[Federal Register Volume 59, Number 43 (Friday, March 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4964]


[[Page Unknown]]

[Federal Register: March 4, 1994]


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FEDERAL TRADE COMMISSION

[File No. 922-3290]

 

American Institute of Habit Control, Inc., et al.; Proposed 
Consent Agreement With Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, a Miami, Florida based company from 
making any representation about the relative or absolute performance or 
efficacy of any smoking cessation or weight loss program, unless they 
possess and rely upon competent and reliable scientific evidence to 
substantiate the representation.

DATES: Comments must be received on or before May 3, 1994.

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

FOR FURTHER INFORMATION CONTACT:
Matthew Daynard, FTC/H-200, Washington, DC 20580. (202) 326-3291.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given 
that the following consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of sixty (60) days. Public comment is invited. Such comments or 
views will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

    In the matter of American Institute of Habit Control, Inc., a 
corporation, and Steven Present, individually and as an officer of 
said corporation.
File No. 922 3290.

Agreement Containing Consent Order to Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of American Institute of Habit Control, 
Inc., a corporation, and Steven Present, individually and as an officer 
of said corporation (``proposed respondents'' or ``respondents''), and 
it now appearing that proposed respondents are willing to enter into an 
agreement containing an order to cease and desist from the use of the 
acts and practices being investigated.
    It is hereby agreed by and between American Institute of Habit 
Control, Inc., by its duly authorized officer, and Steven Present, 
individually and as an officer of said corporation, and their attorney, 
and counsel for the Federal Trade Commission that:
    1. Proposed respondent American Institute of Habit Control, Inc., 
is a Florida corporation, with its principal office or place of 
business at 9655 South Dixie Highway, Miami, Florida 33156.
    2. Proposed respondent Steven Present is the sole officer, director 
and shareholder of said corporation. He formulates, directs and 
controls the acts and practices of said corporation and his address is 
the same as that of said corporation.
    3. Proposed respondents admit all the jurisdictional facts set 
forth in the attached draft complaint.
    4. Proposed respondents waive:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law; and
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    (d) Any claim under the Equal Access to Justice Act, 5 U.S.C. 504.
    5. This agreement shall not become part of the public record of the 
proceeding unless and until it is accepted by the Commission. If this 
agreement is accepted by the Commission, it, together with the attached 
draft complaint, will be placed on the public record for a period of 
sixty (60) days and information in respect thereto publicly released. 
The Commission thereafter may either withdraw its acceptance of this 
agreement and so notify the proposed respondents, in which event it 
will take such action as it may consider appropriate, or issue and 
serve its complaint (in such form as the circumstances may require) and 
decision, in disposition of the proceeding.
    6. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondents of facts, other than 
jurisdictional facts, or of violations of law as alleged in the draft 
of complaint here attached.
    7. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Sec. 2.24 of the Commission's 
Rules, the Commission may, without further notice to proposed 
respondents: (a) Issue its complaint corresponding in form and 
substance with the attached draft complaint and its decision containing 
the following order to cease and desist in disposition of the 
proceeding; and (b) make information public in respect thereto. When so 
entered, the order to cease and desist shall have the same force and 
effect and may be altered, modified or set aside in the same manner and 
within the same time provided by statute for other orders. The order 
shall become final upon service. Delivery by the U.S. Postal Service of 
the complaint and decision containing the agreed-to order to proposed 
respondents' address as stated in this agreement shall constitute 
service. Proposed respondents waive any right they may have to any 
other manner of service. The complaint may be used in construing the 
terms of the order, and no agreement, understanding, representation, or 
interpretation not contained in the order or the agreement may be used 
to vary or contradict the terms of the order.
    8. Proposed respondents have read the attached draft complaint and 
the following order. Proposed respondents understand that once the 
order has been issued, they will be required to file one or more 
compliance reports showing that they have fully complied with the 
order. Proposed respondents further understand that they may be liable 
for civil penalties in the amount provided by law for each violation of 
the order after it becomes final.

