[Federal Register Volume 59, Number 105 (Thursday, June 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13286]


[[Page Unknown]]

[Federal Register: June 2, 1994]


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FEDERAL TRADE COMMISSION

[File Nos. 912 3248; 912 3295; 922 3001; 922 3002]

 

Beverly Hills Weight Loss Clinics International, Inc.; Doctors 
Medical Weight Loss Centers, Inc., et al.; Quick Weight Loss Centers, 
Inc., et al. (Texas); Quick Weight Loss Centers, Inc., et al. 
(Georgia); Proposed Consent Agreements With Analysis To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreements.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, the four 
consent agreements, accepted subject to final Commission approval, 
would prohibit, among other things, four commercial diet program 
companies and their officers from misrepresenting the performance or 
safety of any diet program they offer in the future, and would require 
the respondents to possess competent and reliable scientific evidence 
to substantiate any future claims they make about weight loss, weight 
loss maintenance, or rate of weight loss; to make a number of 
disclosures regarding maintenance success claims; and to disclose all 
mandatory fees.

.DATES: Comments must be received on or before August 1, 1994.

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

FOR FURTHER INFORMATION CONTACT:Richard Kelly or Eric Bash, FTC/H-200, 
Washington, DC 20580. (202) 326-3304 or 326-2892 or Gary Cooper, FTC/
Boston Regional Office, 101 Merrimac St., suite 810, Boston, MA. 02114-
4719. (617) 424-5960.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and section 2.34 of 
the Commission's rules of Practice (16 CFR 2.34), notice is hereby 
given that the following consent agreements containing consent orders 
to cease and desist, having been filed with and accepted, subject to 
final approval, by the Commission, have 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 section 4.9(b)(6)(ii) of the Commission's Rules of 
Practice (16 CFR 4.9(B)(6)(ii)).

    In the Matter of Beverly Hills Weight Loss Clinics 
International, Inc., a corporation. File No. 912-3248.

Agreement Containing Consent Order To Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Beverly Hills Weight Loss Clinics 
International, Inc., a corporation (``proposed respondent''), and it 
now appearing that proposed respondent is 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 Beverly Hills Weight Loss 
Clinics International, Inc., by its duly authorized officers, and its 
attorneys, and counsel for the Federal Trade Commission that:
    1. Proposed respondent Beverly Hills Hills Weight Loss Clinics 
International, Inc. (``Beverly Hills''), is a Virginia corporation, 
with its office and principal place of business located at 200 
Highpoint Avenue, suite B-5, Portsmouth, Rhode Island 02871.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the attached draft complaint.
    3. Proposed respondent waives:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    (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.
    4. 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 respondent, 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.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondent of facts, other than 
jurisdictional facts, or of violations of law as alleged in the draft 
of complaint here attached.
    6. 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. 2.34 of the Commission's 
Rules, the Commission may, without further notice to proposed 
respondent: (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 pubic 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 
respondent's address as stated in this agreement shall constitute 
service. Proposed respondent waives any right it 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.
    7. Proposed respondent has read the attached draft complaint and 
the following order. Proposed respondent understands that once the 
order has been issued, it was be required to file one or more 
compliance reports showing that it has fully complied with the order. 
Proposed respondent further understands that it may be liable for civil 
penalties in the amount provided by law for each violation of the order 
after it becomes final.

Order

Definitions

    For the purposes of this Order, the following definitions shall 
apply:
    A. Competent and reliable scientific evidence shall mean those 
tests, analyses, research, studies, or other evidence conducted and 
evaluated in an objective manner by persons qualified to do so, using 
procedures generally accepted in the relevant profession or science to 
yield accurate and reliable results;
    B. Weight loss program shall mean any program designed to aid 
consumers in weight loss or weight maintenance;
    C. A broadcast medium shall mean any radio or television broadcast, 
cablecast, home video or theatrical release;
    D. For any Order-required disclosure in a print medium to be made 
clearly and prominently  or in a clear and prominent manner, it must be 
given both in the same type style and in: (1) Twelve point type where 
the representation that triggers the disclosure is given in twelve 
point or large type; or (2) the same type size as the representation 
that triggers the disclosure where that representation is given in a 
type size that is smaller than twelve point type. For any Order-
required disclosure given orally in a broadcast medium to be made 
``clearly and prominently'' or in a ``clear and prominent'' manner, the 
disclosure must be given at the same volume and in the same cadence as 
the representation that triggers the disclosure.
    E. A short broadcast advertisement shall mean any advertisement of 
thirty seconds or less duration made in a broadcast medium.

I

    It Is Ordered that respondent, Beverly Hills Weight Loss Clinics 
International, Inc., a corporation, its successors and assigns, and its 
officers, and respondent's agents, representatives and employees, 
directly or through any corporation, subsidiary, division or other 
device, including franchisees or licensees, in connection with the 
advertising, promotion, offering for sale, or sale of any weight loss 
program in or affecting commerce, as ``commerce'' is defined in the 
Federal Trade Commission Act, do forthwith cease and desist from:
    A. Making any representation, directly or by implication, about the 
success of participants on any weight loss program in achieving or 
maintaining weight loss or weight control unless, at the time of making 
any such representation, respondent possesses and relies upon competent 
and reliable scientific evidence substantiating the representation, 
provided, further, that for any representation that:
    (1) Any weight loss achieved or maintained through the weight loss 
program is typical or representative of all or any subset of 
participants using the program, said evidence shall, at a minimum, be 
based on a representative sample of:
    (a) All participants who have entered the program, where the 
representation relates to such persons; provided, however, that the 
required sample may exclude those participants who dropped out of the 
program within two weeks of their entrance, or who were unable to 
complete the program due to illness, pregnancy, or change of residence; 
or
    (b) All participants who have completed a particular phase of the 
program or the entire program, where the representation only relates to 
such persons;
    (2) Any weight loss is maintained long-term, said evidence shall, 
at a minimum, be based upon the experience of participants who were 
followed for a period of at least two years from their completion of 
the active maintenance of respondent's program or earlier termination, 
as applicable; and
    (3) Any weight loss is maintained permanently, said evidence shall, 
at a minimum, be based upon the experience of participants who were 
followed for a period of time after completing the program that is 
either:
    (a) Generally recognized by experts in the field of treating 
obesity as being of sufficient length for predicting that weight loss 
will be permanent, or
    (b) Demonstrated by competent and reliable survey evidence as being 
of sufficient duration to permit such a prediction.
    B. Representing, directly or by implication, except through 
endorsements or testimonials referred to in paragraph I.E. herein, that 
participants of any weight loss program have successfully maintained 
weight loss, unless respondent discloses, clearly and prominently, and 
in close proximity to such representation, the statement: ``For many 
dieters, weight loss is temporary.''; provided further, that respondent 
shall not represent, directly or by implication, that the above-quoted 
statement does not apply to dieters in respondent's weight loss 
program, provided, however, that a mere statement about the existence, 
design, or content of a maintenance program shall not, without more, be 
considered a representation that participants of any weight loss 
program have successfully maintained weight loss.
    C. Representing, directly or by implication, except through short 
broadcast advertisements referred to in paragraph I.D. herein, and 
except through endorsements or testimonials referred to in paragraph 
I.E. herein, that participants of any weight loss program have 
successfully maintained weight loss, unless respondent discloses, 
clearly and prominently, and in close proximity to such representation, 
the following information:
    (1) The average percentage of weight loss maintained by those 
participants;
    (2) The duration over which the weight loss was maintained, 
measured from the date that participants ended the active weight loss 
phase of the program, provided, further, that if any portion of the 
time period covered includes participation in a maintenance program(s) 
that follows active weight loss, such fact must also be disclosed; and
    (3) If the participant population referred to is not representative 
of the general participant population for respondent's programs:
    (a) The proportion of the total participant population in 
respondent's programs that those participants represent, expressed in 
terms of a percentage or actual numbers of participants, or
    (b) The statement: ``Beverly Hills makes no claim that this [these] 
result[s] is [are] representative of all participants in the Beverly 
Hills program.'';
    Provided, further, that compliance with the obligations of this 
paragraph I.C. in no way relieves respondent of the requirement under 
paragraph I.A. of this Order to substantiate any representation about 
the success of participants on any weight loss program in maintaining 
weight loss.
    D. Representing, directly or by implication, in short broadcast 
advertisements, that participants of any weight loss program have 
successfully maintained weight loss, unless respondent:
    (1) Includes, clearly and prominently, and in immediate conjunction 
with such representation, the statement: ``Check at our clinics for 
details about our maintenance record.'';
    (2) For a period of time beginning with the date of the first 
broadcast of any such advertisement and ending no sooner than thirty 
days after the last broadcast of such advertisement, complies with the 
following procedures upon the first presentation of any form asking for 
information from a potential client, but in any event before such 
person has entered into any agreement with respondent:
    (a) Give to each potential client a separate document entitled 
``Maintenance Information,'' which shall include all the information 
required by paragraph I.B. and subparagraphs I.C.(1)-(3) of this order 
and shall be formatted in the exact type size and style as the example 
form below, and shall include the heading (Helvetica 14 pt. bold), 
lead-in (Times Roman 12 pt.), disclosures (Helvetica 14 pt. bold), 
acknowledgment language (Times Roman 12 pt.) and signature block 
therein; provided, further, that no information in addition to that 
required to be included in the document required by this subparagraph 
I.D.(2) shall be included therein:

Maintenance Information

    You may have seen our recent ad about maintenance success. Here's 
some additional information about our maintenance record.

[Disclosure of maintenance statistics goes here

    For many dieters, weight loss is temporary.

    I have read this notice.

----------------------------------------------------------------------
(Client Signature)    (Date)

    (b) require each potential client to sign such document; and
    (c) give each client a copy of such document; and
    Provided, however, that if any potential participant who does not 
then participate in the program refuses to sign or accept a copy of 
such document, respondent shall so indicate on such document and shall 
not, for that reason alone, be found in breach of this subparagraph 
I.D.(2); and
    (3) retain in each client file a copy of the signed maintenance 
notice required by this paragraph;
    Provided, further, that:
    (i) Compliance with the obligations of this paragraph I.D. in no 
way relieves respondent of the requirement under paragraph I.A. of this 
Order to substantiate any representation about the success of 
participants on any weight loss program in maintaining weight loss; and
    (ii) respondent must comply with both paragraph I.D. and paragraph 
I.C. of this Order if respondent includes in any such short broadcast 
advertisement a representation about maintenance success that states a 
number or percentage, or uses descriptive terms that convey a 
quantitative measure such as ``most of our customers maintain their 
weight loss long-term''; and provided, however, that the provisions of 
paragraph I.D. shall not apply to endorsements or testimonials referred 
to in paragraph I.E. herein.
    E. Using any advertisement containing an endorsement or testimonial 
about weight loss success or weight loss maintenance success by a 
participant or participants of respondent's weight loss programs if the 
weight loss success or weight loss maintenance success depicted in the 
advertisement is not representative of what participants in 
respondent's weight loss programs generally achieve, unless respondent 
discloses, clearly and prominently, and in close proximity to the 
endorser's statement of his or her weight loss success or weight loss 
maintenance success:
    (1) what the generally expected success would be for Beverly Hills 
customers in losing weight or maintaining achieved weight loss; 
provided, however, that in determining the generally expected success 
for Beverly Hills customers respondent may exclude those customers who 
dropped out of the program within two weeks of their entrance or who 
were unable to complete the program due to illness, pregnancy, or 
change of residence; or
    (2) one of the following statements:
    (a) ``You should not expect to experience these results.''
    (b) ``This result is not typical. You may not do as well.''
    (c) ``This result is not typical. You may be less successful.''
    (d) ``________'s success is not typical. You may not do as well.''
    (e) ``________'s experience is not typical. You may achieve less.''
    (f) ``Results not typical.''
    (g) ``Results not typical of program participants.'';
    Provided, further, that if the endorsements or testimonials covered 
by this paragraph are made in a broadcast medium, any disclosure 
required by this paragraph must be communicated in a clear and 
prominent manner and in immediate conjunction with the representation 
that triggers the disclosure; and provided, however, that:
    (i) For endorsements or testimonials about weight loss success, 
respondent can satisfy the requirements of subparagraph I.E. (1) by 
accurately disclosing the generally expected success in the following 
phrase: ``Beverly Hills clients lose an average of ________ pounds over 
an average ________--week treatment period''; and
    (ii) If the weight loss success or weight loss maintenance success 
depicted in the advertisement is representative of what participants of 
a group or subset clearly defined in the advertisement generally 
achieve, then, in lieu of the disclosures required in either 
subparagraph I.E. (1) or (2) herein, respondent may substitute a clear 
and prominent disclosure of the percentage of all of respondent's 
customers that the group or subset defined in the advertisement 
represents.
    F. Representing, directly or by implication, that the price at 
which any weight loss program can be purchased is the only cost 
associated with losing weight on that program, unless such is the case.
    G. Representing, directly or by implication, the price at which any 
weight loss program can be purchased, unless respondent discloses, 
clearly and prominently, either:
    (1) In close proximity to such representation, the existence and 
amount of all mandatory costs or fees associated with the program 
offered; or
    (2) in immediate conjunction with such representation, one of the 
following statements:
    (a) ``Plus the cost of [list of products or services that 
participants must purchase at additional cost].''
    (b) ``Purchase of [list of products or services that participants 
must purchase at additional cost] required.'';
    Provided, further, that in broadcast media, if the representation 
that triggers any disclosure required by this paragraph is oral, the 
required disclosure must also be made orally.
    H. Representing, directly or by implication, that any weight loss 
program or services can be obtained for free, unless respondent 
discloses, clearly and prominently, either (1) in close proximity to 
such representation, the existence and amount of all mandatory fees 
associated with the free offer; or (2) in immediate conjunction with 
such representation, the following statement: ``You must pay for [list 
of products or services that participants must purchase at additional 
cost] to take advantage of this free offer.''; provided, further, that 
in broadcast media, if the representation that triggers the disclosure 
is oral, the disclosure required by either (1) or (2) of this paragraph 
must also be made orally.
    I. Failing to disclose over the telephone, for a period of time 
beginning with the date of any advertisement of the price at which any 
weight loss program can be purchased and ending no sooner that 180 days 
after the last dissemination of any such advertisement, to consumers 
who inquire about the cost of any weight loss program or are told about 
the cost of any weight loss program, the existence and amount of any 
mandatory costs or fees associated with participation in the program; 
provided, however, that respondent may satisfy this requirement by 
directing its weight loss centers to disclose the information, by 
providing the center personnel with suggested language to be used when 
responding to telephone inquiries and by making its best efforts to 
ensure compliance with its directive to disclose price information over 
the telephone.
    J. Representing, directly or by implication, the average or typical 
rate or speed at which participants or prospective participants in any 
weight loss program have lost or will lose weight, unless at the time 
of making such representation, respondent possesses and relies upon 
competent and reliable scientific evidence substantiating the 
representation.
    K. Representing, directly or by implication, that participants or 
prospective participants in respondent's weight loss programs have 
reached or will reach a specified weight within a specified time 
period, unless at the time of making such representation, respondent 
possesses and relies upon competent and reliable scientific evidence 
substantiating the representation.
    L. Making comparisons between the efficacy of respondent's weight 
loss program(s) and the efficacy of any other weight loss and/or diet 
program(s), unless at the time of making such representation, 
respondent possesses and relies upon a competent and reliable 
scientific study or survey substantiating the representation.
    M. Making comparisons between the safety of respondent's weight 
loss program(s) and the safety of any other weight loss and/or diet 
program(s), unless at the time of making such representation, 
respondent possesses and relies upon competent and reliable scientific 
evidence substantiating the representation.
    N. Failing to disclose, clearly and prominently, either (1) to each 
participant who, after the first two weeks on the program, is 
experiencing average weekly weight loss that exceeds two percent (2%) 
of said participant's initial body weight, or three pounds, whichever 
is less, for at least two consecutive weeks, or (2) in writing to all 
participants, when they enter the program, that failure to follow the 
diet instructions and consume the total caloric intake recommended may 
involve the risk of developing serious health complications.
    O. Misrepresenting, directly or by implication, the existence, 
contents, validity, results, conclusions, or interpretations of any 
test or study.
    P. Misrepresenting, directly or by implication, the performance, 
efficacy, or safety of any weight loss program or weight loss product.

II

    It is further ordered that respondent 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.

III

    It is further ordered that for three (3) years after the last date 
of dissemination of any representation covered by this Order, 
respondent, or its 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 its possession or control that contradict, qualify, or call 
into question such representation, or the basis relied upon for such 
representation, including complaints from consumers.

IV

    It is further ordered that respondent shall distribute a copy of 
this Order to each of its officers, agents, representatives, 
independent contractors and employees, who is involved in the 
preparation and placement of advertisements or promotional materials or 
in communication with customers or prospective customers or who have 
any responsibilities with respect to the subject matter of this Order; 
and, for a period of five (5) years from the date of entry of this 
Order, distribute same to all future such officers, agents, 
representatives, independent contractors and employees.

V

    It is further ordered that:
    A. Respondent shall distribute a copy of this Order to each of its 
franchisees and licensees and shall contractually bind them to comply 
with the prohibitions and affirmative requirements of this Order; 
respondent may satisfy this contractual requirement by incorporating 
such Order requirements into its current Operations Manual; and
    B. Respondent shall further make reasonable efforts to monitor its 
franchisees' and licensees' compliance with the Order provisions; 
respondent may satisfy this requirement by: (1) Taking reasonable steps 
to notify promptly any franchisee or licensee that respondent 
determines is failing materially or repeatedly to comply with any other 
provision; (2) providing the Federal Trade Commission with the name and 
address of the franchisee or licensee and the nature of the 
noncompliance if the franchisee or licensee fails to comply promptly 
with the relevant Order provision after being so notified; and (3) in 
cases where that franchisee's or licensee's conduct constitutes a 
material or repeated violation of the order, diligently pursuing 
reasonable and appropriate remedies available under its favorable or 
license agreement and applicable state law to bring about a cessation 
of that conduct by the franchisee or licensee.

VI

    It is further ordered that respondent shall, within sixty (60) days 
after the date of service of this Order, file with the Commission a 
report, in writing, setting forth in detail the manner and form in 
which it has 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 Beverly Hills Weight Loss Clinics 
International, Inc., (hereinafter ``Beverly Hills''), marketer of the 
Beverly Hills low-calorie diet (hereinafter ``LCD'') program. The 
Beverly Hills diet program is offered to the public in the eastern 
United States through company-owned and franchised clinics.
    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 sixty (60) days, the Commission will again review the 
agreement and will decide whether it should withdraw from the agreement 
or make final the agreement's proposed order.
    The Commission's complaint charges that the proposed respondent 
deceptively advertised: (1) Its LCD program's success in helping 
customers achieve and maintain weight loss; (2) the typical rate or 
speed at which customers will lose weight; (3) the time frame within 
which customers will achieve their desired weight loss goal; (4) the 
safety of the Beverly Hills program in comparison to other weight loss 
programs; (5) the purchase price of the Beverly Hills program; and (6) 
the terms of the company's offers of free weight loss services. The 
complaint further alleges that Beverly Hills engaged in the deceptive 
practice of failing to warn clients it monitors of the health 
importance of following the diet instructions.

Success

    The complaint against Beverly Hills alleges that the company failed 
to possess a reasonable basis for claims it made regarding the success 
of its customers in losing weight and avoiding the regain of weight 
lost during the program. Through consumer testimonials and other 
advertisements, Beverly Hills represented that its customers typically 
are successful in reaching their weight loss goals and in maintaining 
their weight loss achieved under the Beverly Hills diet program either 
long-term or permanently.
    The Commission believes that these success claims for customer 
weight loss and maintenance of achieved weight loss are deceptive 
because at the time it made the claims Beverly Hills 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 several ways. 
First, the order (part I.A.) requires the company to possess a 
reasonable basis consisting of competent and reliable scientific 
evidence substantiating any claim about the success of participants on 
any diet program in achieving or maintaining weight loss. To ensure 
compliance, the order further specifies what this level of evidence 
shall consist of when certain types of success claims are made:
    (1) In the case of claims that weight loss is typical or 
representative of all participants using the program or any subset of 
those participants, that evidence shall be based on a representative 
sample of: (a) All participants who have entered the program, where the 
representation relates to such persons; or (b) all participants who 
have completed a particular phase of the program or the entire program, 
where the representation only relates to such persons.
    (2) In the case of claims that any weight loss is maintained long-
term, that evidence shall be based upon the evidence of participants 
who were followed for a period of at least two years after their 
completion of the respondent's program, including any periods of 
participation in respondent's maintenance program.
    (3) In the case of claims that weight loss is maintained 
permanently, that evidence shall be based upon the experience of 
participants who were followed for a period of time after completing 
the program that is either: (a) Generally recognized by experts in the 
field of treating obesity as being of sufficient length to constitute a 
reasonable basis for predicting that weight loss will be permanent; or 
(b) demonstrated by competent and reliable survey evidence as being of 
sufficient duration to permit such a prediction.
    Second, as measures to ensure future compliance, the proposed order 
requires the proposed respondent for any claim that participants of any 
diet program have successfully maintained weight loss to disclose the 
fact that ``For many dieters, weight loss is temporary'' (part I.B.), 
as well as the following information relating to that claim (part 
I.C.):
    (1)The average percentage of weight loss maintained by those 
participants (e.g., ``60% of achieved weight loss was maintained''),
    (2) the duration over which the weight loss was maintained, 
measured from the date that participants ended the active weight loss 
phase of the program, and the fact that all or a portion of the time 
period covered includes participation in proposed respondent's 
maintenance program(s) that follows active weight loss, if that is the 
case--e.g., ``participants maintain an average of 60% of weight loss 22 
months after active weight loss (includes 18 months on maintenance 
program)'', and
    (3) where the participant population referred to is not 
representative of the general participant population for that program, 
the proportion of the total participant population that those 
participants represent, expressed in terms of a percentage or actual 
numbers of participants--e.g. ``Participants on maintenance--30% of our 
clients--kept off an average of 66% of the weight for one year 
(includes time on maintenance program)'' or, in lieu of that factual 
disclosure, the statement: ``Beverly Hills makes no claim that this 
result is representative of all participants in the Beverly Hills 
program.''
    Third, for maintenance success claims made in broadcast 
advertisements of thirty seconds or less duration, the proposed order 
(part I.D.) requires that Beverly Hills, in lieu of making the factual 
disclosures required for such claims by Part I.C: (1) Include in such 
advertisements the statement ``Check at our centers for details about 
our maintenance record.''; and (2) provide consumers at point-of-sale 
with a required form that includes the factual disclosures required by 
Part I.C., which form must be signed by the client and retained in the 
company's client file.
    The proposed order makes clear that this alternative disclosure 
requirement does not relieve Beverly Hills of the obligation to 
substantiate any maintenance success claim, in accordance with part 
I.A. of the order, and it ``takes back'' the exception from full 
quantitative disclosures in short broadcast advertising if Beverly 
Hills makes a maintenance success claim that uses numbers or 
descriptive terms that convey a quantitative measure, such as ``most of 
our customers maintain their weight loss long term.'' Beverly Hills in 
that case would have to make all the required disclosures in the ad and 
provide the disclosures at point-of-sale.
    Fourth, for weight-loss and weight-loss maintenance success claims 
made through endorsements or testimonials that are not representative 
of what Beverly Hills idet program participants generally achieve, the 
order (part I.E.) requires that Beverly Hills disclosure either what 
the generally expected success would be for Beverly Hills customers, or 
one of several alternative statements, such as ``This result is not 
typical. You may be less successful'', which explains the limited 
applicability of atypical testimonials in accordance with the 
Commission's ``Guides Concerning Use of Endorsements and Testimonials 
in Advertising'' 16 CFR 255.2(a). Under the proposed order, Beverly 
Hills may satisfy the requirements of the first disclosure concerning 
generally expected success by accurately disclosing those facts in the 
following format: ``Beverly Hills clients lose an average of ____ 
pounds over an average ____-week treatment period.''
    Finally, the proposed order (part I.P.) generally prohibits the 
company from misrepresenting the performance or efficacy of any weight 
loss program.

Rate of Weight Loss

    The Commission's complaint further alleges that Beverly Hills 
failed to possess a reasonable basis for claims it made concerning the 
average rate of weight loss for participants in its program. The 
proposed consent order addresses this practice (part I.J.) by 
prohibiting Beverly Hills from representing that participants in its 
programs will lose weight at an average or typical rate or speed, 
unless Beverly Hills possesses and relies upon competent and reliable 
scientific evidence substantiating the representation.

Projection of Weight Loss

    The Commission's complaint further alleges that Beverly Hills 
failed to possess a reasonable basis for its claim made during initial 
sales presentations that consumers will typically reach their desired 
weight-loss goal within the time frame computed by Beverly Hills 
personnel. To address this practice, the proposed order (part I.K.) 
prohibits Beverly Hills from representing that participants or 
prospective participants will reach a specified weight within a 
specified period of time, unless proposed respondent possesses and 
relies upon competent and reliable scientific evidence substantiating 
the representation.

Comparative Safety Claim

    The Commission's complaint further alleges that Beverly Hills 
failed to possess a reasonable basis for its claim that its weight loss 
programs are safer than other weight loss programs that do not include 
essential fatty acid supplementation. The proposed order seeks to 
address this practice in two ways. First, part I.M. requires the 
company to have competent and reliable scientific evidence 
substantiating any claim that compares the safety of its weight loss 
program with that of any other weight loss or diet program. Second, 
part I.P. of the proposed order prohibits the company from 
misrepresenting, among other things, the safety of any weight loss 
program or weight loss product.

Monitoring Practices

    According to the complaint, Beverly Hills provides its customers 
with diet instructions that require the customers to come in to one of 
the proposed respondent's centers three times a week for monitoring of 
their progress, including weighing in. In the course of regularly 
ascertaining weight loss progress, respondent, in some instances, is 
presenting with weight loss results indicating that customers are 
losing weight significantly in excess of their projected goals, which 
is an indication that they may not be consuming all of the food 
prescribed by their diet instructions. According to the complaint, such 
conduct could, if not corrected promptly, result in health 
complications. In light of this monitoring practice, the Commission's 
complaint alleges that Beverly Hills has failed to disclose to 
consumers who are losing weight significantly in excess of their 
projected goals that failing to follow the diet instructions and 
consume all of the food prescribed could result in health 
complications.
    The proposed consent order seeks to address the alleged monitoring 
misrepresentation cited in the accompanying complaint in two ways. 
First, the order (part I.N.) requires Beverly Hills to disclose in 
writing to all participants when they enter the program, that failure 
to follow the program instructions and eat all of the food recommended 
may involve the risk of developing serious health complications. 
Second, the proposed order (part I.P.) generally prohibits any 
misrepresentation concerning the safety of any weight loss program.

Price

    The Commission's complaint against Beverly Hills also alleges that 
the company falsely represented that the price it advertised far its 
diet program is the only cost associated with losing weight on the diet 
program, when, in fact, there are substantial additional mandatory 
expenses that far exceed the advertised price. The complaint further 
alleges that Beverly Hills failed to disclose adequately to consumers 
the existence and amount of all mandatory expenses associated with 
participation in the diet program.
    The proposed consent order seeks to address these practices in 
three ways. First, part I.F. of the proposed order prohibits untrue 
representations that an advertised price for a weight loss program is 
the only cost associated with losing weight on that program. Second, 
for any advertisement containing a price at which any weight loss 
program can be purchased, the proposed order (part I.G.) requires 
Beverly Hills to disclose either the existence and amount of all 
mandatory costs or fees associated with the program offered or a 
statement identifying a list of all products or services that 
participants must purchase at an additional cost. This disclosure must 
be made orally under the proposed order if the price representation is 
made orally under the proposed order if the free offer is made orally 
in broadcast media.
    Finally, the proposed order (part I.I.) requires the proposed 
respondent to disclose over the telephone to callers who inquire or are 
told about the cost of any weight loss program, the existence and 
amount of any mandatory costs or fees associated with participation in 
the program. Under the order, Beverly Hills can satisfy this 
requirement by: (1) Providing the center personnel with suggested 
language to be used when responding to telephone inquiries; and (2) 
making its best efforts to ensure compliance with its directive to 
disclose price information over the telephone.

Fee Offers

    The Commission's complaint also alleges that, through offers of 
free weight loss services, Beverly Hills falsely represented that its 
weight loss programs were being offered to consumers at no cost. The 
complaint further alleges that the company failed to disclose 
adequately to consumers that the receipt of free weight loss services 
is contingent upon the purchase, at substantial expense to the 
consumer, of other goods or services that are mandatory for 
participation in the company's weight loss programs.
    The proposed consent order (part I.H.) seeks to address this 
practice by requiring that the company disclose either (1) the 
existence and amount of all mandatory fees associated with the free 
offer, or (2) a list of all products or services that participants must 
purchase at an additional cost to take advantage of the free offer. 
This disclosure must be made orally under the proposed order if the 
free offer is made orally in broadcast media.
    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.
    In the matter of Doctors Medical Weight Loss Centers, Inc., a 
corporation, Doctors Weight Loss Centers, Inc., a corporation, and 
Joyce A. Schuman, individually and as an officer of said 
corporation. File No. 912 3295.

Agreement Containing Consent Order To Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Doctors Medical Weight Loss Centers, Inc. 
(``DMWLC''), a corporation, Doctors Weight Loss Centers, Inc. 
(``DWLC''), a corporation, and Joyce A. Schuman, individually and as an 
officer of said corporations, and it now appearing, that DMWLC, a 
corporation, DWLC, a corporation, and Joyce A. Schuman, individually 
and as an officer of said corporation (hereinafter, collectively, 
``proposed respondents'' or ``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 DMWLC and DWLC, by their duly 
authorized officers, Joyce A. Schuman, and counsel for the Federal 
Trade Commission, that:
    1. Proposed respondents DMWLC and DWLC are corporations organized, 
existing and formerly doing business under and by virtue of the laws of 
the State of Florida, with their offices and principal place of 
business located at 5479 A North Federal Highway, Fort Lauderdale, 
Florida 33309.
    2. Proposed respondent Joyce A. Schuman is an individual with her 
principal residence located at 2730 Sea Island Drive, Fort Lauderdale, 
Florida 33301.
    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;
    (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. 2.34 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' addresses as stated in this agreement shall constitute 
service. Proposed respondents waive any right they may have to any 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

Definitions

    For the purposes of this Order, the following definitions shall 
apply:
    A. Competent and reliable scientific evidence shall mean those 
tests, analyses, research, studies, or other evidence based on the 
expertise of professionals in the relevant area, that have 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;
    B. Weight loss program shall mean any program designed to aid 
consumers in weight loss or weight maintenance;
    C. A broadcast medium shall mean any radio or television broadcast, 
cablecast, home video, or theatrical release;
    D. For any Order-required disclosure in print media to be made 
clearly and prominently, or in a clear and prominent manner, it must be 
given both in the same type style and in: (1) Twelve point type where 
the representation that triggers and disclosure is given in twelve 
point or larger type; or (2) the same type size as the representation 
that triggers the disclosure where that representation is given in a 
type size that is smaller than twelve point type. For any Order-
required disclosure given orally in a broadcast medium to be made 
``clearly and prominently,'' or in a ``clear and prominent manner,'' 
the disclosure must be given at the same volume and in the same cadence 
as the representation that triggers the disclosure;
    E. A short broadcast advertisement shall mean any advertisement of 
thirty seconds or less duration made in a broadcast medium.

I.

    It is ordered that respondents DMWLC, a corporation, DWLC, a 
corporation, their successors and assigns, and their officers, and 
Joyce A. Schuman, individually and as an officer of said corporations, 
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 weight loss program, in or affecting commerce, as ``commerce'' 
is defined in the Federal Trade Commission Act, do forthwith cease and 
desist from:
    A. Making any representation, directly or by implication, about the 
success of participants on any weight loss program in achieving or 
maintaining weight loss or weight control unless, at the time of making 
any such representation, respondents possess and rely upon competent 
and reliable scientific evidence substantiating the representation, 
provided, further, that for any representation that:
    (1) Any weight loss achieved or maintained through the weight loss 
program is typical or representative of all or any subset of 
participants of respondents' program, said evidence shall, at a 
minimum, be based on a representative sample of:
    (a) All participants who have entered the program, where the 
representation relates to such persons; provided, however, that the 
required sample may exclude those participants who dropped out of the 
program within two weeks of their entrance, or who were unable to 
complete the program due to illness, pregnancy, or change of residence; 
or
    (b) All participants who have completed a particular phase of the 
program or the entire program, where the representation only relates to 
such persons;
    (2) Any weight loss is maintained long-term, said evidence shall, 
at a minimum, be based upon the experience of participants who were 
followed for a period of at least two years from their completion of 
the active maintenance phase of respondents' program or earlier 
termination, as applicable; and
    (3) Any weight loss is maintained permanently, said evidence shall, 
at a minimum, be based upon the experience of participants who were 
followed for a period of time after completing the program that is 
either:
    (a) Generally recognized by experts in the field of treating 
obesity as being of sufficient length for predicting that weight loss 
will be permanent, or
    (b) Demonstrated by competent and reliable survey evidence as being 
of sufficient duration to permit such a prediction.
    B. Representing, directly or by implication, except through 
endorsements or testimonials referred to in paragraph I.E. herein, that 
participants of any weight loss program have successfully maintained 
weight loss, unless respondents disclose, clearly and prominently, and 
in close proximity to such representation, the statement: ``For many 
dieters, weight loss is temporary''; provided, further, that 
respondents shall not represent, directly or by implication, that the 
above-quoted statement does not apply to dieters in respondents' weight 
loss program; provided, however, that a mere statement about the 
existence, design, or content of a maintenance program shall not, 
without more, be considered a representation that participants of any 
weight loss program have successfully maintained weight loss.
    C. Representing, directly or by implication, except through short 
broadcast advertisements referred to in paragraph I.D. herein, and 
except through endorsements or testimonials referred to in paragraph 
I.E. herein, that participants on any weight loss program have 
successfully maintained weight loss, unless respondents disclose, 
clearly and prominently, and in close proximity to such representation, 
the following information:
    (1) The average percentage of weight loss maintained by those 
participants;
    (2) The duration over which the weight loss was maintained, 
measured from the date that participants ended the active weight loss 
phase of the program, provided, further, that if any portion of the 
time period covered includes participation in a maintenance program(s) 
that follows active weight loss, such fact must also be disclosed; and
    (3) if the participant population referred to is not representative 
of the general participant population for respondents' programs:
    (a) The proportion of the total participant population in 
respondents' programs that those participants represent, expressed in 
terms of a percentage or actual numbers of participants, or
    (b) The statement: ``[Doctors Medical Weight Loss Centers/Doctors 
Weight Loss Centers] makes no claim that this [these] result[s] is 
[are] representative of all participants in the [Doctors Medical Weight 
Loss Centers/Doctors Weight Loss Centers] program.'' provided, further, 
that compliance with the obligations of this paragraph I.C. in no way 
relieves respondents of the requirement under paragraph I.A. of this 
Order to substantiate any representation about the success of 
participants on any weight loss program in maintaining weight loss.
    D. Representing, directly or by implication, in short broadcast 
advertisements, that participants of any weight loss program have 
successfully maintained weight loss, unless respondents:
    (1) Include, clearly and prominently, and in immediate conjunction 
with such representation, the statement: ``Check at our centers for 
details about our maintenance record'';
    (2) For a period of time beginning with the date of the first 
broadcast of any such advertisement and ending no sooner than thirty 
days after the last broadcast of such advertisement, comply with the 
following procedures upon the first presentation of any form asking for 
information from a potential client, but in any event before such 
person has entered into any agreement with respondents:
    (a) Give to each potential client a separate document entitled 
``Maintenance Information,'' which shall include all the information 
required by paragraph I.B. and subparagraphs I.C. (1)-(3) of this Order 
and shall be formatted in the exact type size and style as the example 
form below, and shall include the heading (Helvetica 14 point bold, 
lead-in (Times Roman 12 point), disclosures (Helvetica 14 point bold), 
acknowledgment language (Times Roman 12 point), and signature block 
therein; provided, further, that no information in addition to that 
required to be included in the document required by this subparagraph 
I.D. (2) shall be included therein;
Maintenance Information
    You may have seen our recent ad about maintenance success. Here's 
some additional information about our maintenance record.
    [Disclosure of maintenance statistics goes here] For many dieters, 
weight loss is temporary.
    I have read this notice.
----------------------------------------------------------------------
(Client Signature)        (Date)
    (b) Require each potential client to sign such document; and
    (c) Give each client a copy of such document; and
    (3) Retain in each client file a copy of the signed maintenance 
notice required by this paragraph;

provided, further, that:
    (i) Compliance with the obligations of this paragraph I.D. in no 
way relieves respondents of the requirement under paragraph I.A. of 
this Order to substantiate any representation about the success of 
participants on any weight loss program in maintaining weight loss;
    (ii) Respondents must comply with both paragraph I.D. and paragraph 
I.C. of this Order if respondents include in any such short broadcast 
advertisement a representation about maintenance success that states a 
number or percentage, or uses descriptive terms that convey a 
quantitative measure such as ``most of our customers maintain their 
weight loss long-term'';
provided, however, that the provisions of paragraph I.D. shall not 
apply to endorsements or testimonials referred to in paragraph I.E. 
herein.
    E. Using any advertisement containing an endorsement or testimonial 
about weight loss success or weight loss maintenance success by a 
participant or participants of respondents' weight loss programs if the 
weight loss success or weight loss maintenance success depicted in the 
advertisement is not representative of what participants of 
respondents' weight loss programs generally achieve, unless respondents 
disclose, clearly and prominently, and in close proximity to the 
endorser's statement of his or her weight loss success or weight loss 
maintenance success:
    (1) What the generally expected success would be for DMWLC/DWLC 
customers in losing weight or maintaining achieved weight loss; 
provided, however, that the generally expected success for DMWLC/DWLC 
customers may exclude those customers who dropped out of the program 
within two weeks of their entrance, or who were unable to complete the 
program due to illness, pregnancy, or change of residence; or
    (2) One of the following statements:
    (a) ``You should not expect to experience these results.''
    (b) ``This result is not typical. You may not do as well.''
    (c) ``This result is not typical. You may be less successful.''
    (d) ``________'s success is not typical. You may not do as well.''
    (e) ``________'s experience is not typical. You may achieve less.''
    (f) ``Results not typical.''
    (g) ``Results not typical of program participants.''

