[Federal Register Volume 59, Number 230 (Thursday, December 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29575]


[[Page Unknown]]

[Federal Register: December 1, 1994]


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FEDERAL TRADE COMMISSION
[File No. 942 3100]

 

IHI Clinics, Inc., et al.; Proposed Consent Agreement With 
Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, a Georgia corporation and two officers 
from misrepresenting the performance, success or efficiency of their 
smoking cessation or weight loss and maintenance seminars, or any such 
program, and from representing that the U.S. Government has rated their 
single session group hypnosis seminar as the more effective method of 
weight loss or smoking cessation, unless the respondents possess and 
rely upon competent and reliable scientific evidence to substantiate 
such representations. In addition, the consent agreement would prohibit 
the respondents from misrepresenting any tests, studies, surveys, 
reports or testimonials.

DATES: Comments must be received on or before January 30, 1995.

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

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

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

    In the matter of IHI Clinics, Inc., a corporation, Gordon Brick, 
individually and as an officer of said corporation, and Larry Brick, 
individually and as a former 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 IHI Clinics, Inc. (``IHIC''), a 
corporation, Gordon Brick, individually and as an officer of said 
corporation, and Larry Brick, individually and as an officer of said 
corporation (``proposed respondents''), and it is now appearing that 
proposed respondents are willing to enter into an agreement containing 
an order to cease and desist from the use of the acts and practices 
being investigated,
    It is hereby agreed by and between IHI Clinics, Inc., Gordon Brick, 
individually and as an officer of said corporation, and Larry Brick, 
individually and as a former officer of said corporation, and counsel 
for the Federal Trade Commission that:
    1. Proposed respondent IHIC is a Georgia corporation, with its 
principal office and place of business at 1962 Carthage Road, Tucker, 
Georgia, 30084.
    2. Proposed respondent Gordon Brick is the President and Chief 
Executive Officer of said corporation. He formulates, directs and 
controls the acts and practices of said corporation. Proposed 
respondent Larry Brick is the former President of said corporation. 
Together with Gordon Brick, he formulated, directed, and controlled the 
acts and practices of said corporation. Their address is the same as 
that of said corporation.
    3. Proposed respondents admit all the jurisdictional facts set 
forth in the draft complaint.
    4. Proposed respondents waive:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law; and
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    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 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 the complaint.
    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 the proposed 
respondents: (a) issue its complaint corresponding in form and 
substance with the draft complaint and its decision containing the 
following Order to cease and desist in disposition of the proceeding; 
and (b) make information public in respect thereto. When so entered, 
the Order to cease and desist shall have the same force and effect and 
may be altered, modified or set aside in the same manner and within the 
same time provided by statute for other orders. The Order shall become 
final upon service. Delivery by the U.S. Postal Service of the 
complaint and decision containing the agreed-to Order to proposed 
respondents' address as stated in this agreement shall constitute 
service. Proposed respondents waive any right they may have to any 
other manner of service. The complaint may be used in construing the 
terms of the Order, and no agreement, understanding, representation, or 
interpretation not contained in the Order may be used to vary or 
contradict the terms of the Order.
    8. Proposed respondents have read the draft complaint and the 
following Order. Proposed respondents understand that once the Order 
has been issued, they will be required to file one or more compliance 
reports showing that they have fully complied with the Order. Proposed 
respondents further understand that they may be liable for civil 
penalties in the amount provided by law for each violation of the Order 
after it becomes final.