Order

Definition

    For the purposes of this Order, ``competent and reliable scientific 
evidence'' shall men those tests, analyses, research, studies, or other 
evidence based on the expertise of professionals in the relevant area, 
that has been conducted and evaluated in an objective manner by persons 
qualified to do so, using procedures generally accepted in the 
profession to yield accurate and reliable results.

I

    It is ordered that respondents American Institute of Habit Control, 
Inc., a corporation, its successors and assigns, and its officers, and 
Steven Present, individually and as an officer and director of said 
corporation, and respondents' agents, representatives and employees, 
directly or through any corporation, subsidiary, division, or other 
device, in connection with the advertising, promotion, offering for 
sale, or sale of any smoking cessation program or weight loss program, 
including any such program that uses hypnosis, in or affecting 
commerce, as ``commerce'' is defined in the Federal Trade Commission 
Act, do forthwith cease and desist from:
    A. Representing, directly or by implication, that the U.S. Surgeon 
General, in the 1989 U.S. Surgeon General's Report on Smoking, Reducing 
the Health Consequences of Smoking: 25 Years of Progress, states that 
the group hypnosis method used by respondents is one of the most 
effective ways to stop smoking.
    B. Representing, directly or by implication, that ninety-seven 
percent of the participants who attend respondents' stop smoking 
seminars permanently abstain from smoking after those seminars, unless 
such is the case.
    C. Making any representation, directly or any implication, about 
the relative or absolute performance or efficacy of any smoking 
cessation program or weight loss program, unless, at the time of making 
any such representation, respondents possess and rely upon competent 
and reliable scientific evidence substantiating the representation.
    D. Misrepresenting, directly or by implication, the existence, 
contents, validity, results, conclusions, or interpretations of any 
test, study, survey or report.
    E. Misrepresenting, directly or by implication, the performance or 
efficacy of any smoking cessation program or weight loss program.

II

    It is further ordered that for three (3) years after the last date 
of dissemination of any representation covered by this Order, 
respondents, or their successors and assigns, shall maintain and upon 
request make available to the Federal Trade Commission for inspection 
and copying:
    A. All materials that were relied upon in disseminating such 
representation; and
    B. All tests, reports, studies, surveys, demonstrations or other 
evidence in their possession or control that contradict, qualify, or 
call into question such representation, or the basis relied upon for 
such representation, including complaints from consumers.

III

    It is further ordered that respondents shall notify the Commission 
at least thirty (30) days prior to the effective date of any proposed 
change in the corporate respondent such as dissolution, assignment, or 
sale resulting in the emergence of a successor corporation(s), the 
creation or dissolution of subsidiaries, or any other change in the 
corporation that may affect compliance obligations arising out of this 
Order.

IV

    It is further ordered that the individual respondent named herein 
shall promptly notify the Commission of the discontinuance of his 
present business or of his affiliation with the corporate respondent. 
In addition, for a period of three (3) years from the date of service 
of this Order, the respondent shall promptly notify the Commission of 
each affiliation with a new business or employment that involves a 
smoking cessation program or a weight loss program. Each such notice 
shall include the respondent's new business address and a statement of 
the nature of the business or employment in which the respondent is 
newly engaged as well as a description of the respondent's duties and 
responsibilities in connection with the business or employment. The 
expiration of the notice provision of this paragraph shall not affect 
any other obligation arising under this Order.

V

    It is further ordered that respondents shall distribute a copy of 
this Order to each of its officers, agents, representatives, 
independent contractors and employees who are involved in the 
preparation and placement of advertisements or promotional materials; 
and, for a period of three (3) years from the date of entry of this 
Order, distribute same to all future such officers, agents, 
representatives, independent contractors and employees.

VI

    It is further ordered that respondents shall, within sixty (60) 
days after the date of services of this Order, file with the Commission 
a report, in writing, setting forth in detail the manner and form in 
which they have complied with this Order.