provided, further, that if the endorsements or testimonials covered by 
this paragraph are made in a broadcast medium, any disclosure required 
by this paragraph must be communicated in a clear and prominent manner, 
and in immediate conjunction with the representation that triggers the 
disclosure;

provided, however, that:
    (i) For endorsements or testimonials about weight loss success, 
respondents can satisfy the requirements of subparagraph I.E. (1) by 
accurately disclosing the generally expected success in the following 
phrase: ``Doctors Medical Weight Loss Centers, Inc./Doctors Weight Loss 
Centers, Inc. participants lose an average of ________ pounds over an 
average ________-week treatment period''; and
    (ii) If the weight loss success or weight loss maintenance success 
depicted in the advertisement is representative of what participants of 
a group or subset clearly defined in the advertisement generally 
achieve, then, in lieu of the disclosures required in either 
subparagraphs I.E. (1) or (2) herein, respondents may substitute a 
clear and prominent disclosure of the percentage of all of respondents' 
customers that the group or subset defined in the advertisement 
represents.
    F. Representing, directly or by implication, that the price at 
which any weight loss program can be purchased is the only cost 
associated with losing weight on that program, unless such is the case.
    G. Representing, directly or by implication, the price at which any 
weight loss program can be purchased, unless respondents disclose, 
clearly and prominently, either:
    (1) In close proximity to such representation, the existence and 
amount of all mandatory fees associated with the program offered; or
    (2) In immediate conjunction with such representation, one of the 
following statements:
    (a) ``Plus the cost of [list of products or services that 
participants must purchase at additional cost]''; or
    (b) ``Purchase of [list of products or services that participants 
must purchase at additional cost] required'';

provided, further, that in broadcast media, if the representation that 
triggers any disclosure required by this paragraph is oral, the 
required disclosure must also be made orally.
    H. Failing to disclose over the telephone, for a period beginning 
with the date of any advertisement of the price at which any weight 
loss program can be purchased and ending no sooner than 180 days after 
the last dissemination of such advertisement, to consumers who inquire 
about the cost of any weight loss program, or are told about the cost 
of any weight loss program, the existence and amount of any and all 
mandatory costs or fees associated with participation in the program; 
provided, however, that respondents may satisfy this requirement by 
directing their weight loss centers to disclose the information, by 
providing the center personnel with suggested language to be used when 
responding to phone inquiries and by making their best efforts to 
ensure compliance with their directive to disclose price information 
over the telephone.
    I. Representing, directly or by implication, that prospective 
participants in respondents' weight loss programs will reach a 
specified weight within a specified time period, unless at the time of 
making such representation, respondents possess and rely upon competent 
and reliable scientific evidence substantiating the representation.
    J. Representing, directly or by implication, the average or typical 
rate or speed at which any participant on any weight loss program has 
lost or will lose weight, unless at the time of making any such 
representation, respondents possess and rely upon competent and 
reliable scientific evidence that substantiates the representation.
    K. Failing to disclose, clearly and prominently, either (1) to each 
participant who, after the first two weeks on the program, is 
experiencing average weekly weight loss that exceeds two percent (2%) 
of said participant's initial body weight, or three pounds, whichever 
is less, for at least two consecutive weeks, or (2) in writing to all 
participants when they enter the program, that failure to follow the 
program protocol and eat all of the food recommended may involve the 
risk of developing serious health complications.
    L. Misrepresenting, directly or by implication, the performance, 
efficacy, or safety of any weight loss program.

II 

    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 respondents 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(s) that may affect compliance obligations arising out of 
this Order.

III

    It is further ordered that respondent Joyce A. Schuman shall 
promptly notify the Commission of the discontinuance of her present 
business or employment and of her affiliation with a new business or 
employment. In addition, for a period of three (3) years from the 
service date of this Order, the individual respondent shall promptly 
notify the Commission of each affiliation with a new business or 
employment whose activities relate to the advertising, promotion, 
offering for sale, or sale of any weight loss program. When so required 
under this paragraph, each such notice shall include the individual 
respondent's new business address and a statement of the nature of the 
business or employment in which the individual respondent is newly 
engaged, as well as a description of the individual 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.

IV

    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 possessed and relied upon to substantiate any 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.

V

    It is further ordered that respondents shall distribute a copy of 
this Order to each of their officers, agents, representatives, 
independent contractors and employees who are involved in the 
preparation and placement of advertisements or promotional materials or 
in communication with customers or prospective customers or who have 
any responsibilities with respect to the subject matter of this Order; 
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 service of this Order, file with the Commission 
a report, in writing, setting forth in detail the manner and from in 
which they have complied with this Order.

File No. 922 3001.
    In the matter of Quick Weight Loss Centers, Inc., a Texas 
corporation, Don K. Gearheart, individually and as an officer of 
said corporation, and Joyce A. Schuman, individually and as an 
officer of said corporation.

Agreement Containing Consent Order To Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Quick Weight Loss Centers, Inc., a Texas 
corporation (``QWLC-Tex.''), Don K. Gearheart, individually and as an 
officer of said corporation, and Joyce A. Schuman, individually and as 
an officer of said corporation, and it now appearing that QWLC-Tex., a 
corporation, Don K. Gearheart, individually and as an officer of said 
corporation, and Joyce A. Schuman, individually and as an officer of 
said corporation (hereinafter, collectively, ``proposed respondents'' 
or ``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 QWLC-Tex., by its duly 
authorized officers, Don K. Gearheart, Joyce A. Schuman, and counsel 
for the Federal Trade Commission, that:
    1. Proposed respondent QWLC-Tex. is a corporation organized, 
existing and formerly doing business under and by virtue of the laws of 
the State of Texas, with its offices and principal place of business 
located at 2900 Gateway, suite 605, Irving, Texas 75063.
    2. Proposed respondent Don Gearheart is an individual with his 
principal residence located at 9520 East Pinnacle Pear Road, 
Scottsdale, Arizona 85255.
    3. Proposed respondent Joyce A. Schuman is an individual with her 
principal residence located at 2730 Sea Island Drive, Fort Lauderdale, 
Florida 33301.
    4. Proposed respondents admit all the jurisdictional facts set 
forth in the attached draft complaint.
    5. 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;
    (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.
    6. 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.
    7. 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.
    8. 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. 2.34 of the Commission's 
Rules, the Commission may, without further notice to proposed 
respondents: (1) 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' addresses 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.
    9. 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

Definitions

    For the purposes of this Order, the following definitions shall 
apply:
    A. Competent and reliable scientific evidence shall mean those 
tests, analyses, research, studies, or other evidence based on the 
expertise of professionals in the relevant area, that have 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;
    B. Weight loss program shall mean any program designed to aid 
consumers in weight loss or weight maintenance;
    C. A broadcast medium shall mean any radio or television broadcast, 
cablecast, home video, or theatrical release;
    D. For any Order-required disclosure in print media to be made 
clearly and prominently, or in a clear and prominent manner, it must be 
given both in the same type style and in: (1) Twelve point type where 
the representation that triggers the disclosure is given in twelve 
point or larger type; or (2) the same type size as the representation 
that triggers the disclosure where that representation is given in a 
type size that is smaller than twelve point type. For any Order-
required disclosure given orally in a broadcast medium to be made `` 
clearly and prominently,'' or in a ``clear and prominent manner,'' the 
disclosure must be given at the same volume and in the same cadence as 
the representation that triggers the disclosure;
    E. A short broadcast advertisement shall mean any advertisement of 
thirty seconds or less duration made in a broadcast medium.

I

    It is ordered that respondents QWLC-Tex., a corporation, its 
successors and assigns, and its officers, and Don K. Gearheart, 
individually and as an officer of said corporation, and Joyce A. 
Schuman, individually and as an officer 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 weight loss program, in or affecting commerce, as ``commerce'' 
is defined in the Federal Trade Commission Act, do forthwith cease and 
desist from:
    A. Making any representation, directly or by implication, about the 
success of participants on any weight loss program in achieving or 
maintaining weight loss or weight control unless, at the time of making 
any such representation, respondents possess and rely upon competent 
and reliable scientific evidence substantiating the representation, 
provided, further, that for any representation that:
    (1) Any weight loss achieved or maintained through the weight loss 
program is typical or representative of all or any subset of 
participants of respondents' program, said evidence shall, at a 
minimum, be based on a representative sample of:
    (a) All participants who have entered the program, where the 
representation relates to such persons; provided, however, that the 
required sample may exclude those participants who dropped out of the 
program within two weeks of their entrance, or who were unable to 
complete the program due to illness, pregnancy, or change of residence; 
or
    (b) All participants who have completed a particular phase of the 
program or the entire program, where the representations only relates 
to such persons;
    (2) Any weight loss is maintained long-term, said evidence shall, 
at a minimum, be based upon the experience of participants who were 
followed for a period of at least two years from their completion of 
the active maintenance phase of respondents' program or earlier 
termination, as applicable; and
    (3) Any weight loss is maintained permanently, said evidence shall, 
at a minimum, be based upon the experience of participants who were 
followed for a period of time after completing the program that is 
neither:
    (a) Generally recognized by experts in the field of treating 
obesity as being of sufficient length for predicting that weight loss 
will be permanent, or
    (b) Demonstrated by competent and reliable survey evidence as being 
of sufficient duration to permit such a prediction.
    B. Representing, directly or by implication, except through 
endorsements or testimonials referred to in paragraph I.E. herein, that 
participants of any weight loss program have successfully maintained 
weight loss, unless respondents disclose, clearly and prominently, and 
in close proximity to such representation, the statement: ``For many 
dieters, weight loss is temporary''; provided, further, that 
respondents shall not represent, directly or by implication, that the 
above-quoted statement does not apply to dieters in respondents' weight 
loss program; provided, however, that a mere statement about the 
existence, design, or content of a maintenance program shall not, 
without more, be considered a representation that participants of any 
weight loss program have successfully maintained weight loss.
    C. Representing, directly or by implication, except through short 
broadcast advertisements referred to in paragraph I.D. herein, and 
except through endorsements or testimonials referred to in paragraph 
I.E. herein, that participants on any weight loss program have 
successfully maintained weight loss, unless respondents disclose, 
clearly and prominently, and in close proximity to such representation, 
the following information:
    (1) The average percentage of weight loss maintained by those 
participants;
    (2) The duration over which the weight loss was maintained, 
measured from the date that participants ended the active weight loss 
phase of the program, provided, further, that if any portion of the 
time period covered includes participation in a maintenance program(s) 
that follows active weight loss, such fact must also be disclosed; and
    (3) If the participant population referred to is not representative 
of the general participant population for respondents' programs:
    (a) The proportion of the total participant population in 
respondents' programs that those participants represent, expressed in 
terms of a percentage or actual numbers of participants, or
    (b) The statement: ``[Quick Weight Loss Centers] makes no claim 
that this [these] result[s] is [are] representative of all participants 
in the [Quick Weight Loss Centers] program.''

provided, further, that compliance with the obligations of this 
paragraph I.C. in no way relieves respondents of the requirement under 
paragraph I.A. of this Order to substantiate any representation about 
the success of participants on any weight loss program in maintaining 
weight loss.
    D. Representing, directly or by implication, in short broadcast 
advertisements, that participants of any weight loss program have 
successfully maintained weight loss, unless respondents:
    (1) Include, clearly and prominently, and in immediate conjunction 
with such representation, the statement: ``Check at our centers for 
details about our maintenance record'';
    (2) For a period of time beginning with the date of the first 
broadcast of any such advertisement and ending no sooner than thirty 
days after the last broadcast of such advertisement, comply with the 
following procedures upon the first presentation of any form asking for 
information from a potential client, but in any event before such 
person has entered into any agreement with respondents:
    (a) Give to each potential client a separate document entitled 
``Maintenance Information,'' which shall include all the information 
required by paragraph I.B. and subparagraphs I.C. (1)-(3) of this Order 
and shall be formatted in the exact type size and style as the example 
form below, and shall include the heading (Helvetica 14 point bold), 
lead-in (Times Roman 12 point), disclosures (Helvetica 14 point bold), 
acknowledgment language (Times Roman 12 point), and signature block 
therein; provided, further, that no information in addition to that 
required to be included in the document required by this subparagraph 
I.D (2) shall be included therein;

Maintenance Information

    You may have seen our recent ad about maintenance success. 
Here's some additional information about our maintenance record.

