[Federal Register Volume 60, Number 20 (Tuesday, January 31, 1995)]
[Notices]
[Pages 5932-5935]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2308]



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FEDERAL TRADE COMMISSION
[File No. 932 3343]


Ninzu, 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 
require, among other things, the Maryland-based marketers to possess 
and rely upon competent and reliable scientific substantiating evidence 
to support any performance, benefits, efficacy, or safety claims they 
make for any weight loss or weight control product or program or any 
acupressure device they market in the future.

dates: Comments must be received on or before April 3, 1995.

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: Brian Dahl, FTC/S-4002, Washington, DC 
20580. (202) 326-3182.

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 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 Section 4.9(b)(6)(ii) of the Commission's Rules of 
Practice (16 CFR 4.9(b)(6)(ii)).

United States of America Before Federal Trade Commission

    In the matter of Ninzu, Inc., Davish Merchandising, Inc., Order 
By Phone, Inc., corporations, and Michael B. Metzger, individually 
and as an officer and director of said corporations, File No. 932 
3343.

Agreement containing Consent Order to Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Ninzu, Inc., Davish Merchandising, Inc. 
d/b/a Davish Enterprises and Davish Health Products, and Order By 
Phone, Inc. d/ [[Page 5933]] b/a Auricle Clip, Inc., corporations; and 
Michael B. Metzger, individually and as an officer and director of said 
corporations, hereinafter sometimes referred to as proposed 
respondents, and it now is 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 Ninzu, Inc., Davish 
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health 
Products, and Order By Phone, Inc. d/b/a Auricle Clip, Inc., by their 
duly authorized officer; and Michael B. Metzger, individually and as an 
officer and director of said corporations, and counsel for the Federal 
Trade Commission that:
    1. Proposed respondent Ninzu, Inc. is a corporation organized, 
existing and doing business under and by virtue of the laws of the 
State of Maryland, with its office and principal place of business 
located at 1 East Chase Street, Suite 200, in the City of Baltimore, 
State of Maryland.
    Proposed respondent Davish Merchandising, Inc. is a corporation 
organized, existing and doing business under and by virtue of the laws 
of the State of Maryland, with its office and principal place of 
business located at 1 East Chase Street, Suite 200, in the City of 
Baltimore, State of Maryland.
    Proposed respondent Order By Phone, Inc. is a corporation 
organized, existing and doing business under and by virtue of the laws 
of the State of Maryland, with its office and principal place of 
business located at 1 East Chase Street, Suite 200, in the City of 
Baltimore, State of Maryland.
    Proposed respondent Michael B. Metzger is an officer and director 
of said corporations. He formulates, directs and controls the policies, 
acts and practices of said corporations. He resides at 12135 Heneson 
Garth, Owings Mills, Maryland.
    2. Proposed respondents admit all the jurisdictional facts set 
forth in the draft of complaint.
    3. 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.
    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 draft of 
complaint contemplated thereby, 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.
    5. The 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.
    6. The 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 draft of complaint and its decision containing the 
following order to cease and desist in disposition of the proceeding 
and (2) 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 might 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 in the agreement may be 
used to vary or contradict the terms of the order.
    7. Proposed respondents have read the proposed complaint and order 
contemplated hereby. They 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

    For the purposes of this Order:
    1. ``Competent and reliable scientific evidence'' shall mean 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 personal qualified to do so, using 
procedures generally accepted in the profession to yield accurate and 
reliable results.
    2. ``Acupressure device'' shall mean any product, program, or 
service that is intended to function by means of the principles of 
acupressure.

I

    It Is Ordered that respondents, Ninzu, Inc., Davish Merchandising, 
Inc. d/b/a Davish Enterprises and Davish Health Products, and Order By 
Phone, Inc. d/b/a Auricle Clip, Inc., corporations, their successors 
and assigns, and their officers; Michael B. Metzger, individually and 
as an officer and director of said corporations; and respondents' 
agents, representatives and employees, directly or through any 
partnership, corporation, subsidiary, division or other device, in 
connection with the advertising, packaging, labeling, promotion, 
offering for sale, sale or distribution of the Ninzu, Auricle Clip, B-
Trim or any other acupressure device in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, do 
forthwith cease and desist from representing, in any manner, directly 
or by implication, that
    A. Such product causes significant weight loss;
    B. Such product causes significant weight loss without the need to 
diet or exercise;
    C. Such product controls appetite, eliminates a person's craving 
for food, or causes weight loss without the user feeling hungry; or
    D. Such product is scientifically proven to cause significant 
weight loss and control appetite.

II

    It Is Further Ordered that respondents, Ninzu, Inc., