maintain a healthy weight.
    Misleading, unsubstantiated or exaggerated advertising claims--
often for products promising quick, effortless weight loss--have the 
opposite effect, causing both health and economic injury to consumers.
    In addition to harm done to consumers, these types of claims also 
injure honest competitors who promote effective products and whose ads 
acknowledge the difficulty consumers may face in losing weight and 
sustaining weight loss.
    Misleading advertising both misappropriates sales that would 
otherwise go to legitimate products and services and undermines the 
credibility of advertising generally, making it more expensive for 
honest advertisers to reach their audiences. Recognizing these twin 
harms, two industry trade associations--The Electronic Retailing 
Association (ERA) and the Council for Responsible Nutrition (CRN)--have 
stepped forward to fund impartial monitoring and oversight of 
advertising claims, including a substantial number of weight-loss 
claims.
    In 2004, the ERA funded the development of the ERSP program, which 
provides independent monitoring of all direct-response advertising for 
a wide range of products, including weight-loss products.
    Since its founding, the ERSP program has issued more than 350 
decisions, often requiring modification or discontinuance of the 
challenged advertising. Almost one-third of all ERSP cases have 
involved weight-loss claims.
    In 2006, CRN provided the National Advertising Division with 
funding for an attorney who would concentrate on monitoring advertising 
claims for dietary supplements. Since 2006, NAD, through this 
initiative, has examined advertising claims made for 164 separate 
supplements, including 30 weight-loss products.
    Although the majority of advertisers comply with the 
recommendations of the self-regulatory system, those who decline to 
participate in an ERSP or NAD review or refuse to implement recommended 
changes are referred to the most appropriate Federal regulatory agency, 
most often the FTC.
Current Issues in Weight-Loss Advertising
    While diet fads come and go, certain troublesome claims regularly 
appear, including claims that a supplement is ``clinically proven'' to 
work or is ``doctor recommended.'' Claims that state or imply that 
products will provide fast, effortless weight loss without any changes 
to diet or exercise are published over and over again. (Appendix B: 
Weight-Loss Claims Digest)
    It is not uncommon to find that a product has not been tested or 
that the results of testing on a product's ingredients do not support 
the advertiser's claims. Although the FTC's 2009 revisions to the 
``Endorsements and Testimonial Guides'' have improved compliance, 
unsupported testimonials from ``real users'' and misleading ``before'' 
and ``after'' pictures remain a significant concern.
    Some media, like the major national broadcast television networks, 
and some new media like Google, have relatively sophisticated 
advertising clearance and screening processes. Others do not, and 
should be called upon to implement effective screening protocols, 
particularly for weight-loss products. Such screening is good for 
consumers, for honest advertisers and for the media in general.
    Meanwhile, the volume of media channels available to promote 
products has exploded, along with the use of ``affiliate marketing'' in 
which multiple sellers make--and often elaborate on--claims made for 
weight-loss products like acai berry and green coffee products. 
Products promoted by unsubstantiated or exaggerated claims are often 
marketed through spam e-mails and all marketers are increasingly using 
social media -Pinterest, for example--to promote their products.
    For example, a recent NAD decision addressed claims made for a 
product called Garcinia Cambogia Formula, including claims that the 
product had been clinically proven to promote four times more weight 
loss than diet and exercise.
    Some of the claims were contained in a ``Special Report'' on how to 
lose 28 lbs. in one month with products recommended by Dr. Oz.
    Other claims included:

   ``It's scientifically proven to tear away fat from your 
        body. In studies taken out by renowned health research 
        institution Queens University in Canada, Garcinia Cambogia was 
        proven to ignite your metabolism and therefore fat burning 
        capabilities by around 300 percent when taken regularly.''

    The advertiser asserted that the ``Special Report'' and claims made 
        in that report were posted by an unauthorized third party and 
        immediately took steps to have the report taken off the 
        Internet.

    This now deleted ``Special Report'' appeared to be a ``fake'' news 
report similar to advertisements by acai berry supplement manufacturers 
promising rapid and dramatic weight loss that were the subject of FTC 
enforcement actions in recent years.
    NAD determined that the remaining product performance and 
ingredient claims promising weight and fat loss should be discontinued 
based on the lack of reliable scientific evidence demonstrating that 
the product, or its ingredients, elicit the claimed benefits. The 
advertiser fully cooperated in the review and agreed to discontinue the 
claims reviewed by NAD.
    Additionally, we have seen--and taken action against--the use of 
seemingly independent diet product review sites that are in fact 
controlled by marketers. (For example, one marketer operated a diet-
review site that stated: ``there are now literally thousands of weight-
loss products and diet programs available to choose from . . . Our goal 
is to give you a quick snapshot of what options are available to 
you.'')
    Finally, BBB advertising review programs from around the country 
indicate consumer complaints and ad review issues focusing on weight-
loss clinics.
    The BBB notes that weight-loss products and programs (like weight-
loss clinics) marketed with exaggerated or unsubstantiated claims are 
often also associated with problematic billing practices, poorly or 
entirely undisclosed negative option ``auto ship'' plans and a failure 
to make refunds for returned products.
    While BBB notes that overall complaints about negative-option 
shipping issues are decreasing and are not limited only to weight-loss 
supplements, complaints regarding the practice remain significant.
Recommendations
    Although there have been significant efforts by federal, state and 
self-regulatory organizations to control unsubstantiated, exaggerated 
and misleading claims in the weight-loss marketplace, more can done.
    State and Federal enforcement actions are critically important and 
support the self-regulatory system by underscoring for companies 
working in the weight-loss marketplace the seriousness of these claims.
    Trade associations whose members include representatives of weight-
loss industries should follow the example set by ERA and CRN and step 
up to support self-regulation of the marketplace. Experience shows 
self-regulation can be an effective tool in producing prompt, voluntary 
compliance by many advertisers. That is good for honest competitors in 
the weight-loss industry and it is good for consumers.
    The FTC's renewed effort to enlist the consistent support of the 
media in guarding against the most egregious weight-loss claims is key, 
as well. Guidance from both the FTC and the self-regulatory system is 
public and available for review.
    Small- and medium-sized media outlets may not be able to conduct 
the detailed review of weight-loss advertising claims that NAD and ERSP 
apply, but they can 5 and should check the advertisements they accept 
for publication against the very straightforward screening criteria 
suggested by the FTC, review the ads against self-regulatory decisions 
already published by the ASRC and check the advertiser's complaint 
history with the BBB.
    These steps aren't foolproof, but collectively they help bleed 
false and misleading claims from the weight-loss marketplace, level the 
playing field for honest advertisers and help bolster consumer 
confidence in advertising.
       Appendix A: Advertising Industry Self-Regulation In Brief
Advertising Industry Self-Regulation
    Advertising Industry Self-Regulation has pioneered the use of 
independent, transparent oversight to assure compliance with industry 
standards. More than 90 percent of advertisers who participate in the 
advertising industry's system of self-regulation voluntarily comply 
with its decisions. Failure to participate or to comply with decisions 
results in public referral to the appropriate government agency.
    The Advertising Self-Regulatory Council is the governing body for 
advertising self-regulation. ASRC's 11-member Board of Directors is 
comprised of the top leadership of the 4A's, American Advertising 
Federation (AAF), Association of National Advertisers (ANA), Council of 
Better Business Bureaus (CBBB), Electronic Retailing Association (ERA) 
and Interactive Advertising Bureau (IAB).
    The Self-Regulatory Programs:

   NAD--The National Advertising Division (NAD) monitors 
        national advertising in all media, enforcing high standards of 
        truth and accuracy. NAD examines advertising claims made for 
        goods and services as diverse and critical as 
        telecommunications, infant nutrition, over-the-counter 
        medications and dietary supplements and ``green'' products. NAD 
        accepts complaints from consumers, competing advertisers and 
        local Better Business Bureaus. NAD's decisions represent the 
        single largest body of advertising decisions in the U.S.

    In addition to its own monitoring, NAD provides a fast, expert 
        forum for the resolution of competitors' disputes. NAD handles 
        about 150 cases each year and publicly reports its formal 
        decisions.

   NAD/CRN--Created in cooperation with the Council for 
        Responsible Nutrition, the NAD/CRN program has expanded NAD's 
        review of advertising for dietary supplements, a nearly $35 
        billion industry.

   Accountability Program--Developed in cooperation with the 
        Digital Advertising Alliance (DAA), the Online Interest-Based 
        Advertising Accountability Program is charged with ensuring 
        industry compliance with the Self-Regulatory Principles for 
        Online Behavioral Advertising (Principles). The Principles 
        require third parties to provide consumers with an easy-to-use 
        mechanism that allows the consumer to exercise choice regarding 
        the collection and use of data from their device for online 
        behavioral advertising (OBA) purposes. The Accountability 
        Program announced its first formal decisions in November 2011.

   CARU--Recognizing the special vulnerability of young 
        children, the Children's Advertising Review Unit (CARU) holds 
        advertisers to a high standard of truth and appropriateness 
        when they direct advertising to young children. Among other 
        things, CARU's guidelines provide that advertisers can not 
        state or imply that their products will make children more 
        popular with their peers, advertise vitamins or other products 
        that carry ``keep out of reach of children'' labels, or 
        advertise products that are unsafe for young children to use. 
        CARU examines advertising in all media, including electronic 
        media, and monitors Websites to assure that they are compliant 
        with CARU's guidelines.

   The Initiative--The Children's Food and Beverage Advertising 
        Initiative (Initiative) is an ASRC-endorsed program, run by the 
        CBBB. The Initiative responds to concerns regarding food 
        advertising to young children. It is comprised of 17 leading 
        food and beverage companies. It promotes the advertising of 
        healthier products in children's media and publishes regular 
        reports on compliance with its principles.

   ERSP--Developed with the Electronic Retailing Association, 
        the Electronic Retailing Self-Regulation Program (ERSP) 
        examines the truth and accuracy of core claims made in 
        electronic direct-response advertising. ERSP monitors the $170 
        billion direct-response marketplace, providing a strong self-
        regulatory presence on the frontier of electronic commerce.

   NARB--The National Advertising Review Board is the appellate 
        body of the self-regulatory system. It is made up of industry 
        professionals who hear appeals of decisions by NAD and CARU. 
        NARB panel members are nominated by the ASRC Board of 
        Directors.

    ASRC programs are funded through a variety of sources, including 
through the support of industry associations (ERA, CRN, Digital 
Advertising Alliance), the direct support of children's advertisers and 
child-directed media and revenue from the sale of products and 
services. National Partnerships with the CBBB makes up the remainder.
    Self-regulation is good for consumers. The self-regulatory system 
monitors the marketplace, holds advertisers responsible for their 
claims and practices and tracks emerging issues and trends.
    Self-regulation is good for advertisers. Rigorous review serves to 
encourage consumer trust; the self-regulatory system offers an expert, 
cost-efficient, meaningful alternative to litigation and provides a 
framework for the development of a self-regulatory solution to emerging 
issues.
    To learn more about supporting advertising industry self-
regulation, please visit us at: www.asrcreviews.org.
                 Appendix B: Weight-Loss Claims Digest
Weight-Loss Claims Digest
    The National Advertising Division (NAD) and Electronic Retailing 
Self-Regulation Program (ERSP) are investigative units of the U.S. 
advertising industry's system of self-regulation.
    NAD seeks to ensure that claims made in national advertising are 
truthful, accurate and not misleading. NAD requires that objective 
product performance claims made in advertising be supported by 
competent and reliable evidence. NAD cases can be initiated through 
staff monitoring of advertising claims or through ``challenges'' to 
advertising claims filed by competitors, consumers, or public-interest 
groups. NAD also receives a significant number of dietary supplements 
cases from the Council for Responsible Nutrition (CRN) initiative. CRN, 
a trade association representing dietary supplement manufacturers, 
files challenges with NAD to encourage manufacturers to provide 
substantiation for their advertising claims to ensure that claims are 
truthful, not misleading and are substantiated with credible scientific 
evidence.
    Since 2006, NAD and the National Advertising Review Board--the 
appellate arm of the self-regulatory system--have issued more than 30 
decisions that specifically addressed claims made for ``weight-loss'' 
supplements.
    ERSP is responsible for evaluating the truth and accuracy of core 
claims made in direct response advertising. ERSP inquires about the 
evidentiary support that a marketer possesses for claims made in 
direct-response advertising, and determines whether the marketer has 
provided a reasonable basis for the representations. Advertising comes 
to the attention of ERSP through its monitoring program, consumers, and 
challenges from competitors.
    While diet fads come and go, certain claims regularly appear in 
advertising for weight-loss products, including claims that a product 
is ``clinically proven,'' ``doctor recommended,'' or works without any 
changes in diet or exercise.
    It is not uncommon to find that a product has not been tested or 
that the results of testing on a product's ingredients do not support 
the claims made. Unsupported testimonials from ``real users'' and 
``before'' and ``after'' pictures remain consistent issues in weight-
loss advertising.
Safety Claims

Healthy Life Sciences, LLC
Healthe Trim Weight Loss Dietary Supplements
Case #5641 (10.10.13)

    Claim at Issue:

   Healthe Trim is perfectly safe.

    NAD Findings: The advertiser submitted a 12-week study that 
demonstrated that, for the duration of the study, the supplement was 
well-tolerated by the participants. However, the advertiser did not 
have any long-term studies demonstrating the safety of Healthe Trim 
after twelve weeks. Further, study participants were required to limit 
their caffeine consumption to one serving a day or less. NAD 
recommended that the advertiser modify its safety claim that ``Healthe 
Trim is perfectly safe'' to include a reference to the length of time 
that the safety of Healthe Trim was studied and also that the safety 
study was conducted on participants who limited their caffeine intake 
to one serving a day or less. Such disclosures should be prominent and 
appear in close proximity to the safety claim.
Clinically Proven Claims

Zylotrim, LLC
Zylotrim Weight Loss Supplement
Case #207 (3.4.09)

    Claims at Issue:

   ``Clinically proven to more than double the activity of fat 
        burning enzymes''

   `` ``80 percent of each pound that was lost was pure body 
        fat''

   ``Rated #1 weight loss active ingredient!''

    ERSP Findings: ERSP concluded that the marketer's evidence did not 
adequately support its claim that Zylotrim is ``clinically proven to 
more than double the activity of fat burning enzymes'' or that ``80 
percent of each pound that was lost was pure body fat'' and recommended 
that these claims be either modified or discontinued. ERSP also 
determined that the ``Rated #1 Weight Loss Active Ingredient'' claim is 
inaccurate and should be either modified or discontinued in the current 
context in which the claim is presented in the advertising and on the 
product packaging.
``Before and After'' Depictions

Wellnx Life Sciences, Inc.
NV Hollywood Weight-Loss Supplements
Case # 5629 (9.10.13)

    The evidence offered in support of advertising claims must mirror 
the claims in scope and nature.

    Claims at issue:

   Lose weight fast!

   Incredible weight-loss power!

   Claims accompanied by photograph of model Holly Madison, who 
        had lost two jean sizes.

    NAD findings: NAD determined that the two clinical trials offered 
in support of the advertiser's weight-loss claims were methodologically 
sound in that both of the studies were randomized, double-blind, 
placebo-controlled studies that utilized the same dosage and form of 
the two active ingredients found in NV Hollywood. The study 
participants were obese women.
    However, there was no evidence in the record that the model in the 
advertising--who had not been obese when she began taking NV 
Hollywood--would achieve the same results in the same time frame. 
Further, the advertisement did not make reference to the diet and 
exercise changes that the study participants also underwent to achieve 
their weight-loss goals. Consequently, NAD recommended that advertiser 
discontinue its clams that NV Hollywood causes ``fast'' weight loss or 
has ``incredible weight-loss power.''

Vital Pharmaceutical, Inc.
Meltdown Fat Assault Beverage & Fat Incinerator Capsules
NARB Panel #171 (7.18.11)

    ``Before'' and ``after'' pictures depicting weight and fat loss are 
advertising claims that must be supported by competent and reliable 
evidence demonstrating that they are results a consumer could typically 
expect to achieve.

    Claims at Issue:

   Product packaging shows (a) ``before'' and ``after'' 
        pictures of a woman who lost 21 pounds and reduced her body fat 
        from 23.1 percent to 14.8 percent and (b) ``before'' and 
        ``after'' pictures of a man who lost 28 pounds and reduced his 
        body fat from 12.5 percent to 5.27 percent.

    NAD/NARB Findings: The ``before'' and ``after'' comparisons 
reasonably conveyed the message that the depicted weight/fat losses 
were typical results that consumers could expect to achieve through use 
of the product.
    However, there was nothing in the record to show that the weight/
fat losses depicted were what could typically be achieved. Further, 
there was no evidence to provide a reasonable basis to support a 
message that use of Meltdown Fat Assault would result in any visible 
weight or fat loss. NAD/NARB recommended that the advertiser 
discontinue these ``before'' and ``after'' pictures.
Endorsements, Testimonials, Disclosures

Nutrisystem, Inc. (Pinterest)
``Real Consumers. Real Success.''
Case # 5479 (6.29.12)

    NAD, following its review of ``Real Consumers. Real Success.''--a 
Pinterest board maintained by Nutrisystem, Inc.--determined that the 
weight-loss success stories ``pinned'' to such boards represent 
consumer testimonials and require the complete disclosure of material 
information.
    Nutrisystem's ``Real Consumers'' pinboard featured photos of 
``real'' Nutrisystem customers and highlighted their weight-loss 
successes. The customer's name, total weight loss and a link to the 
Nutrisystem website appeared below each photo.

    Claims at issue in NAD's review included:

   ``Christine B. lost 46lbs on Nutrisystem.''