[Disclosure of maintenance statistics goes here ________] For many 
dieters, weight loss is temporary.

I have read this notice.-----------------------------------------------
(Client Signature)      (Date)

    (b) Require each potential client to sign such document; and
    (c) Give each client a copy of such document; and
    (3) retain in each client file a copy of the signed maintenance 
notice required by this paragraph;

provided, further, that:
    (i) Compliance with the obligations of this paragraph I.D. in no 
way relieves respondents of the requirement under paragraph I.A. of 
this Order to substantiate any representation about the success of 
participants on any weight loss program in maintaining weight loss;
    (ii) Respondents must comply with both paragraph I.D. and paragraph 
I.C. of this Order if respondents include in any such short broadcast 
advertisement a representation about maintenance success that states a 
number of percentage, or uses descriptive terms that convey a 
quantitative measure such as ``most of our customers maintain their 
weight loss long-term'';

provided, however, that the provisions of paragraph I.D. shall not 
apply to endorsements or testimonials referred to in paragraph I.E. 
herein.
    E. Using any advertisement containing an endorsement or testimonial 
about weight loss success or weight loss maintenance success by a 
participant or participants of respondents' weight loss programs if the 
weight loss success or weight loss maintenance success depicted in the 
advertisement is not representative of what participants of 
respondents' weight loss programs generally achieve, unless respondents 
disclose, clearly and prominently, and in close proximity to the 
endorser's statement of his or her weight loss success or weight loss 
maintenance success:
    (1) What the generally expected success would be for QWLC-Tex. 
customers in losing weight or maintaining achieved weight loss; 
provided, however, that the generally expected success for QWLC-Tex. 
customers may exclude those customers who dropped out of the program 
within two weeks of their entrance, or who were unable to complete the 
program due to illness, pregnancy, or change of residence; or
    (2) one of the following statements:
    (a) ``You should not expect to experience these results.''
    (b) ``This result is not typical. You may not do as well.''
    (c) ``This result is not typical. You may be less successful.''
    (d) ``__________'s success is not typical. You may not do as 
well.''
    (e) ``__________'s experience is not typical. You may achieve 
less.''
    (f) ``Results not typical.''
    (g) ``Results not typical of program participants.''

provided, further, that if the endorsements or testimonials covered by 
this paragraph are made in a broadcast medium, any disclosure required 
by this paragraph must be communicated in a clear and prominent manner, 
and in immediate conjunction with the representation that triggers the 
disclosure;

provided, however, that:
    (i) For endorsements or testimonials about weight loss success, 
respondents can satisfy the requirements of subparagraph I.E. (1) by 
accurately disclosing the generally expected success in the following 
phrase: ``Quick Weight Loss Centers, Inc. participants lose an average 
of __________ pounds over an average __________-week treatment 
period''; and
    (ii) If the weight loss success or weight loss maintenance success 
depicted in the advertisement is representative of what participants of 
a group or subset clearly defined in the advertisement generally 
achieve, then, in lieu of the disclosures required in either 
subparagraphs I.E. (1) or (2) herein, respondents may substitute a 
clear and prominent disclosure of the percentage of all of respondents' 
customers that the group or subset defined in the advertisement 
represents.
    F. Representing, directly or by implication, that the price at 
which any weight loss program can be purchased is the only cost 
associated with losing weight on that program, unless such is the case.
    G. Representing, directly or by implication, the price at which any 
weight loss program can be purchased, unless respondents disclose, 
clearly and prominently, either:
    (1) In close proximity to such representation, the existence and 
amount of all mandatory fees associated with the program offered; or
    (2) in immediate conjunction with such representation, one of the 
following statements:
    (a) ``Plus the cost of [list of products or services that 
participants must purchase at additional cost]''; or
    (b) ``Purchase of [list of products or services that participants 
must purchase at additional cost] required'';

provided, further, that in broadcast media, if the representation that 
triggers any disclosure required by this paragraph is oral, the 
required disclosure must also be made orally.
    H. Failing to disclose over the telephone, for a period beginning 
with the date of any advertisement of the price at which any weight 
loss program can be purchased and ending no sooner than 180 days after 
the last dissemination of such advertisement, to consumers who inquire 
about the cost of any weight loss program, or are told about the cost 
of any weight loss program, the existence and amount of any and all 
mandatory costs or fees associated with participation in the program;

provided, however, that respondents may satisfy this requirement by 
directing their weight loss centers to disclose the information, by 
providing the center personnel with suggested language to be used when 
responding to phone inquiries and by making their best efforts to 
ensure compliance with their directive to disclose price information 
over the telephone.
    I. Representing, directly or by implication, that prospective 
participants in respondents' weight loss programs will reach a 
specified weight within a specified time period, unless at the time of 
making such representation, respondents possess and rely upon competent 
and reliable scientific evidence substantiating the representation.
    J. Representing, directly or by implication, the average or typical 
rate or speed at which any participant on any weight loss program has 
lost or will lose weight, unless at the time of making any such 
representation, respondents possess and rely upon competent and 
reliable scientific evidence that substantiates the representation.
    K. Failing to disclose, clearly and prominently, either (1) to each 
participant who, after the first two weeks on the program, is 
experiencing average weekly weight loss that exceeds two percent (2%) 
of said participant's initial body weight, or three pounds, whichever 
is less, for at least two consecutive weeks, or (2) in writing to all 
participants when they enter the program, that failure to follow the 
program protocol and eat all of the food recommended may involve the 
risk of developing serious health complications.
    L. Representing, directly or by implication, that any weight loss 
program is supervised or monitored by health care professionals, unless 
such is the case, or otherwise misrepresenting, directly or by 
implication, the extent to which any weight loss program is supervised 
or monitored by health care professionals.
    M. Misrepresenting, directly or by implication, the performance, 
efficacy, or safety of any weight loss program.

II

    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(s) that may affect compliance obligations arising out of 
this Order.

III

    It is further ordered that respondents Don K. Gearheart and Joyce 
A. Schuman shall promptly notify the Commission of the discontinuance 
of their present business or employment and of their affiliation with a 
new business or employment. In addition, for a period of three (3) 
years from the service date of this Order, the individual respondents 
shall promptly notify the Commission of each affiliation with a new 
business or employment whose activities relate to the advertising, 
promotion, offering for sale, or sale of any weight loss program. When 
so required under this paragraph, each such notice shall include the 
individual respondent's new business address and a statement of the 
nature of the business or employment in which the individual respondent 
is newly engaged, as well as a description of the individual 
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.

IV

    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 possessed and relied upon to substantiate any 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.

V

    It is further ordered that respondents shall distribute a copy of 
this Order to each of their officers, agents, representatives, 
independent contractors and employees who are involved in the 
preparation and placement of advertisements or promotional materials or 
in communication with customers or prospective customers or who have 
any responsibilities with respect to the subject matter of this Order; 
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 service 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.

File No. 922 3002.

    In the matter of Quick Weight Loss Centers, Inc. a Georgia 
corporation, and Don K. Gearheart, individually and as an officer of 
said corporation.

Agreement Containing Consent Order To Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Quick Weight Loss Centers, Inc., a 
Georgia corporation (``QWLC-Ga.''), and Don K. Gearheart, individually 
and as an officer of said corporation, and it now appearing that QWLC-
Ga., a corporation, and Don K. Gearheart, individually and as an 
officer of said corporation (hereinafter, collectively, ``proposed 
respondents'' or ``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 QWLC-Ga., by its duly authorized 
officers, Don K. Gearheart, and counsel for the Federal Trade 
Commission, that:
    1. Proposed respondent QWLC-Ga. is a corporation organized, 
existing and formerly doing business under and by virtue of the laws of 
the State of Georgia, with its offices and principal place of business 
located at 1401 Johnson Ferry Road, suite 276, Marietta, Georgia 30062.
    2. Proposed respondent Don Gearheart is an individual with his 
principal residence located at 9520 East Pinnacle Pear Road, 
Scottsdale, Arizona 85255.
    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;
    (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. 2.34 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' addresses 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

Definitions

    For the purposes of this Order, the following definitions shall 
apply:
    A. Competent and reliable scientific evidence shall mean those 
tests, analysis, research, studies, or other evidence based on the 
expertise of professionals in the relevant area, that have 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;
    b. Weight loss program shall mean any program designed to aid 
consumers in weight loss or weight maintenance;
    C. A broadcast medium shall mean any radio or television broadcast, 
cablecast, home video, or theatrical release;
    D. For any Order-required disclosure in print media to be made 
clearly and prominently, or in a clear and prominent manner, it must be 
given both in the same type style and in: (1) Twelve point type where 
the representation that triggers the disclosure is given in twelve 
point or larger type; or (2) the same type size as the representation 
that triggers the disclosure where that representation is given in a 
type size that is smaller than twelve point type. For any Order-
required disclosure given orally in a broadcast medium to be made 
``clearly and prominently,'' or in a ``clear and prominent manner,'' 
the disclosure must be given at the same volume and in the same cadence 
as the representation that triggers the disclosure;
    E. A short broadcast advertisement shall mean any advertisement of 
thirty seconds or less duration made in a broadcast medium.