Order

Definition

    For the purposes of this Order, ``competent and reliable scientific 
evidence'' shall mean those tests, analyses, research, studies, or 
other evidence based on the expertise of professionals in the relevant 
area, that has been conducted and evaluated in an objective manner by 
persons qualified to do so, using procedures generally accepted in the 
profession to yield accurate and reliable results. Survey evidence may 
be appropriate depending on the representation made.
I
    It is ordered that respondents IHI Clinics, Inc., a corporation, 
its successors and assigns, and its officers, Gordon Brick, 
individually and as an officer of said corporation, and Larry Brick, 
individually and as a former 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 
smoking cessation or weight loss program, including any such program 
that uses hypnosis, in or affecting commerce, as ``commerce'' is 
defined in the Federal Trade Commission Act, do forthwith cease and 
desist from:
    A. Representing, directly or by implication, that ninety-five 
percent or more of the participants who attend respondents' smoking 
cessation seminars permanently abstain from smoking after attending 
those seminars, unless such is the case.
    B. Representing, directly or by implication, that the United States 
Government has rated the single-session, group hypnosis seminar used by 
respondents as the best way to stop smoking.
    C. Representing, directly or by implication, that participants who 
attend respondents' single-session group hypnosis seminar are cured of 
smoking addiction without experiencing craving, stress, weight gain, or 
other side effects, unless, at the time of making any such 
representation, respondents possess and rely upon competent and 
reliable scientific evidence substantiating the representation.
    D. Making any representation, directly or by implication, about the 
relative or absolute performance or efficacy of any smoking cessation 
program or weight loss program, unless, at the time of making any such 
representation, respondents possess and rely upon competent and 
reliable scientific evidence substantiating the representation.
    E. Representing through any endorsement or testimonial that any 
participant(s) of respondents' smoking cessation program or weight loss 
program have achieved success in smoking abstinence or weight loss 
unless:
    (1) At the time of making such representation, the success claimed 
is representative of the typical or ordinary experience of all 
participants of such program, and respondents possess and rely upon 
competent and reliable scientific evidence that substantiates such 
representation, or
    (2) Respondents disclose, clearly and prominently, and in close 
proximity to the endorsement or testimonial, either:
    (a) What the generally expected results would be for participants 
in such program, or
    (b) The limited applicability of the endorser's experience to what 
consumers may generally expect to achieve, that is, that consumers 
should not expect to experience similar results.
    F. Misrepresenting, directly or by implication, the existence, 
contents, validity, results, conclusions, or interpretations of any 
test, study, survey or report.
    G. Misrepresenting, directly or by implication, the performance or 
efficacy of any smoking cessation program or weight loss program.
II
    It is further ordered that for three (3) years after the last date 
of dissemination of any representation covered by this Order, 
respondents, or their successors and assigns, shall maintain and upon 
request make available to the Federal Trade Commission for inspection 
and copying:
    A. All materials that were relied upon in disseminating such 
representation; and
    B. All tests, reports, studies, surveys, demonstrations or other 
evidence in their possession or control that contradict, qualify, or 
call into question such representation, or the basis relied upon for 
such representation, including complaints from consumers.
III
    It is further ordered that respondents shall notify the Commission 
at least thirty (30) days prior to the effective date of any proposed 
change in the corporate respondent such as dissolution, assignment, or 
sale resulting in the emergency of a successor corporation(s), the 
creation or dissolution of subsidiaries, or any other change in the 
corporation that may affect compliance obligations arising out of this 
Order.
IV
    It is further ordered that the individual respondents named herein 
shall promptly notify the Commission of the discontinuance of their 
present business or of their affiliation with the corporate respondent. 
In addition, for a period of three (3) years from the date of service 
of this Order, each respondent shall promptly notify the Commission of 
each affiliation with a new business or employment that involves a 
smoking cessation program or a weight loss program. Each such notice 
shall include the respondent's new business address and a statement of 
the nature of the business or employment in which the respondent is 
newly engaged as well as a description of the respondent's duties and 
responsibilities in connection with the business or employment.
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; 
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.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from IHI Clinics, Inc. (hereinafter ``IHIC''), 
its Chief Executive Officer and President, Gordon Brick, and its former 
President, Larry Brick, marketers of The IHI Clinic Method seminar, a 
single, three-hour, group hypnosis session program for smoking 
cessation and weight loss. The IHI Clinic Method seminar is offered to 
the public nationwide by Larry Brick at hotel locales.
    The proposed consent order has been placed on the public record for 
sixty (60) days for the reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After 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 respondents 
deceptively advertised: (1) The likelihood of seminar participants' 
success in achieving and maintaining abstinence from smoking cigarettes 
and weight loss; and (2) the effectiveness of proposed respondents' 
smoking cessation and weight-loss methods in leading consumers to 
achieve smoking abstinence, weight loss, and weight-loss maintenance 
compared to other stop-smoking and weight-loss methods.

Success

    The complaint against IHIC, Gordon Brick and Larry Brick alleges 
that the proposed respondents made false claims and failed to possess a 
reasonable basis for other claims they made regarding the success of 
their seminar participants in quitting smoking and achieving and 
maintaining weight loss. Through advertisements placed in various media 
in advance of their seminars, proposed respondents represented that 95 
percent or more of their seminar participants permanently abstain from 
smoking after attending those seminars. The complaint alleges that this 
claim is false.
    Proposed respondents further represented through their 
advertisements that seminar participants: (1) Are cured of smoking 
addiction and permanently abstain from smoking cigarettes; (2) are 
cured of smoking addiction without experiencing craving, stress or 
weight gain; (3) achieve and maintain weight loss; and (4) achieve 
weight loss quickly. Finally, proposed respondents represented that 
thousands of seminar participants have permanently quit smoking as a 
result of attending the IHI Clinic Method seminar, and that various 
smoking cessation and weight-loss testimonials from seminar 
participants reflected the typical or ordinary experience of members of 
the public who have attended the IHI Clinic Method seminar.
    The Commission believes that these success claims for seminar 
attendees' smoking cessation, weight loss and maintenance of achieved 
weight loss are deceptive because proposed respondents at the time they 
made the claims did not possess adequate substantiation for those 
claims.
    The proposed consent order seeks to address the alleged success 
misrepresentations cited in the accompanying complaint in five ways. 
First, the order (Part I.D.) requires proposed respondents to possess a 
reasonable basis consisting of competent and reliable scientific 
evidence substantiating any claim about the performance or efficacy of 
any smoking cessation or weight loss program.
    Second, the proposed order (Part I.A.) prohibits proposed 
respondents from representing that 95 percent or more of their seminar 
attendees permanently abstain from smoking after those seminars, unless 
that is the case.
    Third, the proposed order (Part I.C.) prohibits proposed 
respondents from representing that seminar participants are cured of 
smoking addiction without experiencing side effects, such as craving, 
stress or weight gain, unless the claim is substantiated by competent 
and reliable scientific evidence.
    Fourth, the proposed order (Part I.E.) prohibits proposed 
respondents from representing through any endorsements that seminar 
participants have achieved success in smoking abstinence or weight loss 
unless the claimed success is representative of the typical or ordinary 
experience of all such participants, and competent and reliable 
scientific evidence substantiates that claim, or respondents clearly 
and prominently disclose either: (1) What the generally expected 
results would be for program participants, or (2) the limited 
applicability of the endorser's experience to what consumers may 
generally expect to achieve, that is, that consumers should not expect 
to achieve similar results.
    Finally, the proposed order (Part I.G.) generally prohibits 
proposed respondents from misrepresenting the performance or efficacy 
of any smoking cessation or weight loss program.

Efficacy

    The Commission's complaint further alleges that proposed 
respondents made false claims and failed to possess a reasonable basis 
for other claims they made regarding relative ability of their hypnosis 
program to lead consumers to quit smoking. IHIC, Gordon Brick, and 
Larry Brick represented through their advertising that the U.S. 
Government has rated the group hypnosis method used by respondents as 
the best way to stop smoking. The complaint alleges that this claim is 
false, because the U.S. Government has not so rated proposed 
respondents' hypnosis method.
    Proposed respondents further represented through their 
advertisements that their single-session, group hypnosis seminar is 
more efficacious for smoking cessation, weight loss and weight-loss 
maintenance than other smoking cessation and weight-loss methods. The 
Commission believes that these comparative efficacy claims for The IHI 
Clinic Method hypnosis program are deceptive because proposed 
respondents at the time they made the claims did not possess adequate 
substantiation for them.
    To address these efficacy misrepresentations, the proposed order 
(Part I.B.) prohibits IHIC, Gordon Brick and Larry Brick from 
representing that the U.S. Government has rated the group hypnosis 
method used by respondents as the best way to stop smoking. The 
proposed order (Part I.F.) further generally prohibits proposed 
respondents from misrepresenting the existence, contents, validity, 
results, conclusions, or interpretations of any test, study, survey, or 
report. Finally, the order (Part I.D.) requires proposed respondents to 
possess and rely upon competent and reliable scientific evidence 
substantiating any representation about the relative or absolute 
performance or efficacy of any smoking cessation or weight loss 
program, before they make such a claim.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order, or to modify in any 
way their terms.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 94-29575 Filed 12-1-94; 8:45 am]
BILLING CODE 6750-01-M