   ``Michael H. lost 125 lbs. on Nutrisystem.''

   ``Lisa M. lost 115 lbs. on Nutrisystem.''

   ``Christine H. lost 223 lbs. on Nutrisystem.''

    Upon receipt of NAD's inquiry, the company asserted that necessary 
disclosures were inadvertently omitted from Pinterest. The advertiser 
stated that the testimonials at issue had appeared on Pinterest for 
less than two months, and said the disclosures were added immediately 
upon receipt of NAD's opening letter. NAD noted its appreciation that 
Nutrisystem took immediate steps to provide such disclosures.

Liquid HCG Diet, LLC
Liquid HCG Diet
Case #246 (6.16.10)

    Claims at Issue:

   ``Lose 30lbs. in a month, it's easy and quick!''

   ``Burns fat fast''

   ``Lasting results! Keep it off!''

   Becky and husband lost 14lbs in 2 days!''; website claim 
        ``Today is my second day on P2 and I lost 5.9lbs. and my 
        husband lost 8lbs.!''

    ERSP Findings: ERSP recommended that the marketer discontinue its 
weight loss claims in the context in which they are currently 
communicated and that it modify its use of consumer testimonials in a 
way that complies with Section 255 of the FTC's revised Guides 
Concerning the Use of Endorsements and Testimonials in Advertising.

Urban Nutrition, LLC
WeKnowDiets.com (and affiliated websites)
Case #219 (8.11.09)

    Claims at Issue:

   ``. . . there are now literally thousands of weight loss 
        products and diet programs available to choose from--that can 
        be a little confusing.''; ``Our goal is to give you a quick 
        snapshot of what options are available to you.''

   ``We have compiled the most comprehensive database of 
        information for people who are looking for a trimmer body and 
        healthier lifestyle.''; ``We have the largest weight loss 
        database in America.''

    ERSP Findings: ERSP determined that the representations made on 
WeKnowDiets and affiliated websites constituted an advertising message 
(i.e., a paid commercial message that has the purpose of inducing a 
sale or other commercial transaction or persuading the audience of the 
value or usefulness of a company, product or service) and that certain 
individuals writing favorable product reviews on the website may be 
considered endorsers. Because Urban Nutrition owned not only the 
websites at issue, but several products being reviewed on the websites, 
ERSP concluded that this relationship constituted a ``material 
connection'' that would not be reasonably expected by the audience and 
one that would have a significant effect on the weight or credibility 
given to the endorsement by that audience.

Iovate Health Sciences International
Hydroxycut Nutritional Supplement
Case #70 (1.17.06)

    Claims at Issue:

   ``I've reviewed the research. You can lose weight fast, 
        increase energy, and control appetite with Hydroxycut. In my 
        opinion nothing works better or faster.'' (Dr. Lydon)

   ``With the science of Hydroxycut, you can lose up to 4.5 
        times the weight than with diet and exercise alone.''

   ``I lost 29 pounds with Hydroxycut--Hydroxycut can get you 
        in peak shape. With diet and exercise only, you can't really 
        get where you want as quickly. You really need Hydroxycut to 
        speed things up and tighten you up. I quickly lost 29 pounds 
        [in 8 weeks] and 5\1/2\ inches off my weight using 
        Hydroxycut.*'' (Dr. Marshall)

    ERSP Findings: ERSP concluded that Dr. Lydon's claim communicated 
an unqualified parity claim that was not supported by Iovate. Although 
Dr. Marshall's testimonial was literally accurate, the fact that two 
muscle building products supplements were used in addition to 
Hydroxycut to achieve the results communicated in the advertisement was 
material information with respect to consumers interpretation of the 
claims that needed to be more prominently disclosed in the advertising.
Performance Claims

Hollywood Health & Beauty, LTD.
Trimbal-EXP200
Case #5112 (4.07.10)

    Claims suggesting that you can lose weight without diet and 
exercise were not supported by reliable scientific evidence.

    Claims at Issue:

   In a few minutes, this amazing capsule expands to become a 
        100 percent natural gastric balloon.

   It attracts, surrounds and absorbs some of the fat, 
        carbohydrates and sugars that you've eaten and they are 
        naturally flushed out without having a chance to be absorbed by 
        your body and converted to excess fat.

   ``This weight loss plan is 100 percent safe.''

   The effects were immediate.

   I ate everything I liked and as much as I liked.

   The first month, I lost exactly 33 pounds without any 
        effort.

   The most incredible thing was that my stomach quickly became 
        flat and firm.

   I could eat all the foods I like and as much as I wanted.

   I lost a total of 48 pounds in 7 weeks.

   When you use the Trimball-EXP200 capsule, you are going to 
        eat 2, 3 or even up to 4 times less, as you feel that your 
        stomach is FULL.

   You will not experience any feelings of hunger.

   You will then automatically lose weight.

   These two properties have been confirmed by many clinical 
        studies conducted in the USA by leading dietary researcher, 
        Professor Walsh from the University of Minnesota.

    NAD Findings: The advertiser's supplement contained glucomannan, an 
ingredient that forms a ``bulk'' in the stomach by absorbing water and 
possibly reducing hunger pangs.
    The advertiser submitted one small study of 20 obese subjects who 
took glucomannan fiber and were instructed not to change their eating 
or exercising habits. Over an 8-week period, the treatment group lost 
5.5 pounds.
    NAD determined that it was necessary and appropriate for the 
advertiser to discontinue all of its claims because the study did not 
support the claims that glucomannan was as effective as gastric bypass 
surgery, that consumers could eat whatever they liked and still lose 
weight or that a consumer would typically lose large amounts of weight 
as claimed.
    Further, NAD concluded that this advertising included several 
claims that have been identified by the FTC ``red flags'' as bogus 
weight loss claims, including claims that the product can cause weight 
loss of more than two pounds a week; works without dieting or exercise; 
causes substantial weight loss no matter what or how much the consumer 
eats; blocks the absorption of fat or calories to enable consumers to 
lose substantial weight; and can safely enable consumers to lose more 
than three pounds per week for more than four weeks.

Smart for Life Weight Management Centers
Smart for Life Cookies
Case #242 (6.1.10)

    Claims at Issue:

   ``Eat Cookies. Lose Weight. It's that simple.''

   ``I lost 105 lbs'' [Lost 105 lbs in 12 months]

   ``I lost 115 lbs in 6 months'' [Lost 115 lbs in 6 months]

   ``Lost 25 lbs in 5 weeks''

    ERSP Findings: ERSP determined that it would not be unreasonable 
for consumers to take away the message that besides eating the Diet 
Cookies, they need not take any further action in order to lose weight. 
ERSP found that eating a low calorie dinner was a material condition to 
obtaining the claimed weight loss and must be prominently, clearly and 
conspicuously disclosed. ERSP also recommended that the marketer 
properly qualify the limitations of the applicability of consumer 
testimonials in future advertising.

Emson, Inc.
Ab Rocket Twister System
Case #268 (6.13.11)

    Claim at Issue:

   ``Lose up to 2 inches off your waist in just 12 days 
        guaranteed or your money back,''; ``. . .in as little as 5 
        minutes a day with the Ab Rocket Twister, you're on your way to 
        tighter, sexier abs guaranteed.''; ``I've lost over 50 pounds 
        and 21 inches.''

    ERSP Findings: ERSP determined that when certain versions of the Ab 
Rocket Twister advertising are viewed in their entirety, it would not 
be unreasonable for consumers to interpret the advertising as 
communicating that the stated results were based on use of the Ab 
Rocket Twister alone.
    ERSP recommended that the marketer should modify such advertising 
to clearly communicate that the weight and inches lost depicted in the 
advertising were based upon adherence to all components of the Ab 
Rocket Twister System, not just use of the machine itself.

MZ Direct Response, LL&C
Velform Sauna Belt
Case #75 (2.21.06)

    Claims at Issue:

   Immediately see real results with no effort.''

   ``Lose an in inch in fifty minutes.''

   ``A safe sure way to lose weight.''

   ``We are able to target specific areas such as the abdomen, 
        hips, and thighs.''

    ERSP Findings: ERSP concluded that any performance claims 
characterized in an ``instant'' or ``immediate'' context that are 
inconsistent with results obtained after 50 minutes of product usage 
should be either adequately qualified or discontinued. ERSP also 
recommended that the marketer refrain from suggesting that consumers 
will lose meaningful (i.e., ``real results'') weight with ``no 
effort.'' ERSP also determined that the marketer's claims to ``Lose an 
inch in 50 minutes'' as well as the on camera demonstrations of people 
losing more weight and inches in 50 minutes than reported by in the 
study should be discontinued or modified. Lastly, it was recommended 
that the marketer should also modify its computer-generated ``slim-
down'' depiction to accurately reflect the evidence and not overstate 
the amount and areas of weight/inches loss that can be realized by use 
of the Velform Sauna Belt.
``Dr. Recommended'' Claims

iSatori Technologies. LLC
Lean System 7
Case #4324 (4.22.05)

    ``Doctor Recommended'' claims can carry great weight with consumers 
and, consequently, require strong evidence.

    Claim at Issue:

   Doctor Recommended

    NAD Findings: In addition to making unsupported ``clinically 
proven'' claims such as Lean System 7 will burn up to 930 extra 
calories a day, the advertiser also claimed that its product was 
``doctor recommended.'' In support of this claim, the advertiser 
submitted a testimonial from one doctor. NAD has recognized that 
``Doctor Recommended'' claims can carry great weight with consumers 
and, consequently, require strong evidence. It is well-established that 
``doctor recommended'' claims must be supported by well-conducted 
physician surveys based on doctors' actual experience in their daily 
practice. Here, the advertiser did not produce any evidence regarding 
its doctor recommended claim other than an unsupported testimonial from 
one doctor.

    Senator McCaskill. Thank you.
    Mr. Mister.

             STATEMENT STEVEN M. MISTER, PRESIDENT

 AND CHIEF EXECUTIVE OFFICER, COUNCIL FOR RESPONSIBLE NUTRITION

    Mr. Mister. Good morning. My name is Steve Mister, and I'm 
the President and CEO of the Council for Responsible Nutrition.
    CRN is the leading trade association representing the 
manufacturers and marketers of dietary supplements, functional 
foods, and their nutritional ingredients. We empathize with the 
many Americans who are vulnerable to false promises for losing 
weight fast, with everything from rubber pants and bracelets to 
sprays, creams and exercise gadgets, and, yes, dietary 
supplements. Collectively, Americans spend over $40 billion a 
year trying to lose weight. The Nutrition Business Journal 
reports that dietary supplements and meal replacements 
formulated for weight loss are a $5.3-billion-a-year industry, 
a small fraction of the total, but a significant sum 
nevertheless.
    But, before the Committee throws the baby out with the bath 
water, we want to be clear that there are a number of dietary 
ingredients used in weight-loss supplements, when combined with 
moderate exercise programs and sensible eating, that have been 
shown in well-conducted clinical trials to be safe and 
beneficial for weight management. The Dietary Supplement Health 
and Education Act requires that all supplements must have 
substantiation for their claims, and that includes weight-loss 
claims.
    The FDA's regulations for labeling establish a detailed 
approach for what constitutes adequate substantiation for these 
``structure/function'' claims, which requires the claims be 
supported by well-conducted human trials with statistically 
significant benefits.
    Along with the consumers who are duped by these false and 
misleading claims, the responsible supplement industry who 
complies with these standards also stands to lose when 
unscrupulous marketers take advantage with misleading and 
unsupported ads. I'm here today to reinforce the commitment of 
CRN's members to help address these scams and frauds in the 
weight-loss marketplace.
    But, unfortunately, the reality of the current weight-loss 
market is that it is a tale of two industries: legitimate 
manufacturers who responsibly produce products that work and 
make claims for their products that are within the bounds of 
the law, and then, on the other hand, the unscrupulous players 
who prey on consumer desperation and their insatiable desire to 
be thin, and will say almost anything to make a quick profit.
    The Federal Trade Commission has the authority to enforce 
the prohibition on false, misleading, and deceptive claims made 
in the advertising of weight-loss products. CRN has publicly 
supported, and will continue to applaud, the numerous 
enforcement actions brought by the FTC in recent years, and the 
more than $438 million in restitution and civil penalties 
assessed by the Commission against deceptive advertising with 
respect to weight-loss products since 2004.
    Enforcement sweeps like the FTC's ``Operation Waistline'' 
and, more recently, ``Failed Resolution,'' and its media 
awareness campaigns like ``Gut Check,'' help to remove 
misleading claims, but they also alert the public while sending 
a message of deterrence through the industry. And CRN applauds 
them for that. However, the reality is that, in this Internet 
Age, along with a proliferation of cable television, talk 
radio, and various online media, and the increasing pressures 
for ad revenue among shrinking print media, both the FTC and 
the FDA have insufficient resources to combat the number of 
deceptive claims in the market. Some media outlets, eager to 
accept advertising dollars, will turn a blind eye to 
advertising copy that clearly violates the law and deceives 
consumers.
    So, in 2006, CRN began an industrywide self-regulatory 
program with the National Advertising Division (NAD), as you've 
heard, to help self-police the advertising claims of dietary 
supplement marketers. CRN has committed over $2 million to 
underwrite this program, which has already investigated almost 
200 challenges of the claims made by supplement marketers, many 
of which involve weight-loss claims. I am proud of the track 
record of this program for providing fair, thoughtful, and 
transparent decisions, for achieving a high rate of industry 
participation, and for the precedents that it sets with these 
decisions to deter others in the industry from making similarly 
fraudulent claims.
    CRN's members are committed to manufacturing and marketing 
high-quality, safe, beneficial products and to ensure that our 
consumers receive truthful, accurate, nonmisleading information 
on supplements and nutritional products.
    We believe the challenge for legitimate weight-loss 
products is essentially this: American consumers 
unrealistically yearn for a magic bullet, and unscrupulous 
marketers will take advantage of these desires with hollow 
promises. Like a successful weight-loss program, though, the 
solutions are not easy. Significant first steps should include: 
increasing resources and priorities for enforcement of the 
existing legal requirements by both the FTC and the FDA; 
expanding and strengthening self-policing programs among 
manufacturers and marketers in the industry, like our 
initiative with the NAD; calling on media outlets and online 
retailers to conduct their own advertising clearance before 
accepting ads with claims that are illegal and simply too good 
to be true; and finally, educating consumers to be realistic 
about their weight-loss strategies and their expectations, to 
make them less vulnerable to outrageous and unsupported claims.
    Thank you for the opportunity to share our views with the 
Committee.
    [The prepared statement of Mr. Mister follows:]