I.

    It is ordered that respondents QWLC-Ga., a corporation, its 
successors and assigns, and its officers, and Don K. Gearheart, 
individually and as an officer 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 weight 
loss program, in or affecting commerce, as ``commerce'' is defined in 
the Federal Trade Commission Act, do forthwith cease and desist from:
    A. Making any representation, directly or by implication, about the 
success of participants on any weight loss program in achieving or 
maintaining weight loss or weight control unless, at the time of making 
any such representation, respondents possess and rely upon competent 
and reliable scientific evidence substantiating the representation, 
provided, further, that for any representation that:
    (1) Any weight loss achieved or maintained through the weight loss 
program is typical or representative of all or any subset of 
participants of respondents' program, said evidence shall, at a 
minimum, be based on a representative sample of:
    (a) All participants who have entered the program, where the 
representation relates to such persons; provided, however, that the 
required sample may exclude those participants who dropped out of the 
program within two weeks of their entrance, or who were unable to 
complete the program due to illness, pregnancy, or change of residence; 
or
    (b) All participants who have completed a particular phase of the 
program or the entire program, where the representation only relates to 
such persons;
    (2) Any weight loss is maintained long-term, said evidence shall, 
at a minimum, be based upon the experience of participants who were 
followed for a period of at least two years from their completion of 
the active maintenance phase of respondents' program or earlier 
termination, as applicable; and
    (3) Any weight loss is maintained permanently, said evidence shall, 
at a minimum, be based upon the experience of participants who were 
followed for a period of time after completing the program that is 
either:
    (a) Generally recognized by experts in the field of treating 
obesity as being of sufficient length for predicting that weight loss 
will be permanent, or
    (b) Demonstrated by competent and reliable survey evidence as being 
of sufficient duration to permit such a prediction.
    B. Representing, directly or by implication, except through 
endorsements or testimonials referred to in paragraph I.E. herein, that 
participants of any weight loss program have successfully maintained 
weight loss, unless respondents disclose, clearly and prominently, and 
in close proximity to such representation, the statement: ``For many 
dieters, weight loss is temporary''; provided, further, that 
respondents shall not represent, directly or by implication, that the 
above-quoted statement does not apply to dieters in respondents' weight 
loss program; provided, however, that a mere statement about the 
existence, design, or content of a maintenance program shall not, 
without more, be considered a representation that participants of any 
weight loss program have successfully maintained weight loss.
    C. Representing, directly or by implication, except through short 
broadcast advertisements referred to in paragraph I.D. herein, and 
except through endorsements or testimonials referred to in paragraph 
I.E. herein, that participants on any weight loss program have 
successfully maintained weight loss, unless respondents disclose, 
clearly and prominently, and in close proximity to such representation, 
the following information:
    (1) The average percentage of weight loss maintained by those 
participants;
    (2) The duration over which the weight loss was maintained, 
measured from the date that participants ended the active weight loss 
phase of the program, provided, further, that if any portion of the 
time period covered includes participation in a maintenance program(s) 
that follows active weight loss, such fact must also be disclosed; and
    (3) If the participant population referred to is not representative 
of the general participant population for respondents' programs:
    (a) The proportion of the total participant population in 
respondent's programs that those participants represent, expressed in 
terms of a percentage or actual numbers of participants, or
    (b) The statement: ``[Quick Weight Loss Centers] makes no claim 
that this [these] result[s] is [are] representative of all participants 
in the [Quick Weight Loss Centers] program.''

provided, further, that compliance with the obligations of this 
paragraph I.C. in no way relieves respondents of the requirement under 
paragraph I.A. of this Order to substantiate any representation about 
the success of participants on any weight loss program in maintaining 
weight loss.
    D. Representing, directly or by implication, in short broadcast 
advertisements, that participants of any weight loss program have 
successfully maintained weight loss, unless respondents:
    (1) Include, clearly and prominently, and in immediate conjunction 
with such representation, the statement: ``Check at our centers for 
details about our maintenance record'';
    (2) For a period of time beginning with the date of the first 
broadcast of any such advertisement and ending no sooner than thirty 
days after the last broadcast of such advertisement, comply with the 
following procedures upon the first presentation of any form asking for 
information from a potential client, but in any event before such 
person has entered into any agreement with respondents:
    (a) Give to each potential client a separate document entitled 
``Maintenance Information,'' which shall include all the information 
required by paragraph I.B. and subparagraphs I.C. (1)-(3) of this Order 
and shall be formatted in the exact type size and style as the example 
form below, and shall include the heading (Helvetica 14 point bold), 
lead-in (Times Roman 12 point), disclosures (Helvetica 14 point bold), 
acknowledgment language (Times Roman 12 point), and signature block 
therein; provided, further, that no information in addition to that 
required to be included in the document required by this subparagraph 
I.D. (2) shall be included therein;
Maintenance Information
    You may have seen our recent ad about maintenance success. Here's 
some additional information about our maintenance record.
    [Disclosure of maintenance statistics goes here __________. For 
many dieters, weight loss is temporary.
    I have read this notice.
----------------------------------------------------------------------
(Client Signature)       (Date)
    (b) Require each potential client to sign such document; and
    (c) Give each client a copy of such document; and
    (3) Retain in each client file a copy of the signed maintenance 
notice required by this paragraph; provided, further, that:
    (i) Compliance with the obligations of this paragraph I.D. in no 
way relieves respondents of the requirement under paragraph I.A. of 
this Order to substantiate any representation about the success of 
participants on any weight loss program in maintaining weight loss;
    (ii) Respondents must comply with both paragraph I.D. and paragraph 
I.C. of this Order if respondents include in any such short broadcast 
advertisement a representation about maintenance success that states a 
number or percentage, or uses descriptive terms that convey a 
quantitative measure such as ``most of our customers maintain their 
weight loss long-term'';

provided, however, that the provisions of paragraph I.D. shall not 
apply to endorsements or testimonials referred to in paragraph I.E. 
herein.
    E. Using any advertisement containing an endorsement or testimonial 
about weight loss success or weight loss maintenance success by a 
participant or participants of respondents' weight loss programs if the 
weight loss success or weight loss maintenance success depicted in the 
advertisement is not representative of what participants of 
respondents' weight loss programs generally achieve, unless respondents 
disclose, clearly and prominently, and in close proximity to the 
endorser's statement of his or her weight loss success or weight loss 
maintenance success:
    (1) What the generally expected success would be for QWLC-Ga. 
customers in losing weight or maintaining achieved weight loss; 
provided, however, that the generally expected success for QWLC-Ga. 
customers may exclude those customers who dropped out of the program 
within two weeks of their entrance, or who were unable to complete the 
program due to illness, pregnancy, or change of residence; or
    (2) One of the following statements:
    (a) ``You should not expect to experience these results.''
    (b) ``This result is not typical. You may not do as well.''
    (c) ``This result is not typical. You may be less successful.''
    (d) ``______'s success is not typical You may not do as well.''
    (e) ``______'s experience is not typical. You may achieve less.''
    (f) ``Results not typical.''
    (g) ``Results not typical of program participants.''

provided, further, that if the endorsements or testimonials covered by 
this paragraph are made in a broadcast medium, any disclosure required 
by this paragraph must be communicated in a clear and prominent manner, 
and in immediate conjunction with the representation that triggers the 
disclosure;

provided, however, that:
    (i) For endorsements or testimonials about weight loss success, 
respondents can satisfy the requirements of subparagraph I.E. (1) by 
accurately disclosing the generally expected success in the following 
phrase: ``Quick Weight Loss Centers, Inc. participants lose an average 
of ____ pounds over an average ____-week treatment period''; and
    (ii) If the weight loss success or weight loss maintenance success 
depicted in the advertisement is representative of what participants of 
a group or subset clearly defined in the advertisement generally 
achieve, then, in lieu of the disclosures required in either 
subparagraphs I.E. (1) or (2) herein, respondents may substitute a 
clear and prominent disclosure of the percentage of all of respondents' 
customers that the group or subset defined in the advertisement 
represents.
    F. Representing, directly or by implication, that the price at 
which any weight loss program can be purchased is the only cost 
associated with losing weight on that program, unless such is the case.
    G. Representing, directly or by implication, the price at which any 
weight loss program can be purchased, unless respondents disclose, 
clearly and prominently, either:
    (1) In close proximity to such representation, the existence and 
amount of all mandatory fees associated with the program offered; or
    (2) In immediate conjunction with such representation, one of the 
following statements:
    (a) ``Plus the cost of [list of products or services that 
participants must purchase at additional cost]''; or
    (b) ``Purchase of [list of products or services that participants 
must purchase at additional cost] required'';

provided, further, that in broadcast media, if the representation that 
triggers any disclosure required by this paragraph is oral, the 
required disclosure must also be made orally.
    H. Failing to disclose over the telephone, for a period beginning 
with the date of any advertisement of the price at which any weight 
loss program can be purchased and ending no sooner than 180 days after 
the last dissemination of such advertisement, to consumers who inquire 
about the cost of any weight loss program, or are told about the cost 
of any weight loss program, the existence and amount of any and all 
mandatory costs or fees associated with participation in the program; 
provided, however, that respondents may satisfy this requirement by 
directing their weight loss centers to disclose the information, by 
providing the center personnel with suggested language to be used when 
responding to phone inquiries and by making their best efforts to 
ensure compliance with their directive to disclose price information 
over the telephone.
    I. Representing, directly or by implication, that prospective 
participants in respondents' weight loss programs will reach a 
specified weight within a specified time period, unless at the time of 
making such representation, respondents possess and rely upon competent 
and reliable scientific evidence substantiating the representation.
    J. Representing, directly or by implication, the average or typical 
rate or speed at which any participant on any weight loss program has 
lost or will lose weight, unless at the time of making any such 
representation, respondents possess and rely upon competent and 
reliable scientific evidence that substantiates the representation.
    K. Failing to disclose, clearly and prominently, either (1) to each 
participant who, after the first two weeks on the program, is 
experiencing average weekly weight loss that exceeds two percent (2%) 
of said participant's initial body weight, or three pounds, whichever 
is less, for at least two consecutive weeks, or (2) in writing to all 
participants when they enter the program, that failure to follow the 
program protocol and eat all of the food recommended may involve the 
risk of developing serious health complications.
    L. Misrepresenting, directly or by implication, the performance, 
efficacy, or safety of any weight loss program.