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from American Institute of Habit Control, Inc. 
(hereinafter ``AIHC'') and its President, Steven Present, marketers of 
the Present Seminar, a single, two-and-a-half-hour, group hypnosis 
session program for smoking cessation and weight loss. The Present 
Seminar is offered to the public nationwide by Steven Present at hotel 
locales.
    The proposed consent order has been placed on the public record for 
sixty (60) days for the reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After (60) days, the Commission will again review the agreement 
and will decide whether it should withdraw from the agreement or make 
final the agreement's proposed order.
    The Commission's complaint charges that the proposed respondents 
deceptively advertised: (1) The likelihood of success in achieving the 
and maintaining abstinence from smoking cigarettes and weight loss; and 
(2) the effectiveness of proposed respondents' smoking cessation 
methods in leading consumers to abstain from smoking, including the 
effectiveness of proposed respondents' programs compared to other 
smoking cessation programs.

Success

    The complaint against AIHC and Steven Present alleges that the 
proposed respondents made false claims and failed to possess a 
reasonable basis for other claims they made regarding the success of 
their seminar participants in quitting smoking and achieving and 
maintaining weight loss.Through advertisements placed in various media 
in advance of their seminars, proposed respondents represented that 97 
percent of their seminar participants permanently abstain from smoking 
after attending those seminars. The complaint alleges that this claim 
is false.
    Proposed respondents further represented through their 
advertisements that seminar participants: (1) Are cured of smoking 
addiction and permanently abstain from smoking cigarettes; (2) are 
cured of smoking addiction without experiencing withdrawal, stress or 
weight gain; and (3) achieve and maintain weight loss.
    The Commission believes that these success claims for seminar 
attendees' smoking cessation, weight loss and maintenance of achieved 
weight loss are deceptive because proposed respondents at the time they 
made the claims did not possess adequate substantiation for those 
claims.
    The proposed consent order seeks to address the alleged success 
misrepresentations cited in the accompanying complaint in three ways. 
First, the order (Part I.C.) requires proposed respondents to possess a 
reasonable basis consisting of competent and reliable scientific 
evidence substantiating any claim about the performance or efficacy of 
any smoking cessation or weight loss program.
    Second, the proposed order (Part I.B.) prohibits proposed 
respondents from representing that 97 percent of their seminar 
attendees permanently abstain from smoking after those seminars, unless 
that is the case.
    Finally, the proposed order (Part I.E.) generally prohibits 
proposed respondents from misrepresenting the performance or efficacy 
of any smoking cessation or weight loss program.

Efficacy

    The Commission's complaint further alleges that proposed 
respondents made false claims and failed to possess a reasonable basis 
for other claims they made regarding relative ability of their hypnosis 
program to lead consumers to quit smoking. AIHC and Steven Present 
represented through their advertising that the U.S. Surgeon General, in 
the 1989 U.S. Surgeon General's Report on Smoking, Reducing the Health 
Consequences of Smoking; 25 Years of Progress, states that the group 
hypnosis method used by respondents is one of the most effective ways 
to stop smoking. The complaint alleges that this claim is false, 
because the cited Report does not state that proposed respondents' 
hypnosis method is one of the most effective ways to stop smoking.
    Proposed respondents further represented through their 
advertisements that their single-session, group hypnosis seminar is 
more efficacious for smoking cessation than other smoking cessation 
methods. The Commission believes that this comparative efficacy claim 
for proposed respondents' hypnosis program is deceptive because 
proposed respondents at the time they made the claim did not possess 
adequate substantiation for the claim.
    To address these efficacy misrepresentations, the proposed order 
(Part I.A.) prohibits AIHC and Steven Present from representing that 
the U.S. Surgeon General, in the 1989 U.S. Surgeon General's Report on 
Smoking, Reducing the Health Consequences of Smoking: 25 Years of 
Progress, states that the group hypnosis method used by respondents is 
one of the most effective ways to stop smoking. The proposed order 
(Part I.D.) further generally prohibits proposed respondents from 
misrepresenting the existence, contents, validity, results, 
conclusions, or interpretations of any test, study, survey, or report. 
Finally, the order (Part I.C.) requires proposed respondents to possess 
and rely upon competent and reliable scientific evidence substantiating 
any representation about the relative or absolute performance or 
efficacy of any smoking cessation or weight loss program, before they 
make such a claim.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order, or to modify in any 
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 94-4964 Filed 3-3-94; 8:45 am]
BILLING CODE 6750-01-M