 Prepared Statement of Steven M. Mister, President and Chief Executive 
               Officer, Council for Responsible Nutrition
    Good morning. My name is Steve Mister, and I am the President and 
CEO of the Council for Responsible Nutrition.
    The Council for Responsible Nutrition (CRN) appreciates this 
opportunity to provide testimony to the Senate Subcommittee on Consumer 
Protection, Product Safety and Insurance. We want to reassure you and 
your colleagues, your constituents and our customers that CRN's members 
are committed to manufacturing and marketing high quality, safe and 
beneficial products that have a valuable and appropriate role in weight 
management regimens. CRN is also committed to ensuring that consumers 
receive truthful, accurate and non-misleading information about dietary 
supplements on the label and in advertising.
    CRN, founded in 1973 and based in Washington, DC, is the leading 
trade association representing dietary supplement manufacturers and 
ingredient suppliers. CRN companies produce a large portion of the 
dietary supplements and nutritional products marketed in the United 
States and globally. Our member companies manufacture popular national 
brands as well as the store brands marketed by major supermarkets, drug 
stores and discount chains. These products also include those marketed 
through natural food stores and mainstream direct selling companies. 
CRN represents nearly 150 companies that manufacture or market dietary 
supplements, functional foods and their nutritional ingredients, or 
supply products and services to those suppliers and manufacturers. Our 
member companies comply with a host of Federal and state regulations 
governing dietary supplements in the areas of manufacturing, marketing, 
quality control and safety. Our supplier and manufacturer member 
companies also agree to adhere to additional voluntary guidelines as 
well as to CRN's Code of Ethics.
    Weight management is a serious issue. According to the 2013 Gallup-
Healthways Well-being Index, the number of adults in the U.S. who need 
to be more conscious of their weight continues to climb: 27 percent are 
classified as obese, and another 35 percent are considered 
overweight.\1\ At the same time, a Gallup poll from last November 
indicates that 51 percent of Americans say they want to lose weight, 
but just under half of them--only 25 percent--say they are seriously 
trying to lose weight.\2\
---------------------------------------------------------------------------
    \1\ U.S. Obesity Rate Climbing in 2013, Gallup, Nov. 1, 2013 http:/
/www.gallup.com/poll/165
671/obesity-rate-climbing-2013.aspx.
    \2\ Americans' Desire to Shed Pounds Outweighs Effort, Gallup, Nov. 
29, 2013, http://www
.gallup.com/poll/166082/americans-desire-shed-pounds-outweighs-
effort.aspx.
---------------------------------------------------------------------------
    So it's not surprising that these statistics translate into many 
Americans who are eager to drop a few pounds. We empathize with the 
many Americans who are vulnerable to false promises for losing weight 
fast with everything from rubber pants and bracelets, to sprays, 
creams, exercise gadgets and dietary supplements. Collectively, 
Americans spend about $40 billion a year trying to lose weight.\3\ The 
Nutrition Business Journal reports that dietary supplements and meal 
replacements that are formulated for weight loss are a $5.3 billion 
industry \4\ in the U.S., only a fraction of the total, but still a 
significant sum.
---------------------------------------------------------------------------
    \3\ Weight Management Trends in the U.S., 2nd ed. (March 15, 2013) 
http://www.pack
agedfacts.com/Weight-Management-Trends-7429799/.
    \4\ Unpublished data from Nutrition Business Journal, provided June 
12, 2014.
---------------------------------------------------------------------------
    Now let's be clear: a number of dietary ingredients in weight loss 
supplements, when combined with moderate exercise programs and sensible 
eating, have been shown in well-regarded clinical trials to be safe and 
effective for weight management. The truth is that many dietary 
supplements, meal replacement programs and specially formulated foods 
can be beneficial as part of a weight management program. They can 
increase weight loss over diet and exercise alone, and can help people 
lead more active lifestyles that help to keep the pounds off.
    At the same time, however, other products make outrageous claims 
that promise the weight will fall off without changing what you eat, 
and without exercise. Some products tout the latest ``miracle'' 
ingredients, falsely claim to be ``clinically proven'' and may not even 
contain the levels of ingredients they promote. Some scammers trap 
consumers in fraudulent credit card programs or offer money-back 
guarantees but become impossible to track down when the product doesn't 
work. And that is the reality of the current weight loss market: it is 
a tale of two industries--with legitimate manufacturers who responsibly 
produce products that work and make claims for their products within 
the bounds of the law, and unscrupulous players who prey on desperation 
and the insatiable desire to be thin, and will say almost anything to 
make a quick profit. Along with consumers who are duped by false and 
misleading claims, the responsible supplement industry, who complies 
with these standards, also stands to lose when unscrupulous marketers 
take advantage with misleading and unsupported ads.
    The Dietary Supplement Health and Education Act (``DSHEA'') 
requires that all supplements must have substantiation for the claims 
they make, and that includes weight loss claims. The Food and Drug 
Administration's (FDA) regulations establish detailed requirements for 
what constitutes adequate substantiation for these ``structure/function 
claims,'' which are modeled after Federal Trade Commission (FTC) 
standards for truthful and non-misleading advertising claims. These 
requirements can be found in the FDA's ``Guidance for Industry: 
Substantiation for Dietary Supplement Claims Made Under Section 
403(r)(6) of the Federal Food, Drug and Cosmetic Act'' \5\ and its 
``Guidance for Industry: Structure/Function Claims, Small Entity 
Compliance Guide.'' \6\ The generally accepted standards for the 
substantiation of weight management claims include requirements that 
there must be research on humans showing demonstrable weight loss; that 
the studies use the same ingredients at the same levels as contained in 
the products; and that the research shows a statistically significant 
benefit over placebo in double-blinded, placebo-controlled studies.
---------------------------------------------------------------------------
    \5\ http://www.fda.gov/food/guidanceregulation/
guidancedocumentsregulatoryinformation/ucm073200.htm.
    \6\ http://www.fda.gov/food/guidanceregulation/
guidancedocumentsregulatoryinformation/ucm103340.htm.
---------------------------------------------------------------------------
    CRN is also greatly concerned about the ingredients found in some 
weight loss products that masquerade as dietary supplements for weight 
loss. Despite their labeling claims of being ``all natural'' and 
``completely safe,'' some of these products contain prescription drug 
ingredients and are illegally and erroneously marketed as dietary 
supplements. FDA has taken enforcement actions with respect to no less 
than 250 products in the past six years. These products have contained 
ingredients like sibutramine, a powerful weight loss pharmaceutical 
ingredient that was removed from the market by FDA for safety reasons. 
These weight loss products are potentially dangerous to consumers 
because they may cause side effects or adverse interactions with other 
drugs, and because the product labeling fails to disclose the presence 
of these powerful substances, consumers are unaware of their presence. 
Although FDA has brought civil and criminal actions against some of the 
marketers of these illegal products, the agency must do more to protect 
consumers, including working more closely with the U.S. Justice 
Department to bring criminal charges against those who introduce these 
dangerous products into the market.
    Just as DSHEA calls on FDA to oversee claims made in dietary 
supplement labeling, the Federal Trade Commission Act authorizes the 
FTC to enforce the prohibition on false, misleading and deceptive 
claims made in the advertising of weight loss products. The FTC's 
``Dietary Supplements: An Advertising Guide for Industry'' \7\ 
describes in detail how the general principles of the statute apply 
specifically to the health-related claims made for dietary supplements, 
namely that advertising claims must be truthful, not misleading and 
substantiated with credible scientific evidence.
---------------------------------------------------------------------------
    \7\ http://business.ftc.gov/documents/bus09-dietary-supplements-
advertising-guide-industry.
---------------------------------------------------------------------------
    CRN has publicly supported--and will continue to applaud the 
numerous enforcement actions brought by the FTC in recent years and the 
more than $438 million in fines and penalties assessed by the 
Commission since 2004 against deceptive weight loss advertising. 
Enforcement sweeps like the FTC's ``Operation Waistline'' \8\ and its 
media awareness programs, like ``Gut Check: A Reference Guide for Media 
on Spotting False Weight Loss Claims,'' \9\ help to remove misleading 
advertising, and also alert consumers and send a message of deterrence 
throughout the industry.
---------------------------------------------------------------------------
    \8\ http://www.ftc.gov/news-events/press-releases/1997/03/ftc-
announces-operation-waistline-law-enforcement-and-consumer.
    \9\ http://www.business.ftc.gov/documents/0492-gut-check-reference-
guide-media-spotting-false-weight-loss-claims.
---------------------------------------------------------------------------
    For example, FTC's recently released ``Gut Check'' Guide offers 
tips for media to help identify weight loss claims that are likely to 
be too good to be true. It cautions media to review advertising before 
accepting it because certain claims from advertisers may be a tip-off 
to deception if the product claims to:

  1.  cause weight loss of two pounds or more a week for a month or 
        more without dieting or exercise;

  2.  cause substantial weight loss no matter what or how much the 
        consumer eats;

  3.  cause permanent weight loss even after the consumer stops using 
        the product;

  4.  block the absorption of fat or calories to enable consumers to 
        lose substantial weight;

  5.  safely enables consumers to lose more than three pounds per week 
        for more than four weeks;

  6.  cause substantial weight loss for all users; or

  7.  cause substantial weight loss by wearing a product on the body or 
        rubbing it into the skin.

    FTC also provides similar tips in its consumer information article 
``Weighing the Claims in Diet Ads,'' which warns consumers about ads 
promising quick and easy weight loss without diet or exercise and what 
claims are most likely to be untrue.
    However, the reality is that in this Internet age, along with the 
proliferation of cable television, talk radio and various online media, 
and increasing pressures for shrinking ad revenue among print media, 
both the FTC and FDA have insufficient resources to combat the number 
of deceptive claims in the market. Some media outlets, eager to accept 
advertising dollars, turn a blind eye to advertising copy that clearly 
violates the law. Like the carnival game ``whack-a-mole,'' it seems 
that every time the FTC targets one company for deceptive advertising, 
two more pop up. Responsible firms, like CRN's members, suffer along 
with consumers as legal, reasonable and defensible advertising for 
weight management gets dwarfed by outlandish claims that violate the 
law and deceive consumers.
    In 2006, CRN began an industry program with the Council of Better 
Business Bureaus to help self-police the advertising claims of dietary 
supplement marketers. Over the past seven years, the National 
Advertising Division (NAD) has conducted almost 200 challenges of the 
claims made by supplement marketers, many of which involve weight loss. 
CRN has committed over $2 million to underwrite the program at the NAD 
devoted to the investigation of supplement claims. CRN is proud of the 
track record this program has for providing fair, thoughtful and 
transparent decisions, for achieving a high rate of participation with 
those decisions, and for the precedential effect these decisions have 
to deter others in the industry from making similarly fraudulent 
claims.
    Almost 20 percent of all the cases the CRN-funded program with the 
NAD has considered involve claims for weight loss. Commonly recurring 
problems with these claims include promoting that the ingredients are 
``clinically proven'' or ``doctor recommended'' when they are neither; 
claiming clinical research for a product when the study did not examine 
the same ingredients or ingredients at the same levels as they appear 
in the product, and test results that are wildly overstated in the 
advertising. While participation by the advertiser is voluntary, in 
cases where the advertiser refuses to participate, or where the NAD 
becomes aware that the advertiser fails to implement the changes 
recommended in the decision, those cases are referred to the FTC for 
review and possible legal action.
    CRN has also developed a Roadmap for Retailers,\10\ a six-page 
brochure to assist those who interact with our consumers, which reminds 
them that unsupported personal testimonials, promises of cures and 
treatments, and exaggerated claims that are not supported by the 
research are both illegal and detrimental to keeping the trust of their 
customers. CRN also provides ``A Dozen Tips for Consumers,'' \11\ to 
help educate the public how to make savvy purchasing decisions. 
Separately, we have developed guidelines for the industry for the 
labeling of caffeine content in dietary supplements and functional 
foods, a common concern especially among weight loss products,\12\ and 
we maintain a Code of Ethics for CRN members.\13\
---------------------------------------------------------------------------
    \10\ http://www.crnusa.org/roadmap/.
    \11\ http://www.crnusa.org/CRNfactsheetconsumertips.html
    \12\ http://www.crnusa.org/caffeine/guidelines.html.
    \13\ http://crnusa.org/who_ssr_code.html.
---------------------------------------------------------------------------
    CRN's members are committed to manufacturing and marketing high 
quality, safe and beneficial products. We are likewise committed to 
ensuring that consumers receive truthful, accurate and non-misleading 
information on dietary supplements. We believe that the challenge with 
weight loss products--whether they are dietary supplements, meal 
programs, clothing or gadgets--is that American consumers' unrealistic 
yearnings for a magic bullet align with the temptation for unscrupulous 
marketers to take advantage of these desires with hollow promises.
    Like a successful diet, the solutions are not simple or easy; 
however, we believe there are four significant steps that can be taken 
to help address these issues:

  1.  Expanding and strengthening voluntary programs among 
        manufacturers and marketers of weight loss products, like our 
        initiative with the NAD. These self-regulatory programs help 
        consumers identify products that are likely to work and avoid 
        those that aren't. Third-party certification programs that 
        audit manufacturing practices and test ingredients against 
        label claims can also help responsible marketers to distinguish 
        their products from ones that don't measure up.

  2.  Increasing resources and priorities for the enforcement of 
        existing legal requirements by both the FTC and FDA. The legal 
        standards for substantiation of claims made in product labeling 
        and advertising, including Internet websites, are sufficient to 
        protect consumers while balancing the rights of marketers to 
        make truthful statements about their products and to present 
        emerging science. However, more needs to be done to target bad 
        actors and remove untruthful claims. We urge Congress to 
        provide adequate resources to both FDA and FTC with direction 
        to the agencies to make prosecution of untruthful advertising 
        and labeling a priority.

  3.  Calling on media outlets and online retailers to conduct their 
        own advertising review before accepting advertising with claims 
        that are illegal and simply ``too good to be true.'' Claims of 
        dramatic weight loss that don't require any change in diet or 
        exercise, that promise permanent fat reduction or that offer 
        overnight results are inherently suspect. Media outlets, 
        including newspapers, magazines, radio and television stations, 
        Internet websites and social media sites, all have a role in 
        helping to prevent consumer fraud. Incentives for these venues 
        to screen advertising and reject ads that are blatantly 
        deceptive must be strengthened.

  4.  Educating consumers to be realistic about weight loss strategies 
        and expectations to make them less vulnerable to outrageous and 
        unsupported claims. When consumers better understand that 
        meaningful weight loss occurs slowly and steadily, and that so-
        called ``miracle'' products are non-existent, unscrupulous 
        marketers will find less demand for their potions and gimmicks.

    CRN shares this Committee's concerns about bad actors in the 
industry and we denounce false, misleading or deceptive marketing 
practices--activities engaged in by a few who have damaged the 
reputation of the responsible industry. We look forward to cooperating 
with the other witnesses at today's hearing to develop solutions that 
strengthen the trust of consumers in dietary supplements.
    Thank you for the opportunity to share our views with the 
Committee.

    Senator McCaskill. Thank you, Mr. Mister.
    Mr. Haralson.

    STATEMENT OF ROBERT H. HARALSON IV, EXECUTIVE DIRECTOR, 
                        TrustInAds.org 

    Mr. Haralson. Chairman McCaskill, Ranking Member Heller, 
and distinguished members of the Subcommittee, thank you for 
the opportunity to testify today about TrustInAd.org's member-
companies' efforts to combat fraudulent online advertising for 
weight-loss products. My name is Rob Haralson, and I am the 
organization's Executive Director.
    In my testimony, I will highlight how our member companies 
are incentivized to keep bad ads out of our systems. I will 
also note how they are investing significant resources in this 
area and have already removed millions of bad ads from their 
services.
    TrustInAds.org includes Internet industry leaders AOL, 
Facebook, Google, Twitter, and Yahoo!. We founded this 
organization to work together toward a common goal: protect 
people from malicious online ads and deceptive practices. With 
this effort, we are bringing awareness to consumers about 
online ad-related scams, working collaboratively to identify 
both trends in deceptive ads and best practices, and sharing 
our knowledge with policymakers and consumer advocates around 
the country.
    TrustInAds.org offers guidance to consumers on how to avoid 
scams through the regular release of what we call our ``Bad Ads 
Trend Alerts.'' These are consumer-friendly and easily 
digestible reports that examine a specific trend or trends we 
are seeing, and provides specific examples of bad ads and 
websites that the companies have removed from their platforms. 
We highlight the steps that the companies have taken to combat 
the problem, and give the consumers useful tips on how to make 
good choices online. Our website also includes a dedicated page 
where people can go to learn how to easily report a suspicious 
ad on any of our member companies' websites.
    Our first report, released in May, detailed ads for phony 
tech-support services. And yesterday, we released our newest 
report on fraudulent ads related to weight-loss products and 
dietary supplements. Our member companies have allocated 
significant resources to keep bad ads off their platforms. 
Without question, ensuring a positive user experience for all 
users is essential to maintaining a vibrant Internet ecosystem.
    Today, the sale of numerous weight-loss products and 
dietary supplements through advertising is seen across all 
mediums: print, broadcast, radio, and the Web. And, while most 
entities selling these kinds of products provide accurate and 
truthful information regarding the overall effectiveness, some 
bad actors, in an attempt to entice consumers, market products 
with outrageous claims and promises of dramatic weight loss. 
For the bad actors attempting to use online advertising, these 
kinds of claims violate both our member companies' advertising 
policies and existing laws aimed at protecting consumers. We 
applaud Federal agencies for recognizing the weight-loss scam 
problem and their active efforts to educate consumers about 
misleading claims.
    In addition to its active law enforcement against scammers, 
the FTC's Consumer Information Website has an entire section 
devoted to weight loss and fitness that outlines many of the 
advertisements that users could encounter on the Internet and 
other places, and debunks their claims. Stopping these ads is 
critical for online advertising companies, as well. 
Collectively, our member companies have hundreds of individuals 
on their respective teams, spanning policy, engineering, 
network security, and legal, that are dedicated to identifying 
and preventing this illegal activity.
    Fortunately, most of these types of ads never reach the 
user and are immediately rejected through automated filtering 
processes as soon as they are submitted. For those that are 
detected after they are published, they are immediately 
removed, and the advertiser account is reviewed. Temporary or 
permanent suspension of the advertiser account is then 
considered, depending on the severity of the ad's policy 
violations.
    User feedback also plays an important role in detecting bad 
ads, and our companies carefully review user complaints related 
to ads, and quickly take action when warranted.
    Over the course of the past 18 months, AOL, Google, 
Facebook, Twitter, and Yahoo! have collectively removed or 
rejected over 2 and a half million ads related to weight loss 
and dietary supplements due to numerous ads policy violations.
    While all stakeholders are working hard to stop these ads, 
weight-loss scammers, some who are incredibly sophisticated, 
work maliciously to find ways to avoid detection by agencies, 
falling within their guidelines, and circumvent our companies' 
automated filters. Working together, AOL, Facebook, Google, and 
Twitter, and Yahoo! are fully committed to improving their 
systems to help protect users across the Web. We believe that 
if we all work together to identify threats and stamp them out, 
we can make the Web a safer place for everyone.
    Again, thank you for this opportunity to testify.
    [The prepared statement of Mr. Haralson follows:]