II

    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 on the emergency of a successor corporation(s), the 
creation or dissolution of subsidiaries, or any other change in the 
corporation(s) that may affect compliance obligations arising out of 
this Order.

III

    It is further ordered that respondent Don K. Gearheart shall 
promptly notify the commission of the discontinuance of his present 
business or employment and of this affiliation with a new business or 
employment. In addition, for a period of three (3) years from the 
service date of this Order, the individual respondent shall promptly 
notify the Commission of each affiliation with a new business or 
employment whose activities relate to the advertising, promotion, 
offering for sale, or sale of any weight loss program. When so required 
under this paragraph, each such notice shall include the individual 
respondent's new business address and a statement of the nature of the 
business or employment in which the individual respondent is newly 
engaged, as well as a description of the individual 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.

IV

    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 possessed and relied upon to substantiate any 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.

V

    It is further ordered that respondents shall distribute a copy of 
this Order to each of their officers, agents, representatives, 
independent contractors and employees who are involved in the 
preparation and placement of advertisements or promotional materials or 
in communication with customers or prospective customers or who have 
any responsibilities with respect to the subject matter of this Order; 
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.
    It is further ordered that respondents shall, within sixty (60) 
days after the date of service 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 for comment three 
separate proposed consent orders with the following: (1) Doctors 
Medical Weight Loss Centers, Inc. (``DMWLC''), Doctors Weight Loss 
Centers, Inc. (``DWLC''), and Joyce A. Schuman (``Schuman''); (2) Quick 
Weight Loss Centers, Inc., a Georgia corporation (``QWLC-Ga.''), and 
Don K. Gearheart (``Gearheart''); and (3) Quick Weight Loss Centers, 
Inc., a Texas corporation (``QWLC-Tex.''), Gearheart, and Schuman. 
Under the direction and control of Gearheart and Schuman, the companies 
marketed similar low-calorie diet programs through weight loss centers 
in Florida, Georgia, and Texas, and used substantially similar 
advertisements and promotional materials to do so.
    The Commission has placed the proposed orders on the public record 
for sixty days for comment by interested persons. Comments received 
during this period will become part of the public record. After sixty 
days, the Commission will again review the three agreements and decide 
whether it should withdraw from, or make final, any or all of the 
proposed orders.
    The Commission's three complaints charge that all of the proposed 
respondents deceptively promoted the efficacy and price of their diet 
programs, the rate at which their customers lose weight, and used 
deceptive monitoring practices. The complaint against QWLC-Tex., 
Gearheart, and Schuman also charges that they deceptively promoted the 
qualifications of, and supervision offered by, their staff.

Efficacy

    The Commission's three complaints first charge that all of the 
proposed respondents failed to substantiate claims that their customers 
typically are successful in reaching and maintaining their goal weight.
    The agreed-to orders seek to address these charges in several ways. 
First, the proposed orders simply prohibit representations about the 
success of customers in achieving or maintaining weight loss, unless 
proposed respondents have and rely upon competent and reliable 
scientific evidence to substantiate the representations. (I.A.) For 
representations that any weight loss achieved or maintained through 
weight loss programs is typical or representative of all, or any 
subset, of customers, the required ``competent and reliable scientific 
evidence'' must be based upon a sample of (1) all customers who entered 
the diet programs, where the representation relates to such customers, 
or (2) all customers who completed a particular phase of a diet 
program, or the entire program, where the representation relates only 
to such customers. (I.A. (1)) for representations that any weight loss 
is maintained long-term, the supporting evidence must be based upon the 
experience of customers who were followed for at least two years after 
they completed the maintenance phase of the diet programs (or earlier 
termination, as applicable). (I.A. (2)) For representations that any 
weight loss is maintained permanently, the required evidence must be 
based upon the experience of customers who were followed for a period 
of time that is either (1) generally recognized by experts in the field 
of treating obesity as being of sufficient length to predict that 
weight loss will be maintained permanently, or (2) demonstrated by 
competent and reliable survey evidence as being of sufficient length to 
permit such a prediction. (I.A. (3))
    The proposed orders also prohibit proposed respondents from 
representing that customers of any weight loss program have 
successfully maintained weight loss, unless they also disclose that 
``for many dieters, weight loss is temporary'' (I.B), as well as the 
following factual information: (1) The average percentage of weight 
loss maintained by those customers; (2) the duration over which the 
weight loss was maintained, measured from the date that customers ended 
the active weight loss phase of the program; and (3) if the customers 
referred to are not representative of the general customer population 
of respondents' programs, either (a) the proportion of the total 
customer population in respondents' programs that those customers 
represent, or (b) the statement that proposed respondents make no claim 
that the results are representative of all participants in their 
programs. (I.C)
    The proposed orders further prohibit representations, in broadcast 
advertisements of thirty seconds or less, that participants of any 
weight loss program have successfully maintained weight loss, unless 
proposed respondents also:
    (1) Include the statement: ``Check at our centers for details about 
our maintenance record'';
    (2) For a period of time beginning with the date of the first 
broadcast advertisement of any such advertisement and ending no sooner 
than thirty days after the last broadcast advertisement, comply with 
the following procedures for information from a potential client:
    (a) Give to each potential customer a separate document that 
includes the maintenance information disclosures discussed above;
    (b) Require each potential customer to sign this document; and
    (c) Give each customer a copy of the document, and retain a copy of 
the document (I.D.)
    When proposed respondents use advertisements containing the 
endorsement or testimonial of one of their customers about weight loss 
success or weight loss maintenance success, and the success depicted in 
the advertisement is not representative of what their customers 
generally achieve, the proposed orders also require proposed 
respondents to disclose what the generally expected success would be 
for customers of proposed respondents in losing weight or maintaining 
weight loss, or one of several alternative statements that disclaim the 
typicality of the success depicted. (I.E.)

Rate of Weight Loss

    The Commission's three complaints also charge that all of the 
proposed respondents claimed that an appreciable number of customers 
following their diet programs typically lose weight at an average rate 
of six or more pounds per week, when they did not have a reasonable 
basis for those claims. The Commission's complaints against (1) DMLWC/
DWLC and Schuman and (2) QWLC-Tex., Gearheart, and Schuman also charge 
that these proposed respondents claimed that customers following their 
diet programs typically lose weight at an average rate of thirty pounds 
in thirty days, or three to eight pounds per week, when they did not 
have a reasonable basis for doing so.
    To remedy these practices, the proposed orders prohibit 
representations that customers will reach a specified weight within a 
specified period of time, without having and relying upon competent and 
reliable scientific evidence to support those claims. (I.I.) The 
proposed orders also prohibit representations about the average or 
typical rate or speed at which customers have lost or will lose weight, 
without having and relying upon competent and reliable scientific 
evidence to support those claims. (I.J.)

Price

    The complaints further allege that proposed respondents falsely 
claimed that the prices they advertised for their diet programs were 
the only costs associated with losing weight on their diet programs, 
and that their failure in such advertisements to disclose the existence 
and amount of all mandatory expenses was a deceptive practice.
    The proposed orders seek to remedy these charges in several ways. 
First, the proposed orders prohibit untrue claims that any price is the 
only the cost associated with losing weight on their diet programs. 
(I.F.) Second, when representing the price of their diet programs, the 
proposed orders also require proposed respondents either (1) to 
disclose the existence and amount of all mandatory fees associated with 
the advertised diet programs, or (2) to state in one of two ways that 
customers are required to purchase additional products or services. 
(I.G.) Finally, the proposed orders require telephone disclosures to 
all prospective customers who ask, or are otherwise told about, the 
price of their weight loss programs, about the existence and amount of 
all mandatory fees. (I.H.)

Monitoring Practices

    The complaints also charge that proposed respondents engaged in 
deceptive monitoring practices. Proposed respondents instructed their 
customers to check in with the weight loss centers three to six times 
per week so that proposed respondents could monitor the weight loss 
progress of their customers. Sometimes, when the customers checked in, 
they presented the proposed respondents with weight loss results 
indicating that they may not have been consuming all of the food 
recommended by proposed respondents. The Commission's complaints charge 
that proposed respondents' failure to disclose that this conduct could 
result in serious health complications was a deceptive practice.
    The proposed orders seek to remedy this practice by requiring 
proposed respondents to disclose that failure to eat all of the food 
recommended may involve developing serious health complications. The 
proposed orders require proposed respondents to make this disclosure 
either (1) to all customers in writing when they start the weight loss 
program, or (2) to those customers who, after their first two weeks on 
the diet program, average a weekly weight loss that exceeds 2% of their 
initial body weight, or three pounds, whichever is less, for two 
consecutive weeks. (I.K.)

Medical Supervision

    Finally, the Commission's complaint against QWLC-Tex., Gearhart, 
and Schuman charges that these proposed respondents falsely claimed 
that customers who participated in their diet programs were monitored 
by health professionals.
    The proposed order addresses this allegation by prohibiting untrue 
representations that any weight loss program is supervised or monitored 
by health care professionals, or other misrepresentations about the 
extent to which any weight loss program is supervised or monitored by 
health care professionals. (I.L.)
    The purpose of this analysis is to facilitate public comment on the 
three proposed orders. This analysis is not intended to constitute an 
official interpretation of any of the agreements and proposed orders, 
or to modify in any way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 94-13286 Filed 6-1-94; 8:45 am]
BILLING CODE 6750-01-M