   Prepared Statement of Robert H. Haralson IV, Executive Director, 
                             TrustInAds.org
    Chairwoman McCaskill, Ranking Member Heller and distinguished 
Members of the Subcommittee:
    Thank you for the opportunity to testify today on TrustInAds.org's 
member companies' efforts to combat fraudulent online advertising for 
weight loss products. My name is Rob Haralson and I am the 
organization's Executive Director.
    TrustInAds.org includes Internet industry leaders AOL, Facebook, 
Google, Twitter and Yahoo, and we founded this organization to work 
together toward a common goal: Protect people from malicious online 
advertisements and deceptive practices. With this effort, we are: 
bringing awareness to consumers about online ad-related scams and 
deceptive activities; collaborating to identify trends in deceptive ads 
and sharing best practices; and sharing our knowledge with policymakers 
and consumer advocates around the country.
    TrustInAds.org offers guidance to consumers on how to avoid scams 
through the regular release of what we call our Bad Ads Trend Alerts. 
These are consumer-friendly and easily digestible reports that examine 
a specific trend or trends we are seeing, and provide specific examples 
of bad ads and websites the companies have removed from their 
platforms. We highlight steps the companies have taken to combat the 
problem and give consumers useful tips on how to make good consumer 
choices online.
    In addition, our website includes a dedicated page where people can 
go to learn how to easily report a suspicious ad seen on any of our 
member companies' advertising platforms.
    Our first report, released in May, detailed ads for phony tech 
support services, and yesterday, we released our newest report on 
fraudulent ads related to weight loss products and dietary supplements.
    I have included this report as an attachment to my written 
testimony for the Subcommittee.
    Our member companies are committed to protecting people from 
malicious online advertisements and deceptive practices and have 
allocated significant resources to keep these kinds of bad ads off of 
their platforms. Without question, ensuring a positive experience for 
all users is essential to maintaining a vibrant and successful Internet 
ecosystem.
    Today, the sale of numerous weight loss products and dietary 
supplements through advertising is seen across all mediums--print, 
broadcast, radio and the web. And while most entities selling these 
kinds of products provide accurate and truthful information regarding 
their overall effectiveness, some bad actors--in an attempt to entice 
consumers--market products with outrageous, unrealistic claims and 
promises of dramatic weight loss.
    For the bad actors attempting to use online advertising, these 
kinds of claims violate both TrustInAds.org's member companies' 
advertising policies and existing laws aimed at protecting consumers.
    We applaud Federal agencies for recognizing the weight loss scam 
problem and their active efforts to educate consumers about misleading 
claims. In addition to its active law enforcement against scammers, the 
FTC's Consumer Information website has an entire section devoted to 
weight loss and fitness that outlines many of the advertisements that 
users could encounter on the Internet and debunks their claims. In 
addition, the Food and Drug Administration's (FDA) website brings 
regulatory actions against scammers and also provides consumers with 
helpful information about weight loss fraud.
    Stopping these ads is critical for online advertising companies as 
well. Collectively, TrustInAds.org member companies have hundreds of 
individuals on their respective teams spanning policy, engineering, 
network security and legal dedicated to identifying and preventing this 
illegal activity.
    Fortunately, most of these types of ads never reach the user and 
are immediately rejected through automated filtering processes as soon 
as they are submitted. For those that are detected after they are 
published, they are immediately removed and the advertiser account is 
reviewed. Temporary or permanent suspension of the advertiser account 
is then considered depending on the severity of the ads policy 
violation(s).
    User feedback also plays an important role in detecting bad ads, 
and our companies carefully review user complaints related to ads and 
quickly take action when warranted.
    Over the course of the past 18 months, AOL, Google, Facebook, 
Twitter and Yahoo have collectively removed or rejected over 2.5 
million ads related to weight loss and dietary supplements due to 
numerous ads policy violations.
    While all stakeholders are working hard to stop these ads, weight 
loss scammers, some who are incredibly sophisticated, work maliciously 
to find ways to avoid detection by agencies, falling within their 
guidelines, and circumvent our companies' automated filters. Given 
this, each company has allocated substantial technical, financial and 
human resources to stop bad advertising practices like these and 
protect users on their platforms and across the web.
    The steps our member companies have taken aim to complement the 
continued efforts by agencies such as the FTC to enforce existing law 
to ensure that consumers are presented with truthful and accurate 
information in online ads.
    Working together, AOL, Facebook, Google, Twitter and Yahoo are 
fully committed to improving their systems to help protect users across 
the web, contributing research, and facilitating industry initiatives 
to combat bad online ads. We believe that if we all work together to 
identify threats and stamp them out, we can make the web a safer place 
for everyone.
    Again, thank you for this opportunity to testify.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                                 ______
                                 

    Senator McCaskill. Thank you, Mr. Haralson.
    Dr. Fabricant.

 STATEMENT OF DANIEL FABRICANT, Ph.D., CHIEF EXECUTIVE OFFICER 
      AND EXECUTIVE DIRECTOR, NATURAL PRODUCTS ASSOCIATION

    Dr. Fabricant. Thank you. Thank you, Madam Chair, members 
of the Committee. Thank you for this opportunity to discuss and 
participate in this panel discussion.
    I am Dr. Daniel Fabricant, CEO and Executive Director of 
the National Products Association, the oldest and largest trade 
association in the natural products industry. We represent 
thousands of retailers, manufacturers, suppliers, and 
distributors of health foods, dietary supplements, natural 
personal care, and the millions of Americans who use 
supplements each year. While some of our members are household 
names, most are small-business owners, many women-owned, who 
got into this business because they want to help people live 
truly healthier lives.
    Our first rule to customers is: Always consult with your 
healthcare provider and that dietary supplements are part of a 
broader, healthier lifestyle that includes diet and exercise.
    Madam Chair, our members fully support efforts to combat 
fraud and to rules and regulations the Federal Government has 
to protect consumers. Deceptive advertising is illegal and 
should not be tolerated, period.
    Like you, we are especially concerned about fraud on the 
Internet. Our association was founded by brick-and-mortar 
independent retailers, not Internet-only or fly-by-night firms. 
Our members know that public trust with their customer is one 
of the main reasons that natural products are in such high 
demand.
    No one has more of an interest in weeding out fraud than 
our members, because bad actors only tarnish their good 
integrity. To support FTC, NPA has its own industry policing 
program, where members report questionable ad claims so bad 
actors can be disciplined. Our members are empowered to follow 
the Homeland Security rule as it relates to questionable ad 
claims: If you see something, say something.
    Under our Truth in Advertising Program, questionable ad 
claims are reviewed by a committee of industry attorneys to 
determine if they are over the line, and then we take two 
actions. The first is to mail a cease and desist letter to a 
company. I've attached an example of that in my testimony. The 
second is to refer cases to FTC and FDA, where potentially 
fraudulent advertising or disease claims exist. Since this 
program began, in 2010, it has resulted in 446 letters to such 
firms. Of those, 320 acknowledged the issues and made 
corrections. The remainder were submitted to FDA and FTC over 
that period of time. So, we do have a strong partnership with 
the regulatory agencies, but we do depend on Federal 
authorities to provide enforcement action and make all of this 
a reality.
    And here, while we see positive action, we also see some 
areas for consideration and some areas of concern. We've heard 
about existing enforcement authorities, but some are finally 
very used--being used for the first time. My former job was as 
director of Dietary Supplement Programs at FDA, where we used 
existing tools, like mandatory recall, administrative 
detention, injunctions and seizures, for firms--recidivist 
firms failing to meet minimal quality standards in making 
disease claims. FTC has, likewise, taken substantial actions 
against firms that have deceived consumers with regards to 
weight loss.
    NPA fully supports those efforts, as they demonstrate FTC's 
ample and adequate current authorities, but we're still 
wrestling with the Internet advertising today and the fly-by-
night issues, so where are we there with those? We believe FTC 
should consider using existing authorities more on the front 
end, to be more agile and disciplinary to companies without 
regard to their revenues. More aggressive enforcement of the 
so-called fly-by-nights needs to be just as important to the 
FTC as large-scale enforcement against larger revenue firms. 
FTC, in conjunction with Department of Justice and other 
agencies, currently use misdemeanor prosecutions, set civil 
money penalties for those already under consent orders or those 
who have violated other laws. However, we don't see as much use 
of these tools. Also, it appears there's a predilection by 
regulators to pursue more sizable and protracted cases, perhaps 
at the expense of more regulatory muscle on the front end 
against companies of any size or revenue stream. If FTC doesn't 
act and take down fly-by-nights on the front end early in the 
game, more will be tempted to get into the game.
    Last, when we support the FTC's mission, we're concerned 
with a recent development related to FTC consent orders. 
Obviously, consent orders are case-specific and not meant to be 
applied industrywide. However, we are seeing some evidence of 
this, which could have negative outcomes for consumers, from 
both a cost perspective but also potentially reducing the 
quality and quantity of information about the products 
available to them.
    When application of extrastatutory interpretations moves 
from consent orders into rules of general applicability, it's 
not beneficial to anyone, and particularly to consumers. One 
example would be FTC's new requirement--apparent new 
requirement that additional studies and research are necessary 
prior to advertising, like a requirement to conduct two double-
blind randomized control studies to support lawful structure 
function statements, which is not a current legal or statutory 
requirement. This is not only outside of the statute, but leads 
to unnecessary and inefficient use of resources, which can 
chill innovation and disincentivizes the very research needed 
to substantiate claims.
    This is also happening without any cost benefit on behalf 
of consumers or the economy. If such standards are applied 
generally, a firm investing in the currently required study 
that is well controlled and meets both the competent and 
reliable scientific standard would be prohibited from sharing 
that information from consumers. This actually results in less 
information being available to consumers, not more, and 
effectively changes the rules in the middle of the game. This 
is a critical concern to our members, as it appears to abridge 
protected speech, which could constitute a violation of APA or 
present possible First Amendment issues.
    We'd like to work with FTC and others to address these 
concerns and to help improve the enforcement regime, and 
ultimately protect consumers while giving them the widest 
access to the information that they need.
    Madam Chair, thank you for holding this hearing.
    [The prepared statement of Dr. Fabricant follows:]

Prepared Statement of Daniel Fabricant, Ph.D., Chief Executive Officer 
          and Executive Director, Natural Products Association
    Madam Chairperson and Members of the Committee;

    Thank you for the opportunity to participate in this very important 
panel discussion. I am Dr. Daniel Fabricant, the CEO and Executive 
Director of the Natural Products Association (NPA). NPA is a 78-year 
old association and is the oldest and largest trade association in the 
natural products industry. We represent the interests of more than 
10,000 locations, including retailers, manufacturers, suppliers and 
distributors of health foods, dietary supplements, natural personal 
care and the millions of Americans who use supplements each year.
    While some of our members are household names, the majority of our 
members are small business owners--many women-owned--who got into this 
business because they want to help people live healthier lives through 
the use of natural products. And Americans are looking more and more 
for natural products each and every day, because they see the 
difference natural products can make in their daily lives. In 2012, 
Americans spent $2.8 trillion on health care, including $267 billion on 
health-related products and services, like dietary supplements, weight-
loss programs and fitness club memberships. Our first rule to all 
customers is to always consult with your health care provider, and that 
dietary supplements are part of a broader healthy lifestyle that 
includes diet and exercise.
    Madam Chair, let me say at the outset that our members fully 
support efforts to combat fraud and to enforce the range of rules and 
regulations that the Federal Government has to protect consumers and to 
give them the information they need. Deceptive advertising is illegal 
and should not be tolerated, period.
    Advertising for weight loss covers a broad jurisdiction that spans 
a growing range of the economy, from exercise regimens, to meal 
systems, to cosmetic/spa type services and also includes a sector of 
the natural products industry in the form of dietary supplements.
    At the NPA, we share the concerns expressed by others at this 
hearing about the use of deceptive advertising, especially on the 
internet. Our association was founded by brick-and-mortar independent 
retailers, not Internet only, fly-by night outfits. Our members know 
that the public trust with their customers is one of the main reasons 
that natural products are so prevalent in the marketplace these days.
    In short, no one has more of an interest in weeding out fraud than 
our members, because bad actors only tarnish their good integrity. 
That's why we strongly support the Federal Trade Commission's (FTC) 
efforts.
    To support FTC further, NPA has its own industry policing program 
where members identify and report questionable ad claims so that bad 
actors can be disciplined by Federal authorities, including the FTC. In 
short, our members are empowered to follow the homeland security rule 
as it relates to questionable ad claims: if you see something, say 
something.
    NPA's educational foundation, The Natural Products Foundation (NPF) 
manages our Truth in Advertising (TIA) program. NPA members report 
questionable ad claims to an internal TIA committee of legal counsel. 
This special committee reviews claims to determine if they are over the 
line and then takes two actions.
    The first is to mail a cease and desist letter to a company it 
deems has crossed that line. I have an example of that letter here that 
I will attach to my testimony. The second is to refer cases to FTC and 
FDA where potentially fraudulent advertising persists.
    Since the truth in advertising program has begun, The TIA program 
has issued a total of 446 of these letters to companies. Of those, 320 
acknowledged the issues noted and made immediate changes. If companies 
do not take immediate action, the TIA committee refers them directly to 
FTC and FDA. Our TIA group also meets regularly with officials at each 
agency to help identify and weed out fraud.
    Our TIA program shows that NPA members want those who don't play by 
the rules brought into compliance or pushed out of any appearance of 
being a part of the legitimate industry that so many Americans look to 
for their health and wellness.
    So we view our role as playing a strong partnership with regulatory 
officials, since we share their goals and objectives. But we do depend 
on Federal authorities to provide that enforcement action to make all 
of this a reality. In this arena, we see positive action, as well as 
some areas for consideration and some of concern.
    As we have heard this morning, the dietary supplement industry is 
regulated both by the FTC as well as the Food and Drug Administration 
(FDA), where I served previously as the Director of Dietary Supplement 
Programs. FDA can take a substantial number of enforcement actions, and 
in the recent past has used some for the first time: including 
mandatory recall, administrative detention, and injunctions and 
seizures for those recidivist firms failing to meet minimal quality 
standards. As we heard earlier, under a Memorandum of Understanding 
(MOU) with the FDA, the FTC has primary regulatory responsibility with 
respect to the truth or falsity of all advertising (other than 
labeling) of foods, devices, cosmetics, and weight loss services. Under 
those current authorities, the FTC has taken substantial action against 
firms that have deceived consumers with regards to weight loss.
    NPA fully supports those efforts, as they demonstrate FTC's ample 
and adequate current authority to enforce against deceptive advertising 
practices and protect consumers against fraud. But as helpful a 
deterrent as these high-profile cases are, we still wrestle with the 
Internet advertising and fly-by-night issues we are discussing today, 
so what to do about that?
    We believe one area for consideration would be to encourage FTC to 
use existing authorities more on the front end: to be more agile and 
disciplinary to companies without regard to revenues. In other words, 
we think that more aggressive enforcement of the Internet fly-by-nights 
needs to be just as important a priority for FTC as the large-scale 
enforcement actions which we also support.
    For example, FTC currently has as part of its enforcement arsenal 
very effective tools like misdemeanor prosecutions and civil monetary 
penalties which it uses very well for those already under consent 
orders or who have violated other applicable laws. But in our view, it 
appears that there is a predilection by regulators to pursue these more 
sizable and protracted cases, perhaps at the expense of more regulatory 
muscle on the front end against companies of any size or revenue 
stream.
    A more balanced approach would both help curb the deceptive 
advertising and also serve as a helpful deterrent for other bad actors 
who might think they can get away with it. If FTC doesn't take down any 
fly-by-nights, more will unfortunately be tempted to get into the game.
    Lastly, while we support the FTC's mission to prevent and punish 
unfair and deceptive acts, we are concerned with a recent development 
as it pertains to the use of FTC consent orders, which may have 
unintended consequences for consumers. Obviously, consent orders are 
case specific: they are not designed to be applied across the industry. 
However, we are seeing some evidence that this is happening, which we 
believe could have negative outcomes for consumers both from a cost 
perspective, but also in potentially reducing the quality and quantity 
of information about products available to them.
    When application of extra-statutory interpretations moves from 
consent orders into rules of general applicability, such overreach is 
not beneficial to anyone and particularly to consumers. One example 
would be FTC's apparent new requirement that additional studies and 
research are necessary prior to advertising. Specifically, I'm 
referring to a requirement to conduct two double-blind, randomized 
control trials to support legal structure/function statements, which is 
not a current legal or regulatory requirement.
    This is not only outside of the statute, but leads to unnecessary 
and inefficient use of resources, which chills innovation and dis-
incentivizes the very research needed to substantiate claims (in an 
environment where recouping research dollars on natural products is 
very difficult because of the way the patent rules govern our industry, 
but that's a subject for another hearing).
    Moreover, this is being done without any cost-benefit analysis on 
behalf of consumers or the economy. For example, if such standards are 
applied generally, a firm investing in the currently-required study 
that is well controlled and meets both the competent and reliable 
scientific standards would be prohibited from sharing those findings 
with consumers. It would actually result in less information being 
available to consumers--not more--and effectively changes the rules in 
the middle of the game. This is a critical concern, as it appears to 
abridge protected speech, which could constitute a violation of the 
Administrative Procedure Act (APA) or present possible first amendment 
issues.
    We would like to work with FTC and others to address these 
concerns, to help improve the enforcement regime and ultimately to 
protect consumers while giving them the widest access to the 
information they need.
    Madam Chair, thank you for holding his hearing. We support efforts 
to stop illegal consumer fraud. We strongly support resources for 
government agencies to enforce the law, in addition to any discussion 
on how current programs can be aligned across agencies to better 
protect consumers.
    We stand ready to work with the Committee, the government, NGO's 
and supporting agencies to help identify and remove criminal activity 
which is the root cause of this matter, from the system.
    Thank you and I look forward to your questions.

    Senator McCaskill. Great. Thank you.
    We'll have questions. And we have votes that begin in a 
little less than an hour, so hopefully we'll have an 
opportunity, everyone who is here, to have at least two rounds 
of questions.
    I can't figure this out, Dr. Oz. I get that you do a lot of 
good on your show. I understand that you give a lot of great 
information about health, and you do it in a way that's easily 
understandable. You're very talented. You're obviously very 
bright. You've been trained in science-based medicine.
    Now, here are three statements you made on your show. ``You 
may think magic is make-believe, but this little bean has 
scientists saying they've found the magic weight-loss cure for 
every body type. It's green coffee extract.'' ``I've got the 
number one miracle in a bottle to burn your fat. It's Raspberry 
Ketone.'' ``Garcinia Cambogia. It may be the simple solution 
you've been looking for to bust your body fat for good.''
    I don't get why you need to say this stuff, because you 
know it's not true. So, why, when you have this amazing 
megaphone and this amazing ability to communicate, why would 
you cheapen your show by saying things like that?
    Dr. Oz. Well, if I could disagree about whether they work 
or not, and I'll move on to the issue of the words that I used. 
And just with regard to whether they work or not, take the 
green coffee bean extract, as an example. I'm not going to 
argue that it would FDA-muster if it was a pharmaceutical drug 
seeking approval, but among the natural products that are out 
there, this is a product that has several clinical trials. 
There was one large one, a very good-quality one, that was done 
the year we talked about this, in 2012. Listen, I give----
    Senator McCaskill. No, what I want to know--I want to know 
about that clinical trial, because the only one I know is 16 
people in India that was paid for by the company. In fact, at 
the point in time you initially talked about this being a 
miracle, the only study that was out there was the one with 16 
people in India that was written up by somebody who was being 
paid by the company that was producing it.
    Dr. Oz. Well, this paper argued that there was no one 
paying for it, but I have the four papers--five papers, 
actually--plus a series of basic science papers on it, as well.
    But, Senator McCaskill, if I--we can spend a lot of time 
arguing the merits of whether green coffee bean extract is 
worth trying or not worth trying. Many of the things that we 
argue that you do with regard to your diet are likewise 
criticizable. I mean, should you be on a low-fat diet, a low-
carb diet? We'd be--I've spent a good part of my career 
recommending that folks have a low-fat diet. We've come full 
circle on that argument now, and no longer recommend that, many 
of us who practice medicine, because we realized that it wasn't 
working for our patients.
    So, it is remarkably complex, as you know, to figure out 
what works for most people, even, in a dietary program. Even in 
the practice of medicine, we evolve by looking at new ideas, 
challenging orthodoxy, and evolving them.
    So, when I hold--you know, these are the five papers. These 
are clinical papers. And we can argue about the quality of 
them, very justifiably. I can pick part papers that showed no 
benefit, as well. But, at the end of the day, if I have 
clinical subjects, real people having undergone trials--and, in 
this case, I actually gave it to members of my audience. It 
wasn't a formal trial, it was just an----
    Senator McCaskill. Which wouldn't pass the--the trial you 
did with your audience, you would not----
    Dr. Oz. No, of course not.
    Senator McCaskill.--say that would ever pass scientific 
muster.
    Dr. Oz. No, I would never publish the paper. It wasn't done 
under the appropriation IRB guidance. That wasn't the purpose 
of it. The purpose was for me to get a thumbnail sketch, Was 
this worth talking to people about, or not? But, again, I don't 
think this ought to be a referendum on the use of alternative 
medical therapies, because, if that's the case--listen, I've 
been criticized for having folks come on my show talking about 
the power of prayer. Now, again, as a practitioner, I can't 
prove that prayer helps people survive an illness. I know they 
had as----
    Senator McCaskill. But, you don't have to buy prayer, Dr. 
Oz.
    Dr. Oz. It's hard to buy prayer. That's the difference.
    Senator McCaskill. Prayer is free.
    Dr. Oz. Yes, prayer is free. And people--that's a very good 
point.
    [Laughter.]
    Dr. Oz. Thankfully, prayer is free. And so, when--but, I 
see, in the hospital, when folks are feeling discomfort in 
their life--and a lot of it's emotional--when they have people 
praying for them, it lightens their burden.
    So, my show was about hope. I wanted--and, as you very 
kindly stated, we've engaged millions of people in programs, 
including programs we did with the CDC, to get folks to realize 
that there are different ways that they get to rethink their 
future, that their best years aren't behind them, they're in 
front of them, and they actually can lose weight.
    So, if I can just get across the big message that I 
actually do personally believe in the items that I talk about 
on the show. I passionately study them. I recognize that 
oftentimes they don't have the scientific muster to present as 
fact, but, nevertheless, I would give my audience the advice I 
give my family all the time--and I have given my family these 
products, specifically the ones you mentioned--then I--I'm 
comfortable with that part.
    The--where I do think I've made it more difficult for the 
FTC is that, in an intent to engage viewers, I used flowery 
language, I used language that was very passionate, but it 
ended up not being helpful, but incendiary. And it provided 
fodder for unscrupulous advertisers.
    And so, that clip that you played, which is over 2 years 
old--and I've done hundreds of segments since then--we have 
specifically restricted our use of words. We--literally not 
speaking about things I would otherwise talk about. There's a 
product that I've never talked about in the show that I feel 
very strongly about, because I know what will happen. I will 
say something very--in fact, we did a show with Yakon syrup, 
which you did not bring up. It was a--it is a South American 
root that had a big study published on it--I think, a very 
high-quality study--where they showed, not only did it help 
people lose weight, but, more importantly, helped their health. 
It was done on women who were diabetic. Done by an academic 
center down there. It was not funded by industry. And we talked 
about it, and I used as careful language as I could. And still 
there were Internet scam ads picking one or two supportive 
words, where of course I support them--I wouldn't be talking 
about it, otherwise----
    Senator McCaskill. Well----
    Dr. Oz.--and they still ended up out there.
    Senator McCaskill.--listen, I'm surprised that you are 
defending--I mean, I've tried to really do a lot of research in 
preparation for this hearing, and the scientific community is 
almost monolithic against you, in terms of the efficacy of the 
three products that you called miracles. And when you call a 
product a miracle, and it's something you can buy, and it's 
something that gives people false hope--I just don't understand 
why you needed to go there. You've got so much you do on your 
show that makes it different and controversial enough that you 
get lots of views. I understand you're in a business of getting 
viewers, but I would ask you to look at the seven claims that 
the FTC put out on the Gut Check. It's very simple. ``Causes 
weight loss of 2 pounds or more a week for a month without 
dieting or exercise; causes substantial weight loss, no matter 
how much you eat; causes permanent weight loss,'' like you 
said, ``looking for to bust your body fat for good.'' If you 
just look at those seven, and if you spend time on your show 
telling people that these are the seven things you should know, 
that there isn't magic in a bottle, that there isn't a magic 
pill, that there isn't some kind of magic root or acai berry or 
Raspberry Ketone that's going to all of a sudden make it not 
matter that you're not moving and eating a lot of sugar and 
carbohydrates. I mean, do you disagree with any of these seven?
    Dr. Oz. Senator McCaskill, I know the seven. I say those 
things on my show all the time. When I----
    Senator McCaskill. Well, then why would you say that 
something is a miracle in a bottle?
    Dr. Oz. My job, I feel, on the show is to be a cheerleader 
for the audience. And when they don't think they have hope, 
when they don't think they can make it happen, I want to look, 
and I do look, everywhere, including in alternative healing 
traditions, for any evidence that might be supportive to them. 
So, you pick on green coffee bean extract. With the amount of 
information that I have on that, I still am comfortable telling 
folks that, if you can buy a reputable version of it--and I say 
this all the time--I don't sell it, and these are not for long-
term use--and by the way, with green coffee bean extract as an 
example, it's 1 pound a week over the duration of the different 
trials that have been done. That happened to be the same amount 
of weight that was lost by the 100 or so folks on the show who 
came on. And half of them got a placebo. We actually got fake 
pills, gave it to half the people, real pills to the other 
half. And it's sort of the same thumbnail. I'm looking at--a 
rough idea--if you can lose a pound a week more than you would 
have lost, doing the things you should be doing already--you 
can't sprinkle it on kielbasa and expect it to work. But, if 
that trial data is what's mimicked in your life, and you get a 
few pounds off, it jumpstarts you and gives you confidence to 
keep going, and then you start to follow the things that we 
talk about every single day, including all those seven items. I 
think it makes sense.
    Senator McCaskill. Well, I'm going to give time to my 
colleagues now, and hopefully I'll have a chance to visit with 
some of the other witnesses in the next round. I will just tell 
you that--I know you feel that you're a victim, but sometimes 
conduct invites being a victim. And I think if you would be 
more careful, maybe you wouldn't be victimized quite as 
frequently.
    Dr. Oz. Senator McCaskill, it--those topics you mentioned 
are over 2 years old. I have not been talking about products in 
that way for 2 years. And it has not changed at all what I'm 
seeing on the Internet. And, frankly, it's getting worse. So, I 
completely heed your commentary, and I realize--to my 
colleagues at the FTC--that I have made their jobs more 
difficult. That's why I came today.
    Senator McCaskill. Good.
    Dr. Oz. I'm cheerleading for this process. I want to do 
anything I can to help, but taking away those words doesn't 
change the problem that's already happened.
    Senator McCaskill. Senator Heller.
    Senator Heller. Thank you.
    You're the popular person, I guess, on the witness stand 
today, Dr. Oz.
    [Laughter.]
    Senator Heller. And I just had a group of students, 
outside, and they all knew who you were. So, I asked these 
students, who--clearly, their parents or someone watch your 
show and pay attention.
    Let me ask--let's be real clear. Do you believe that 
there's a miracle pill out there?
    Dr. Oz. There's not a pill that's going to help you, long 
term, lose weight and live your--the best life without diet and 
exercise.
    Senator Heller. Do you believe there's a magic weight-loss 
cure out there?
    Dr. Oz. It--the word--if you're selling something because 
it's magical, no. If you're arguing that it's going to be like 
magic, because if you stop eating carbohydrates, you're going 
to lose a lot of weight, that's a truthful statement. You may 
not agree with the flowery use of the word ``magic,'' but it is 
true that most people cutting out simple carbs will lose 
weight.
    Senator Heller. Well, tell me what works for most people. 
You mentioned that to the Chairman. What works for most people?
    Dr. Oz. What works for most people is a diet based on real 
food, food that comes out of the ground looking the way it 
looks when you eat it, that's not been processed, with some 
physical activity. Most of weight loss, I believe, is about the 
food choices you make. Most are--keeping your weight low is 
about the physical activity you engage in.
    Senator Heller. OK. And it is true that you do not endorse 
any products or receive any money from any product sold?
    Dr. Oz. That is true.
    Senator Heller. OK. Now, you've worked--you said you had 
some ideas, because you've worked to stop advertisers from 
using your names and likeness. And, in your testimony, you 
address online advertisements. What would you like to see done?
    Dr. Oz. If I can just give three ideas. I'm just trying to 
be constructive.
    Senator Heller. I'd like to hear them.
    Dr. Oz. I think the private sector can help by creating a 
Quick Reference Registry that lists celebrities who are 
legitimately connected to products. So, I don't happen to have 
any products that I sell, but whether the services are being 
promised--Ellen Degeneres, Jimmy Fallon, Rachael Ray, and the 
list of scam celebrities goes on--if all of us made a list of 
what products we actually do work with, it would make it easier 
for Web hosting services to say, ``Well, it was--Dr. Oz doesn't 
have any products he sells, so then--how can they run an 
advertisement saying he's selling this?''
    Second idea, we have been--in whistleblower systems that 
are, in fact, in workplace safety, we have them for financial 
services. I think honest employees deserve compensation and 
reward if they help expose illegal behavior by their employers, 
and I think we ought to incentivize whistleblowers in this 
space, as well. It's that big of a problem. When I busted those 
scam artists in San Diego, there were people who worked in that 
company who knew what they were doing was wrong and might have 
come forward.
    And third, I would argue that we can create a private-
sector-funded bounty that would--might help with getting bounty 
hunters, effectively, on the Web to engage. People who have 
time and desire and knowledge to go after some of these folks. 
A lot of times, you know, the people who are victims of these 
infringements, myself included, many of the people on this 
panel, would love to do anything we can to empower private 
citizens to shut down scammers. If it helps the FTC, I think it 
might be worthwhile, considering a bounty system--again, funded 
by the private sector--not looking for new laws, nor are we 
looking for government funding of any of these initiatives.
    Senator Heller. Thank you.
    Mr. Haralson, what is your organization, TrustInAds.org, 
doing to stop these third-parties from placing ads on websites 
and perhaps those ads that are less truthful?
    Mr. Haralson. Well, again, as I pointed out in my 
testimony, you know, our companies are deeply incentivized to 
making sure that these ads stay off of our platforms. I think 
having user trust in the advertisements that they see is 
imperative to making sure that the Internet economy and this 
vibrant advertising ecosystem survives.
    When we do--I mean, our companies have very sophisticated 
automated filtering systems that look for this kind of stuff. 
And when we do find these types of ads, they're automatically 
removed, even from our systems, in most cases long before 
they're actually served by--or seen by users. But, at the same 
time, as we are notified or we do see bad ads that are on our 
platforms, they are immediately removed, the advertiser account 
is reviewed, and appropriate action is taken, when warranted.
    Senator Heller. Thank you.
    Mr. Chairman, thank you.
    Senator McCaskill. Senator Klobuchar.

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much, Chairman. Thank you 
for holding this hearing.
    Thank you, to all of you.
    Yesterday, I looked up the top-selling weight-loss products 
on Amazon. And even with the FTC's actions against green coffee 
marketers, green coffee is still a product in the top-20 
selling products. The rest of the products are currently 
Garcinia Cambogia-related products, which I understand was 
featured on your show, Dr. Oz, but it also was highlighted as a 
product and that advertisers used to scam consumers by creating 
a fake website, claiming to be Women's Health magazine.
    When it was on your show, did you talk about the side 
effects? And I know Senator McCaskill has questioned you at 
length about this. You said this was all 2 years ago, and 
you're not making these claims anymore. But, what--did you talk 
about the side effects then? And did the deceptive practices 
then coming out of that change how you've conducted your shows?
    Dr. Oz. So, I actually brought transcripts of these 
different shows. And we would, in each case, have an expert who 
spends their entire life dealing with dietary supplements talk 
about the different products. They review pluses and minuses in 
most of the--and I just went through and leafed through a few 
of these pages. But, as--you know, I look at these scripts, and 
I think to myself, ``I wish that they would have just played 
another 30 seconds of the little clip they used for the 
advertisements, that they--we often see on the Web.''
    So, as an example, with the Garcinia show, ``I'm going to 
say something for everyone to hear. Please listen carefully. I 
don't sell the stuff. I'm not making money on it. I'm not going 
to mention any brands to you, either, because I don't want you 
to control.'' I bring that up, because--and, by the way, 
elsewhere in the segment, I also talked specifically about the 
fact that, ``If you don't exercise and diet at the same time, 
it's not going to work. You know, folks, it's just--it's a 
pill. Don't go home thinking it's just a pill that's going to 
help you. But, together with the normal, natural things we tell 
you to do with the foods you eat or healthy lifestyle,'' et 
cetera. So, we make those points.
    You know what the biggest disservice I've done for my 
audience? It's not the flowery language that Senator McCaskill 
is criticizing me for. It's that I never told them where to go 
to buy the products. I wanted to stay above the fray, and I 
felt, in my own mind, that if I talked about specific companies 
selling high-quality products, it would seem like I was 
supporting those companies. And so, I never gave them the--the 
audience, an idea of where to go to buy the stuff. So, that 
opened up a huge market for folks to just make--take stuff, 
real stuff--doesn't, practically, matter--and start to use my 
name to try to sell. I left my audience hanging, thinking I was 
doing the ethical thing.
    And I firmly believe, if I had gone on and called it a 
miracle--and again, I'm not--it's not a miracle like it's, you 
know, going to work every day for the rest of your life for 
every person, but it's miraculous that something like this is 
out there, we don't know about it. If I had told them, ``Go buy 
these four companies' products, because they're the ones that 
are reputable,'' it would have killed this off. And I blame 
myself.
    Senator Klobuchar. So, what stopped you from doing that, 
then?
    Dr. Oz. I thought that it was commercial, that if I--a 
doctor shouldn't sell products. You wouldn't trust me if you 
came to me for advice and I said, ``You know, Senator, you've 
got, you know, a stubbed toe, here. Take my version of a 
salving cream, here''--it just doesn't sound and feel right to 
me. I really feel that--I--in the Internet Age, taking a 
bricks-and-mortar approach to it doesn't work. And I should 
have been savvy enough to say to myself--and I kick myself, 
still--maybe I'll do it in the future--that I should just say, 
``Here are the companies I trust. Just go buy their products, 
because they're not going to scam you, they're not going to 
make illegal claims.'' If I say that it helps you lose a pound 
a week for 8 weeks, which is what a trial says, and then 
someone on the Web takes that and changes it to, you know, 40 
pounds in 3 weeks, which you can only really do through an 
amputation, then all of a sudden, you know, it's like I said 
those things, and it hurts me and--part of the reason I came 
today, this is a huge problem for me.
    Senator Klobuchar. OK. And I--as someone that's seen these 
ads, they're very, very seductive, when you're looking through 
things and trying to figure out what--a good diet plan to go 
on. And I--I mean, you're going to have two choices, here. 
Either you don't talk about these things at all that are going 
to be susceptible to this kind of scam or you're going to have 
to be more specific, because right now it isn't working. And 
obviously you're not the only celebrity that has had this 
happen to them.
    And, I guess, Ms. Engle, I'd go back to you on this, is 
whether or not you think you have enough resources to go after 
this, what you think of Dr. Fabricant's idea that you shouldn't 
just be focused on fly-by-nights or--what do we need to do, 
here, to get a handle on this?
    Ms. Engle. The FTC does put a lot of resources behind our 
weight-loss fraud enforcement efforts, and we do pursue both 
fly-by-night companies and more established companies. The NPB 
Green--Pure Green Coffee case I mentioned was pretty much a 
fly-by-night company. We also pursued 11 different companies 
that were selling acai berry weight-loss products through fake 
news sites and affiliate marketing over the Internet, in 
addition to Sensa and some of the other more established 
companies.
    So, you know, we do look across the board. Unfortunately, 
there are a lot of players in this space. These cases can be 
time-intensive to investigate. We do look at the studies that 
are out there, very carefully. We hire experts. Often, the 
defendants will hire experts. We pay a lot of close attention, 
because we don't want to--you know, we want to be sure where 
the science is. We don't want to challenge something as false 
or misleading if, in fact, it has real efficacy, if the claims 
are substantiated.
    So, the cases are time-intensive, but, you know, we're 
trying to bring as many of them as possible and to get as much 
money back for consumers as we can.
    Senator Klobuchar. Do you think there should be more FDA 
regulation of these supplements and these kinds of things? 
Would that be helpful, beyond the advertising? I know we've had 
some votes on this and discussed this in Congress.
    Ms. Engle. Well, I can't--certainly can't speak for the 
FDA. I understand that they have their hands full with--in the 
case of dietary supplements, with adulterated products. They've 
taken number--a number of actions against weight-loss products 
that actually contain prescription drugs in them, and they're 
putting their resources there.
    Senator Klobuchar. But, do you think that we need a bigger 
approach to this than just looking at a celebrity list or 
advertisements if people are falsely relying on claims that 
aren't true?
    Ms. Engle. Well, I do think it would be helpful for the--
first of all, I think the approach taken by the TrustInAds.org 
organization with Google and the others is quite helpful. I 
think if--the media could do a better job of screening out 
these facially false claims, and we're hopeful that the BBB 
will work with us to better disseminate that and get that 
message across. And that can help just, you know, eliminate 
these--some of these ads, at least, from running.
    Senator Klobuchar. Thank you.
    Senator McCaskill. Ms. Engle, I know you've taken a lot of 
action against various companies--and some of them, fly-by-
night--but, what about the media outlets that run these ads? 
You all have never gone there. Talk about that. Is that an 
approach that you've considered? Is that one that you have 
authority to do? If you've got a media outlet that is, you 
know, particularly using a lot of fraudulent advertising, that 
appears to be fraudulent on its face, but yet they're not 
screening them out, why no enforcement action there?
    Ms. Engle. Well, the media enjoy significant First 
Amendment protections, so there are certainly those issues if 
we were to attempt to sue a media company for running a 
deceptive ad. Section 12 of the FTC Act does actually give us 
authority to pursue any entity that disseminates a false or 
misleading ad for a food, drug, device, or a cosmetic. But, we 
have--really thought it would--make more sense to work with the 
media voluntarily, cooperatively to--by issuing--actually, this 
Gut Check Guide that we issued earlier this year was a 
reissuance of the guidance we first issued back in 2003. We 
called it ``Red Flags.'' And we've renamed it. We had good 
success at that time, particularly with the magazines, in 
getting them to stop running ads containing these seven 
facially--false claims. And we think it--you know, it makes 
more sense for us to try to work voluntarily with the media.
    Senator McCaskill. Mr. Peeler, I know you've said that some 
media have done a sophisticated job in screening, and some 
haven't. Who's doing a good job, here, and who's doing a bad 
job?
    Mr. Peeler. It largely varies by the size of the media. The 
national broadcast media have historically had very rigorous ad 
screening programs, so you would not see the types of ads that 
you were showing today on the national advertising part of the 
media.
    Senator McCaskill. But, the national--the interesting thing 
is, those national broadcasting companies own a lot of the 
cable stations that these ads are appearing on.
    Mr. Peeler. And the----
    Senator McCaskill. It's the same ownership.
    Mr. Peeler. And the screening that is done for the 
affiliates and for the cable channels varies. And then, when 
you get down to smaller media--and I think radio is a good 
example. It's a local media, the advertising staffs are pretty 
small, and I think that's where something like what the FTC has 
just done highlighting seven false weight-loss claims, that 
even an ad buyer in a very small media could just sit and look 
at those seven claims and say ``yes'' for this and ``no'' for 
that. A claim that you're never have to diet again or that you 
can eat all you want and take this pill and lose weight, those 
claims we still see, and they shouldn't be getting on the media 
at all.
    Senator McCaskill. But, satellite radio is not local, and 
they're all over satellite radio.
    Mr. Peeler. Yes. There have been a number of changes in the 
technology that the industry needs to catch up with, you're 
exactly right.
    Senator McCaskill. So, you didn't want to say satellite 
radio, you just waited for me to say it.
    [Laughter.]
    Senator McCaskill. I do think that there is a problem 
there.
    Mr. Peeler. And I would add that there are really two 
things to look at in media screening. One is the traditional 
type of media screening that the broadcast networks do. The 
second is the program that Rob--Mr. Haralson--just talked 
about, which is trying to translate that to the new media and 
look at these claims really not on a text basis, but almost an 
algorithmic basis. And that's an area that has a lot of promise 
for real progress.
    Senator McCaskill. Talk a little bit about the fly-by-
nights. I think Dr. Fabricant's point that it's easier to go 
after L'Occitane and Sensa and companies that you can find that 
have buildings and that are actually manufacturing something 
and putting their label on it, than these post office boxes. 
And that's one of our conundrums in consumer protection in this 
subcommittee. So many hearings we've had, whether it's 
robocalls or other topics we've had hearings on, finding the 
post office box or finding the IP address, and taking action 
against those who are responsible, is very complicated in this 
world, especially when it--you're looking at technology, in 
terms of IP addresses that certainly many of them are not sited 
in this country. Tell me about what kind of resources you may 
need, or that you don't have, to do a better job after the fly-
by-nights.
    Ms. Engle. Yes. So, you're absolutely right. I mean, when 
you see an ad on the Internet--so, for us, the first thing is 
to try to figure out who's behind that ad. And it's not 
actually easy to do. What we're seeing a lot nowadays is that--
you know, that some company will be working with a number of 
affiliate marketers through an affiliate network, and so there 
is a whole host of different companies that are actually 
placing the little ads that you see. And then, when the 
consumer clicks on it, you know, one tiny trip--tip to a flat 
belly, or something like that--one weird old trick, you know, 
to lose weight, something like that--the consumer clicks on 
that, and, if they buy the product, then that affiliate gets 
paid, but that's not actually the company that's selling the 
product. There's another company who's behind the product. And 
it requires us to send out multiple rounds of subpoenas to the 
Web hosters and to the ad networks to try to figure out who's 
behind this, and then--and that was what we did, actually, in 
the acai berry sweep. And it--you know, it takes a significant 
amount of resources. We're able to do it. We have compulsory 
process authority--that is, we can subpoena this information. 
But, it is time-consuming.
    Senator McCaskill. Well, what about the middleman, here? 
Have you gone after the middleman, the ones that are actually--
the affiliates that you talk about that are actually the ones 
that are moving these ads around the Internet, and then they 
are really a conduit to the actual product company that is 
behind the curtain? Have you taken action against those folks 
that are actually placing the ``one secret to get rid of your 
belly fat''?
    Ms. Engle. Yes, we have. We have gone after affiliates. And 
one of the issues there is--and we've gone after some large 
affiliates--but, one of the issues there is, when we go in, we 
never know who--how big the company is. And sometimes it turns 
out they're quite small, or they haven't made many sales, and 
it's not worth pursuing. But, we have gone after the larger 
affiliates, as well. We've gone after every player in the 
ecosystem.
    Mr. Peeler. And, Senator McCaskill, could I add that, for 
all frauds, the BBB system, with 100 offices around the 
country, gets about a million complaints and provides a service 
for consumers, where you can go and check and see what types of 
complaints a company is getting. And, as I said in my 
testimony, very often misleading performance of claims are also 
accompanied by bad refund policies and negative-option shipping 
policies. The St. Louis Better Business Bureau had one of these 
companies that was just billing people sort of randomly for the 
products. So, if the consumers will go to the BBB website 
before they buy and check and see what type of complaint 
history this company has, it will help. It won't eliminate the 
problem, but it would help, and help protect them.
    Senator McCaskill. Senator Heller?
    Senator Heller. Thank you.
    Ms. Engle, I want to know a little bit more about your 
recent consent orders it announced as part of the Operation 
Failed Resolution. The FTC is now barring defendants from 
making certain claims unless they have at least two adequate 
and well-controlled human clinical studies. Is that accurate?
    Ms. Engle. Yes. Those cases all required the companies 
under order to have at least two well-controlled studies to 
support weight-loss claims, going forward.
    Senator Heller. It's my understanding that the FTC has also 
tried to apply that elsewhere. And even though there are some 
current guidelines in the agency that states that determining 
whether competent and reliable scientific evidence exists is a 
flexible and a fact-specific inquiry, do you have conflicts? Or 
are you applying this new standard elsewhere? And is there a 
conflict in some of the regulations that you're trying to 
enforce?
    Ms. Engle. I don't see any conflict. The--so, the basic law 
is that companies must have a reasonable basis for the 
advertising claims that they make at the time they make those 
claims. What constitutes a reasonable basis will depend on the 
product and the claim. In the case of products that promise 
health benefits, the Commission has required competent and 
reliable scientific evidence. And then, again, what constitutes 
competent and reliable scientific evidence will vary depending 
upon the claim. So, for example, a claim that a product will 
prevent cancer or treat cancer, for example, will require a 
higher level of evidence than a claim that a product, you know, 
will smooth dry skin.
    So, in the case of weight-loss products, in particular, 
based on the factors we consider, in consultation with experts, 
we've determined that randomized controlled clinical studies 
are needed in order to substantiate a claim that a given 
product will cause weight loss.
    The Commission has required two of these studies in its 
orders. Now, it's not--I'm not saying that if a company came to 
us and had one good study on weight loss, we would say, ``Oh, 
that claim is not substantiated.'' But, once we have determined 
that a company has violated the FTC Act, has made 
unsubstantiated weight-loss claims and they are now under 
order, we have put in a requirement that, going forward, they 
should have two studies. And these kinds of studies for weight 
loss do not need to be particularly long term, they're not 
particularly expensive, relative to the amount of money that 
can be made for these products. And, given the level of fraud 
that we have seen in this area, it's important to have the 
extra assurance of a second study to assure that, you know, 
this is a real result, that this wasn't due to some fluke or 
inadvertent bias or something like that in the study.
    Senator Heller. Let's talk about your dietary supplement 
guidelines. We have not revised that or repudiated some of 
those guidelines, even though there are some parts of those 
guidelines that seem or appear to be inconsistent with the 
FTC's current stance, as we just mentioned, about competent, 
reliable scientific evidence. Do you see it that way?
    Ms. Engle. No, I don't see a conflict, because the dietary 
supplement guidelines are written broadly to cover the full 
range of dietary supplements that may be offered and the full 
range of claims that may be made for them. So, the guidance is 
written more broadly. And then, again, when we're in the 
context of a specific case in a specific investigation of a 
product, we know what claims were made for them, what the 
ingredients are, and then we have a record on which to base 
order requirements for substantiations for claims, going 
forward.
    Senator Heller. Is there any intention of modifying those 
guidelines?
    Ms. Engle. Well, there has been some discussion of just 
looking at them--they--oh, gosh, they're, I think, 13 years old 
now, maybe--to see, you know, what--if they need to be 
freshened up. But, again, I don't think there's a conflict 
between what they say at all and what we're doing in our 
orders.
    Senator Heller. OK. Thank you.
    Thank you.
    Senator McCaskill. Senator Klobuchar.
    Senator Klobuchar. Thank you.
    And, Mr. Haralson, I want to talk to you a little bit about 
the work that you're doing.
    Mr. Haralson. Sure.
    Senator Klobuchar. And I was just looking at my Twitter 
account and found about four of these ads about these things, 
like how many cups of coffee I can drink in one day to lose 2 
pounds--that was pretty good--and various other things on fat 
melting and other things. And I understand that your member 
companies permanently suspend advertiser accounts if the 
severity of the violation of the ad policy is high. What does 
that mean? How many ad accounts have been permanently 
suspended? Are there temporary suspensions? And how do you 
handle this?
    Mr. Haralson. Well, again, I think every company that's 
within TrustInAds.org has different approaches and different 
policies in place to address these. However, again, it depends 
on the severity of the violation or if there are multiple 
violations. But, there are options where companies--the member 
companies may, for example, work with the advertiser to fix the 
ad to make sure that it is in compliance with their ads 
policies. There is an option to remove those ads. And then, the 
third option, obviously, for--certainly, for egregious 
violations, is to suspend the advertiser account.
    But, interestingly enough, some of the sophisticated 
scammers will immediately try to open new accounts and try to 
push their ads again through these filtering systems. So, it 
becomes a little bit of a cat-and-mouse game.
    Senator Klobuchar. And when you say it's easier to target 
vulnerable populations through online advertising than some of 
the more traditional methods or--and do you think more online 
companies are going to be--I think sometimes, with online, they 
think it's a personal message to them. These are often just 
from people----
    Mr. Haralson. Well, I think that these types of scams 
attract the largest constituencies as possible, be it weight 
loss, hair loss, whatever you name it. And again, I think that 
we're seeing these types of ads across the board, both in 
print--or in print media and online.
    Senator Klobuchar. OK. How about the protection of data? I 
mean, more and more, we're using data collection, things like 
Fitbit--I have my--I hope that's not deceptive. I think it's 
pretty good.
    [Laughter.]
    Senator Klobuchar. And, of course, people are getting all 
their data collected now on--through this. And it's been 
actually--I think it's a pretty interesting way to use, sort 
of, self-motivation to get yourself to exercise and other 
things. And are companies protecting consumer data to make sure 
it doesn't fall into the hands of scammers? What's going on in 
that front?
    Mr. Haralson. Well, I--for example, I'm not familiar with 
if Fitbit collects the data that is on the device that's on 
your wrist. I'm--but, as--and I'm a little--can you repeat the 
question, or just clarify the question a little bit?
    Senator Klobuchar. The question is about--more and more, 
the diet data is going online. People are entering things in, 
just like they're entering other things in. And has there been 
an effort by your member companies to look at how you're going 
to protect that data? And maybe someone else can better answer 
that.
    Mr. Haralson. Well, I'd--again, I'm not--to my knowledge, I 
don't believe that our member companies are collecting third-
party data particular to health-related devices or whatever the 
case may be. So--but, I'm happy to----
    Senator Klobuchar. And we--it's a whole 'nother issue of 
some of the popup ads that you get when you start using 
products. So--and in a way, that some of them are collecting 
it, because then you can get popup ads about things related to 
it. But--yes.
    Mr. Peeler. And, Senator Klobuchar, there is a fairly broad 
coalition, called the Digital Advertising Alliance, that is 
looking at the question of collection of data across sites and 
doing some pretty significant binary work. The organization was 
formed, really, at the request of the Federal Trade Commission, 
to look at exactly those issues.
    The specific issue that you're talking about, which is 
special restrictions on sensitive data about health, is one of 
the things that's still under development. That's a fairly 
tricky issue to get everybody in the industry onboard with. 
But, there is an organization that's been formed, working very 
effectively in looking at all those issues.
    Senator Klobuchar. So, I'm thinking about all the new money 
that's being spent on all these products as people are, you 
know, desperately looking at ways to lose weight. And yet, 
since the 1960s, adult obesity has more than doubled, leading 
to healthcare challenges for our country, as we know. We know 
some of these diets are legitimate and well-researched, and 
some of them aren't. But, what really bothers me, at its core, 
is that, while for the first time we saw leveling out for 
kids--not really a big reduction, but a leveling out of the 
increase in obesity this last year --we're hoping some having 
to do with the work of the First Lady and the work of some of 
the school lunch programs, which I don't think we should be 
rolling back those standards, but that's a whole nother--
another topic.
    What do you think we should be doing to really get people 
being able to spend their money on what works and what doesn't? 
We have to admit, here, that we have a major problem when 
people are spending more and more money and they're gaining 
more and more weight.
    Mr. Peeler. And, you know, that is precisely the type of 
thing that advertisers that sell and market products that do 
work worry about. One advertiser comes to mind. He sells 
fitness equipment, and people say, ``We watch the ads, you 
start sweating while you're watching the ads,'' because it's 
very clear that you have to have a dedicated regime, and stick 
with it. This advertiser loses sales to these----
    Senator Klobuchar. Right.
    Mr. Peeler.--fraudulent products, because people say, 
``Well, why would I exercise''----
    Senator Klobuchar. Right.
    Mr. Peeler.--``for 45 minutes if I can just take a pill and 
never diet again?''
    Senator Klobuchar. Right, exactly. So, your answer would be 
to be more intense about going after these fraudulent products. 
And I--that's why I keep going back to, not just the 
advertising, but the FDA and trying to just get some of them 
off the market.
    Mr. Peeler. Yes. And I think that there's a big role that 
the types of self-regulatory programs--that two-thirds of the 
table is talking about--can play to supplement the resources 
that the government has. What we see is a lot of cases, where, 
when we contact the advertiser--and we do it fairly quickly--
they just say, ``Oh, we'll change that claim.'' We have a 
fairly high record of success, and that's that many fewer cases 
that the FDA or the FTC have to deal with.
    Mr. Haralson. Senator, if it would be possible for me to 
add--I mean, one thing, I think, that makes it difficult is the 
fact that a lot of these--it's not illegal to sell these 
products. I think when it becomes illegal is when you're doing 
it under false claims. And so, for our companies that clearly--
some of these claims that are fraudulent violate our ads 
policies. But, again, it makes it difficult to substantiate the 
good advertisers versus the bad advertisers because of the 
sophistication of some of these scammers in the language that 
they're using and in the ways that they're to circumvent our 
systems to be able to----
    Senator Klobuchar. Right.
    Mr. Haralson.--get their ads served online.
    Senator Klobuchar. Understand. Very good.
    Well, I think, to me, it means we need some more standards 
and resources. And we appreciate your efforts trying to monitor 
them.
    Thank you.
    Senator McCaskill. Senator Blumenthal.

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thank you, Madam Chairman.
    Dr. Oz, I want to pursue a question that Senator Klobuchar 
raised. I understand that it's not your policy to support any 
particular brands, and that you feel now, as you said to her in 
response to one of her questions, that perhaps is a mistake. 
So, I'm wondering, would you consider creating a sort of master 
list of brands that would be helpful to consumers? Because, 
after all, you have the immense power of your voice and 
credibility that would be helpful to consumers if you created 
such a master list of brands that you feel do work and are 
helpful.
    Dr. Oz. I would love to do that. And I've been speaking to 
people who I trust in the industry about how to go about it. My 
best estimates--and I'd love for other industry members to 
offer this--is that probably 80 percent of the products which 
are made by 20 percent of the companies are high-quality, 
reputable products by people who really do their homework and 
are audited in many different ways, good manufacturing 
processes and the like. And then 20 percent of the products are 
made by, you know, a lot of the companies--theoretically, 80 
percent--who really aren't that good. They're fly-by-nights. 
The quality issues are a major concern. The post office box 
example Dr. Peeler --Mr. Peeler gave is a good example. When I 
busted these folks in San Diego. I went to their listed 
address. It's a post office box. So, you really could never 
find anybody.
    So, I--I've been actively looking at that. With your 
suggestion of support, I think I'm going to do it. And I think 
it'll do a lot to drain the swamp that we've created around 
this area.
    Senator Blumenthal. Well, I would encourage you to do it. 
Draining a swamp is really very, very important, because, in 
this area, as you know, and I think many of us know--I was 
attorney general of a State for 20 years. I did a lot of work 
in this area. And if there is any area where consumers are most 
susceptible and vulnerable to misleading and false pitches, I 
think it is this one, because their hopes are so high and their 
needs often are so great. So, I think that would be a welcome 
development.
    I introduced a measure called the Dietary Supplement 
Labeling Act, along with Senator Durbin, last August. And this 
bill would require dietary supplement manufacturers to register 
their products with the FDA and disclose the known risks of 
their ingredients on a product's label. And I think that this 
kind of measure is crucial to provide information to consumers 
regarding dietary supplements and help the FDA identify 
potential health concerns. And, as you've suggested, a master 
list of celebrity endorsements might be helpful for the FTC to 
identify violators, and this bill would create a master list of 
dietary supplements, similar to that one, that could cause 
adverse effects, to help consumers understand the risks.
    What are your thoughts on that legislation?
    Dr. Oz. I think it's a very wise place for us to invest 
resources. Some of these dietary supplements, especially the 
ones that are stimulatory supplements, raise great concerns for 
me. They're often adulterated, even though they claim they're, 
you know, not working that way. It--that has been a proven way 
of getting weight loss. You put a amphetamine-type product in a 
drug--in a product, and it'll work with weight loss, but the 
side effects are just too great for us to tolerate as a 
population.
    Senator Blumenthal. That method of weight loss may actually 
be unhealthful.
    Dr. Oz. Oh, it has been proven to be unhelpful, which is 
why the FDA has pulled those products off the market. That's 
also part of the challenge we face. We are in a time in our 
history where we're getting closer to having FDA-approved drugs 
that work in this area. We have a few now, but we've had, you 
know, very, very few for many, many years. And so, as we get 
better prescription products that would be effective, then more 
medicine will turn in that direction.
    But, even the very basic techniques that we know work --
bariatric surgery, which we way underperform in this country, 
is very effective. But, people don't want to go that far even 
though, if you're 100 pounds overweight at age 50, you have the 
same mortality rate as if you have cancer. So, these are 
desperate situations with desperate people who are looking for 
solutions, and that's a recipe for problems.
    So, I strongly support the need to look at whether the 
products are safe, or not. And the other side of the equation 
is trying to find, you know, ways of getting people ideas that 
they can use to jumpstart their way back.
    Senator Blumenthal. Ms. Engle, let me ask you. Would the 
FTC find that kind of list helpful?
    Ms. Engle. Well, the Commission itself has not taken a 
position on that legislation. Speaking for myself, I think it 
could be helpful. I think it could be helpful to FDA, 
certainly, in its law enforcement efforts and providing--it 
would provide consumers with useful information.
    Senator Blumenthal. Thank you.
    Thank you all for being here, and thank you for your great 
work.
    Thank you.
    Senator McCaskill. I just want to briefly follow up. I 
don't know if anyone else has another follow-up. I want to make 
sure--I appreciate, Dr. Oz, that--we've covered a lot of ground 
this morning, and a significant part of it was about some of 
your language you've used in association with some of these 
products on your show. And you indicated that the products I 
talked about in my previous questioning, you had--that those 
shows were a couple of years ago. Well, 3 weeks ago, I quote 
you, ``FBX literally flushes fat from your system.'' ``Every 
time you cheat on your diet, I want you to grab one of these 
tiny, itty-bitty pills. This tiny tablet can push a lot of fat 
out of your belly.''
    People want to believe they can take an itty-bitty pill to 
push fat out of their body. They want to believe that. And it 
seems to me that, instead, if you said, ``Every time you cheat 
on your diet, I want you to take a walk,'' that would eliminate 
the problem that is at the root of this hearing today. That is 
that your credibility is being maligned by fraudsters, and, 
frankly, being threatened by a notion that anybody can take an 
itty-bitty pill to flush fat out of their system.
    In January, you called Forskolin, quote, ``lightning in a 
bottle'' and ``a miracle flower to fight fat.'' That was just 
in January.
    I know you know how much power you have. I know you know 
that. You are very powerful. And with power comes a great deal 
of responsibility. And I know you take it seriously, and I know 
you care about your listening audience and your viewing 
audience. I know you care about America's health. And you are 
being made an example of today because of the power you have in 
this space. And we didn't call this hearing to beat up on you, 
but we did call this hearing to talk about a real crisis in 
consumer protection. And you can either be part of the police, 
here, or you can be part of the problem. And we're just hopeful 
that you will do a better job at being part of the police.
    Dr. Oz. Well, I came here because I want to be part of the 
solution, not part of the problem.
    You mentioned FBX, which is basically a fiber. And we know 
that fiber, when taken correctly, has been a very effective 
tool for weight loss, for the reason that I stated.
    Your comments about the language I use is well heard, and I 
appreciate it. I host a daytime television show, where I feel a 
need to bring passion into people's lives about what they can 
do. And I'm very respectful of the fact that, when it's used--
and it has been used--as a way of defrauding people, that it's 
a harmful process.
    And I appreciate your kind words about the power I have. 
I'm in a situation where I'm second-guessing every word I use 
on the show right now. FBX is used by my family. I do think 
it's important. I do think if you cheat on a meal, it's worth 
including some fiber. That's why we tell people to eat 
vegetables when they go out for a big meal, because it serves 
that very purpose.
    So, I'm--you know, I have things that I think work for 
people. I want them to try them, just to help them feel better 
so they can keep doing the other things that we spend every 
single day on the show talking about. And when I feel, as a 
host of a show, that I can't use words that are flowery that 
are, you know, exultatory, I feel, you know, like I've been 
disenfranchised, like my power's been taken away to get people. 
You don't want to be in a pulpit talking about how passionate 
you are about life and thinking, ``Well, you know, if I use 
that word, it's going to be quoted back to me.'' And yes, the 
100 words around it are all about doing other things right.
    So, I'm very respectful. I've heard the message. I've told 
my colleagues at the FTC: I get it.
    Senator McCaskill. OK, good.
    I want to see all that passion and that floweriness about 
the beauty of a walk at sunset or----
    [Laughter.]
    Dr. Oz. OK.
    Senator McCaskill.--you know, the----
    Dr. Oz. Touchee.
    Senator McCaskill.--how you feel when you get off the bike 
in the morning----
    Dr. Oz. OK.
    Senator McCaskill.--and, I mean, no one's telling you not 
to use passion. But, passion in connection with the word 
``miracle pill'' and ``weight loss'' is a recipe for disaster 
in this environment, in terms of the people who are looking for 
an easy fix and getting sometimes, I think, delusional about 
whether or not an easy fix is going to be there for them. So--
--
    And I appreciate everyone being here. Does anybody else 
have anything else?
    Senator Klobuchar. Well, I was going to say that we all 
experience the feeling, as elected officials, of any word that 
can be taken out of context.
    [Laughter.]
    Senator Klobuchar. We kind of can relate to this.
    [Laughter.]
    Senator McCaskill. We feel----
    Senator Klobuchar. But, at the same time, in addition to 
being a celebrity, you're a doctor, and I just believe that 
doctors have this duty, as we believe we have to represent the 
people we represent--you have the duty to give them the best 
evidence. And when stuff is being taken out of context, like it 
has, or, you have admitted making mistakes in how you described 
a few things, I think you have a duty to correct that record, 
and then be careful, going forward, because you can use your 
knowledge and your celebrity status to do good things. And 
right now, to me, it seems like we're going to the opposite 
way, here. So----
    Dr. Oz. Well, Senator, just--again, I don't want to rehash 
this, but, as a good example, I did a whole show around how 
green coffee bean extract and the way it was described was not 
the right way to do it. I, you know, in fact, brought audience 
members in, did a several-month program to sort of see if it 
worked or not. It has no impact. I--the things I have said 
continue to be used----
    Senator Klobuchar. Right.
    Dr. Oz.--as weapons against the public.
    Senator Klobuchar. Understand. But, I think that continual 
debunking of some of this is helpful, and the emphasis on what 
works best. And you know it better than us, so we appreciate it 
if you'd keep focusing on that.
    Senator McCaskill. Thank you all.
    Senator Blumenthal. I think, Dr. Oz, if you ever need 
anyone to fill on your----
    [Laughter.]
    Dr. Oz. I know who to call.
    Senator Blumenthal. I'm sure you'd have a few takers in 
this body.
    [Laughter.]
    Dr. Oz. Thank you, Senator Blumenthal.
    Senator McCaskill. Thank you all very much.
    [Whereupon, at 11:15 a.m., the hearing was adjourned.]
                            A P P E N D I X

       Written Testimony of the Electronic Retailing Association

 Submitted by: Julie Coons, President and CEO and Bill McClellan, Vice 
    President, Government Affairs, Electronic Retailing Association

Introduction
    Chairman McCaskill, Ranking Member Heller and Members of the 
Committee, the Electronic Retailing Association (``ERA'') thanks you 
for the opportunity to submit this written testimony on how to protect 
consumers from false and deceptive advertising of weight-loss products. 
We strongly applaud your oversight and interest in this important topic 
to ensure that our Nation's consumers are protected from bad actors.
    The Electronic Retailing Association (ERA) is the trade association 
in the United States and abroad that represents leaders of the direct-
to-consumer marketplace, which includes members that utilize electronic 
retailing on television, radio and online to engage with consumers. 
Today, ERA proudly represents more than 400 companies in countries 
around the world including many of the industry's most prominent retail 
merchants. ERA's membership consists of a diverse ecosystem of 
businesses and entrepreneurs operating at the cutting edge of 
innovation who have adapted to the rapidly evolving challenges found in 
the current retail landscape.
    In 2004 the ERA board of directors partnered with the Council of 
Better Business Bureaus, Inc. (CBBB) and the Advertising Self-
Regulatory Council (ASRC) to create the Electronic Retailing Self-
Regulation Program (ERSP). ERSP was created specifically to improve 
consumer confidence and demonstrate to the Federal Trade Commission 
(FTC) and Congress that ERA is committed to helping companies within 
the industry comply with existing regulations. The program strives to 
provide a quick and efficient process to review egregious advertising 
claims and to alert members, and in some cases the FTC, of noncompliant 
companies. We believe that ERSP creates a level playing field for 
direct-to-consumer commerce industry professionals and through the 
years has increased industry credibility and pride.
    The FTC has reviewed our efforts and is generally very favorable of 
ERSP, as they share our frustration that a few bad players taint the 
direct response industry. However, the FTC has made it clear, that ERA 
members should not consider ERSP a ``free pass.'' In other words, 
advertising that meets the standards of the ERSP review process may 
still be subject to challenge by the FTC and others.
    To date ERSP results have been impressive in removing deceptive and 
misleading advertising campaigns from the air as the following program 
statistics indicate.

                                                 ERSP Statistics
                                               Updated May 2, 2014
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Total Direct Response Advertising Tracked                                                                12,600
Home Shopping Reports                                                                                        30
Total Cases Current and Closed                                                                              349
Average Case Length (Calendar Days)                                                                     71 days
Cases from Monitoring                                                                                       187
Cases from Consumer Challenges*                                                                              34
Cases from Competitor Challenges*                                                                           102
Compliance Cases                                                                                             26
Advertising Modified or Discontinued                                                                        318
FTC Nonparticipation Referrals                                                                               27
Compliance Referral to FTC                                                                                    3
----------------------------------------------------------------------------------------------------------------

    While the ERSP program has received praise from all quarters, we 
know there is more work to be done. On April 26, 2006 then FTC 
Chairwoman Deborah Platt Majoras delivered a speech to industry 
participants entitled ``Self-Regulation in the Infomercial Industry: 
Moving Forward''. We believe that Commissioner Majoras' remarks remain 
relevant today. The vast majority of marketers have stepped up to the 
plate and delivered meaningful and voluntary self-regulation. The small 
fraction of marketers who refuse to participate in ERSP proceedings or 
comply with ERSP decisions are referred to the FTC for enforcement 
action. We continue our efforts to urge more cable companies and other 
media outlets to support these efforts by closely monitoring ERSP 
decisions and utilizing past case history to make current clearance 
decisions. Some have chosen to do so while others have not. We look 
forward to working with the Committee on strategies to remove deceptive 
and misleading weight-loss claims from the marketplace as embodied in 
the FTC's ``Gut Check'' guidance. However, it is important to ensure 
that any action taken does not have an unintended chilling effect that 
punishes those who are doing the right thing. Companies who are 
offering legitimate products that are designed to combat the growing 
national obesity epidemic marketed with lawful messages should not be 
penalized for fear that their advertising copy will not be cleared. ERA 
and its members stand ready to assist both the FTC and the Committee as 
we continue our collective work to ensure a healthy and vibrant 
marketplace for all.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Dean Heller to 
                           Mary Koelbel Engle
    Question 1. In your testimony before the Committee, you state that 
``in the case of weight loss claims, in particular, based on the 
factors we consider and in consultation with experts, we have 
determined that randomized controlled clinical studies are needed in 
order to substantiate a claim that a given product will cause weight 
loss.'' This statement appears to be inconsistent with existing 
Commission guidance that states, with respect to health claims, 
``[t]here is no fixed formula for the number or type of studies 
required.'' What is the Federal Trade Commission's position on what 
constitutes ``competent and reliable scientific evidence'' needed to 
substantiate weight loss claims?
    Answer. The Commission's dietary supplement guidance referred to in 
the question is a guidance document laying out overarching advertising 
interpretation and substantiation principles with respect to health-
related claims generally. The guidance provided is necessarily more 
general than the analysis the Commission conducts when it has before it 
particular claims for particular products. In law enforcement 
investigations, the Commission uses six factors (the ``Pfizer 
factors'') to determine what constitutes appropriate substantiation for 
particular advertising claims in the case before it. These factors 
include: (1) the type of product advertised; (2) the type of claim; (3) 
the benefits of a truthful claim; (4) the cost of developing 
substantiation for the claim; (5) the consequences of a false claim; 
and (6) the amount of substantiation that experts in the field would 
require.\1\ Using this standard, rigorous evidence is required to 
substantiate weight-loss claims. First, the Commission requires a high 
level of substantiation--competent and reliable scientific evidence--
for products involving health or safety, and products promoted for 
weight loss clearly involve health benefits. Second, for various 
reasons, including the placebo effect, it is difficult for consumers to 
evaluate the truth or falsity of weight loss claims. In addition, 
weight-loss claims often refer to facts and figures (e.g lose X pounds 
in Y weeks), also the kind of claim for which the Commission requires 
tests or studies sufficient to support the specific figures. With 
regard to the third and fourth elements, which are usually considered 
together, the benefits of a truthful claim would be substantial, and 
the market for an effective product would be enormous. Moreover, the 
cost of conducting studies is reasonable when compared to the potential 
economic benefit and therefore should not deter the development of new 
products. For example, a twelve-week clinical weight-loss study can be 
conducted for approximately $300,000, while a weight-loss product 
advertising campaign can generate tens or even hundreds of millions of 
dollars in revenue. Fifth, the economic harm from fraudulent weight 
loss products is substantial. For example, the sales of Sensa from 2008 
through 2012 totaled over $364 million. Sixth, the kind of study 
experts would require may vary with the type of weight-loss product or 
service at issue. For example, a different type of study may be 
appropriate for a weight-loss clinic that has access to patient files 
than to a dietary supplement or an exercise device. For dietary 
supplements, experts would generally require randomized, well-
controlled clinical studies.\2\
---------------------------------------------------------------------------
    \1\ See Pfizer, 81 F.T.C. 23, 64 (1972); Thompson Medical Co., 104 
F.T.C. 648, 821 (1984).
    \2\ See FTC v. Nat'l Urological Group, 645 F. Supp. 2d 1167, 1202 
(N.D. Ga. 2008); FTC v. Slim America, 77 F. Supp. 2d 1263, 1273 (S.D. 
Fla. 1999): Schering Corp., 118 F.T.C. 1030, 1116 (1994) (ALJ, Initial 
Decision).

    Question 2. In your testimony, you state that the adequate and 
well-controlled human studies the FTC requires to substantiate weight-
loss claims are ``not particularly expensive relative to the amount of 
money that can be made for these products.'' Please provide the basis 
for this assertion.
    Answer. Experts the FTC staff has consulted have indicated that a 
well-controlled clinical trial of reasonable size and duration (for 
example, 100 subjects over twelve weeks) can be conducted for 
approximately $300,000. Even if the cost were higher, it would still be 
only a small fraction of the amount that weight loss marketers spend on 
their advertising campaigns and an even smaller fraction of the revenue 
generated by a successful weight-loss advertising campaign.

    Question 3. Some observers have stated that the FTC's requirement 
of two well-controlled human studies will create a very high barrier to 
entry that will preclude small businesses from entering the marketplace 
and stifle innovation on products Americans want. Has the Commission's 
Bureau of Economics been consulted for its view on potential 
competitive effects of such a requirement?
    Answer. As noted in the answer to question 1 above, the FTC does 
not have an across-the-board requirement of two well-controlled human 
studies to substantiate health-related claims. Rather, the level of 
substantiation depends on an analysis of the Pfizer factors.\3\ As for 
weight-loss order requiring two controlled trials, please see the 
answer to question 5 below.
---------------------------------------------------------------------------
    \3\ In the context of a remedial order, the Commission may also 
fashion fencing-in relief considering such factors as the 
deliberateness of the violation, the violator's past history with 
respect to advertising practices, and the transferability of the 
challenged practices to other claims or products. Removatron Int'l 
Corp. v. FTC, 884 F.2d 1489, 1498-99 (1st Cir. 1989); Sterling Drug v. 
FTC, 741 F.2d 1146, 1155 (9th Cir. 1984).
---------------------------------------------------------------------------
    The concern that imposing a rigorous standard of substantiation 
will result in fewer entrants to the marketplace or stifle innovation 
is unwarranted for several reasons. First, strong order provisions 
requiring solid scientific evidence safeguards consumers from companies 
that have engaged in deceptive advertising in the past by ensuring that 
future claims by these specific companies are truthful.
    Second, the problem with the current marketplace, particularly for 
weight loss products, is not that there are too few entrants, but that 
too many companies are flooding the marketplace with exaggerated claims 
based on preliminary or weak evidence or even hearsay about the latest 
fad ingredient. This view is shared by many in the industry and was 
expressed by industry representatives at the hearing.\4\ Responsible 
supplement marketers and their trade associations have repeatedly 
sought tougher enforcement by both FDA and the FTC to crack down on 
unfounded claims and have even funded programs with the Council of 
Better Business Bureaus to increase self-regulation.\5\ As CRN's 
President stated at the hearing, ``Responsible firms, like CRN's 
members, suffer along with consumers as legal, reasonable, and 
defensible advertising for weight management claims gets dwarfed by 
outlandish claims that violate the law and deceive consumers.'' \6\
---------------------------------------------------------------------------
    \4\ See, e.g., Written Testimony of Steve Mister, President and CEO 
of the Council for Responsible Nutrition (June 17, 2014) at 4-5 
(supporting the FTC's numerous enforcement actions against deceptive 
weight loss advertising, while comparing enforcement to the carnival 
game ``whack-a-mole,'' with two more examples of deceptive advertising 
popping up for every case the FTC targets).
    \5\ Id. at 5-6.
    \6\ Id. at 5.
---------------------------------------------------------------------------
    The harm is not just economic, as discussed in the response to 
question 1 above, but also health-related. Unsubstantiated promises of 
dramatic and easy weight loss lure consumers away from proven, but more 
difficult, methods for managing weight. Given the option of taking a 
pill or cutting calories and exercising daily, many consumers will opt 
for the pill. With the number of deaths related to poor diet and 
inactivity increasing and estimated to overtake tobacco soon as the 
leading cause of death,\7\ the harm caused by false claims for 
ineffective diet pills is real and substantial.
---------------------------------------------------------------------------
    \7\ See Report on the Dietary Guidelines Advisory Committee on the 
Dietary Guidelines for Americans, 2010 (June 15, 2010), B1-1, available 
at http://www.DietaryGuidelines.gov.
---------------------------------------------------------------------------
    The Commission's Bureau of Economics participates in investigations 
and has an opportunity to provide a formal opinion to the Commission 
that includes its assessment of the merits of the case and the 
appropriateness of the remedies. A central part of our economists' 
analysis is the impact of the order on the marketplace. If the Bureau 
of Economics believes that there is a potential of competitive harm 
from requiring two-well controlled human clinical studies in a 
particular case, it will advise the Commission of its view.

    Question 4. The FTC's current guidance, Dietary Supplements: An 
Advertising Guide for Industry, states that animal and in vitro studies 
are appropriate ``particularly where they are widely considered to be 
acceptable substitutes for human research or where human research is 
infeasible.'' Yet in its recent consent decrees, the Commission has 
imposed language requiring human clinical studies.
    Answer. The Dietary Supplement Advertising Guide makes clear in the 
same paragraph that, ``[a]s a general rule, well-controlled human 
clinical studies are the most reliable form of evidence.'' The 
Commission's recent orders requiring human clinical studies are each 
based on a careful analysis of the Pfizer factors referenced above, 
including the type of product, the specific claims being challenged as 
false or unsubstantiated, and the amount and type of evidence that 
experts in the relevant field believe is reasonable. In every instance 
where the Commission's order has required human clinical studies, there 
has been no basis to conclude that animal or in vitro studies are 
acceptable substitutes for human research.

    Question 4a. With respect to health-benefit claims, including 
weight-loss claims, how does the Commission determine whether human 
research is infeasible?
    Answer. Commission staff makes that determination through an 
analysis of the Pfizer factors and in consultation with experts in the 
relevant field of research. This consultation includes a review of the 
existing body of scientific literature related to the challenged 
claims.

    Question 4b. How does the Commission determine whether animal, in 
vitro, or other studies are acceptable substitutes for human research?
    Answer. Again, the Commission staff makes that determination 
through an analysis of the Pfizer factors and in consultation with 
experts in the relevant field of research.

    Question 4c. Are human clinical trials practical for all health-
benefit claims, including weight loss claims?
    Answer. Human clinical studies are feasible and are the widely-
accepted level of evidence necessary for demonstrating the efficacy of 
weight loss products. Likewise, for most other health benefit claims 
challenged in Commission cases, human research is feasible and the 
accepted level of evidence. The guides set out examples of limited 
situations where human clinical trials may not be feasible. For 
example, a clinical study may not be possible to establish the 
relationship between a nutrient and the reduced risk of developing a 
health condition that takes years to manifest itself. In such a case, 
where a clinical intervention trial would be difficult and 
prohibitively costly, the Commission has indicated that it will 
consider epidemiologic evidence as an acceptable substitute for 
clinical data. Example 14 of the Dietary Supplements Advertising Guide 
illustrates this situation.

    Question 5. Once the FTC Act enters into a consent decree with a 
company regarding unsubstantiated weight-loss claims, the FTC has 
required that the company possess at least two adequate and well-
controlled human clinical studies to substantiate future weight-loss 
claims. In other words, the FTC is imposing a requirement of a higher 
degree of certainty, even though the claims may be otherwise truthful 
and substantiated.
    Answer. The Commission has wide discretion in determining the scope 
of an order necessary to remedy the illegal practices it has found, and 
it is well-established that the Commission may impose ``fencing-in 
relief'' to help ensure future compliance with the law. See, e.g., FTC 
v. Ruberoid Co., 343 U.S. 470, 473 (1952); FTC v. Colgate-Palmolive 
Co., 380 U.S. 374, 392 (1965); Removatron Int'l Corp. v. FTC, 884 F.2d 
1489, 1498-99 (1st Cir. 1989); Stouffer Foods Corp. 118 F.T.C. 746, 811 
(1994). In determining the scope of fencing-in relief, the Commission 
considers such factors as the seriousness and deliberateness of the 
violation; the ease with which the violative claim may be transferred 
to other products; and whether the advertiser has a history of prior 
violations. See, e.g., Removatron, 884 F.2d at 1498-99 (upholding well-
controlled clinical testing requirement as reasonable fencing-in); 
Stouffer Foods Corp. 118 F.T.C. at 811.

    Question 5a. Why are results from one study insufficient, even if 
they are fully controlled and independent?
    Answer. Recent Commission orders have required that weight loss 
claims be supported by at least two adequate and well-controlled 
clinical studies. This requirement is applicable only to the company 
under order and only to the specific claims covered by that order 
provision. It does not necessarily apply to firms not under order. The 
Commission imposes the two-study requirement based on a case-specific 
factual determination of the nature of the violation.
    The need for a second study conforms to well-recognized scientific 
principles favoring replication of study results to establish a causal 
relationship between exposure to a substance and a health outcome.\8\ 
Replication is important to reduce the potential for systematic bias, 
either intended or unintended. Any clinical trial, even when conducted 
by parties independent of the product manufacturer, may be subject to 
unanticipated, undetected, systematic biases that operate despite the 
best intentions of sponsors and investigators, leading to flawed 
conclusions. Replication of results also reduces the likelihood that 
the findings are attributable to chance or random error and provides 
additional confidence in the validity of the findings.
---------------------------------------------------------------------------
    \8\ See, e.g., Thompson Med. Co., 104 F.T.C. 648, 720-21, 825 
(1984), aff'd, 791 F.2d 189 (D.C. Cir. 1986); (order requiring well-
controlled clinical testing upheld as reasonable fencing-in).

    Question 5b. When the FTC applies this heightened substantiation 
requirement in a consent order, is it permissible for the Commission to 
prohibit (or ``fence in'') conduct beyond the scope of the alleged 
violation?
    Answer. The Commission has the discretion to issue orders 
containing ``fencing-in'' provisions that are ``broader than the 
conduct that is declared unlawful.'' \9\ The two-study requirement 
typically applies to the specific weight loss or health claims 
challenged in the complaint and other closely-related claims. Broader 
fencing-in provisions governing substantiation of other health 
benefits, performance, and efficacy claims typically apply the more 
general standard of ``competent and reliable scientific evidence.''
---------------------------------------------------------------------------
    \9\ Telebrands Corp. v. FTC, 457 F.3d, 354, 357 n.5 (4th Cir. 
2006).

    Question 5c. How does the FTC determine the scope of products and 
claims to which the ``two adequate and well-controlled human clinical 
study'' requirement should apply?
    Answer. The Commission carefully considers the nature of the 
particular claims alleged to be deceptive in the Commission's complaint 
and tailors the order, including the remedy or relief, such as a two-
study requirement, to ensure that the order is reasonably related to 
the conduct giving rise to the violation and that it is consistent with 
specific facts of the case and the level of evidence that experts in 
the field would consider reasonable and appropriate for the particular 
claims and products covered by the order.

    Question 6. Your statement to the Committee that multiple studies 
are needed ``given the level of fraud that we have seen in this area,'' 
appears to justify the Commission's application of heightened 
substantiation requirements on grounds that weight-loss-related fraud 
is particularly high; however, health care claims (which include, inter 
alia, weight-loss scams) rank relatively low among the types of 
complaints received by the FTC, falling outside the top-ten consumer 
complaints and comprise about two percent of total complaints received, 
according to the most-recent Consumer Sentinel Network Data Book. 
Because weight-loss claims are reported as a subset of the complaint 
category, it would appear weight-loss claims on their own rank even 
lower. Is it the practice of the Commission to impose heightened 
requirements in accordance with the level of fraud in a particular 
area?
    Answer. My statement about the ``level of fraud that we have seen 
in this area'' as a factor in determining the appropriate level of 
substantiation was a reference to my written testimony about the 
instances of outright fraud that the FTC staff has uncovered in the 
course of our investigations of weight loss marketing by companies now 
under order.\10\ I indicated that the Commission has found troubling 
practices in more than one weight loss case where the company's 
proprietary studies contained erroneous or fabricated data. In the 
Sensa case, for example, we discovered that the trials included 
duplicate subjects and that researchers sent weight loss results to the 
defendants before the test subjects had been weighed. In the Skechers 
case, subjects who gained weight were reported as having lost weight. 
That type of fraudulent conduct clearly underscores the need for 
replication or verification of study results in the orders the FTC 
seeks against those companies.\11\
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    \10\ See Hearing Transcript at 73.
    \11\ See Prepared Statement of the Federal Trade Commission (June 
17, 2014) at 6-7.
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    With respect to the overall prevalence of weight loss fraud in the 
U.S. marketplace, the Consumer Sentinel data reflects the types of 
complaints that consumers are most likely to report to law enforcement 
authorities. That data does not necessarily provide a representative 
picture of the prevalence of all forms of consumer fraud. A more 
accurate and comprehensive picture comes from the FTC's 2011 survey, in 
which Bureau of Economics staff commissioned a large, nationally 
representative survey of U.S. consumers on 17 specific categories of 
fraud. As I noted in my written testimony, that survey revealed that 
more consumers were victims of fraudulent weight-loss products than of 
any of the other 16 fraud categories surveyed. In fact, the estimated 
number of consumers who were victims of weight loss fraud--5.1 
million--was more than double the number of victims in any other 
category.\12\
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    \12\ FTC Staff Report, Consumer Fraud in the United States, 2011: 
The Third FTC Survey (2013), at 17, available at http://www.ftc.gov/
sites/default/files/documents/reports/consumer-fraud-united-states-
2011-third-ftc-sruvey/13041fraudseurvey_0.pdf

    Question 7. The FTC's recent enforcement actions, both with respect 
to weight-loss claims and other health claims, are being closely 
watched by marketers and advertisers. The Commission now includes as 
standard language in its consent decrees the requirement that 
``competent and reliable scientific evidence'' consist of ``at least 
two adequate and well-controlled human clinical studies. . .conducted 
by different researchers, independently of each other, that conform to 
acceptable designs and protocols and whose results, when considered in 
light of the entire body of relevant and reliable scientific evidence, 
are sufficient to substantiate that the representation is true.'' How 
are other companies looking at these consent orders supposed to 
interpret what level of substantiation is now required of them?
    Answer. The FTC's use of the two well-controlled study requirement 
as a remedial matter governing specific types of claims in specific 
orders does not represent a change in the FTC's substantiation policy 
and does not necessarily apply to other advertisers. The Commission has 
made that point clear in the analyses to aid public comment 
accompanying its administrative consents.\13\ Those analyses are 
published in the Federal Register with links provided in news releases 
on the FTC website. Moreover, those closely watching FTC's recent 
enforcement actions will be aware that the agency's orders concerning 
different types of health claims have variously required two well-
controlled studies, one well-controlled study, or more generally, 
``competent and reliable scientific evidence,'' depending on the 
particular claims and products at issue.
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    \13\ See, e.g., GeneLink, Inc.; foru Int'l Corp.; Analysis of 
Proposed Consent Orders to Aid Public Comment, 79 Fed. Reg. 2662, 2664 
(Jan. 15, 2014). The analysis specifically states that the 
substantiation standard set out in Part I of the order, covering 
disease claims and requiring two well-controlled human clinical 
studies, ``does not necessarily apply to firms not under order.'' In 
fact, that two-study standard does not even apply to all health-related 
claims made by GeneLink. Part II of the order in that matter sets out a 
standard of ``competent and reliable scientific evidence'' for non-
disease health benefit, performance, and efficacy claims.
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    In addition, the relevance of specific remedial order provisions to 
other companies has been the topic of public statements issued by the 
Commissioners. In the recent GeneLink case, for example, Chairwoman 
Ramirez and Commissioner Brill, responding to concerns expressed by 
Commissioner Ohlhausen that advertisers might misinterpret the order's 
substantiation provisions, clearly stated that ``[t]here is nothing in 
our action today that amounts to the imposition of a ``de facto two-RCT 
standard on health-and disease-related claims.'' The statement goes on 
to clarify that the proper level of substantiation is a case-specific 
factual determination.\14\
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    \14\ Statement of Chairwoman Edith Ramirez and Commissioner Julie 
Brill: In the Matter of GeneLink, Inc. and foru Int'l Corp. (Jan. 7, 
2014) at 2, available at http://www.ftc.gov/public-statements/2014/01/
statement-chairwoman-edith-ramirez-commissioner-julie-brill.

    Question 7a. Is it reasonable for a company, not yet subject to a 
consent order, to assume that weight loss or other health claim 
substantiation that does not include two independent studies will be 
viewed by the Commission as inadequate?
    Answer. Companies looking at the FTC case law and guidance 
documents, including the Dietary Supplements Advertising Guide, should 
understand that the Commission's substantiation standard for health-
related claims of any kind is intended to be both a rigorous and a 
flexible standard governed by the specifics of each case. As noted in 
earlier responses, the Commission evaluates each individual case on its 
merits, conducting an analysis of Pfizer factors, consulting with 
experts in the relevant field, and examining the studies upon which a 
company relies in the context of all of the relevant surrounding 
literature. In certain situations one high-quality study will suffice 
to support a claim, in other situations a body of epidemiologic 
evidence will suffice, and in other situations two or even more studies 
may be necessary, especially where there are studies with conflicting 
results. The Dietary Supplement Advertising Guide provides detailed 
explanations and illustrative examples of the many factors that govern 
the level of evidence needed to substantiate health-related claims.

    Question 7b. How will the Commission ensure that its application of 
this standard does not have a chilling effect on other firms with 
regard to otherwise truthful and substantiated claims?
    Answer. The Commission ensures that firms understand its flexible 
but rigorous approach to substantiation of weight loss and other 
health-related claims by issuing guidance to industry in various forms, 
providing analysis of its specific orders, and engaging in other 
industry outreach, such as presentations on advertising substantiation 
at industry meetings. In addition, while the FTC cannot formally 
evaluate and pre-approve advertising claims, the agency's staff are 
available to respond to questions and provide general informal advice 
about the appropriate level of substantiation for claims.

                                  
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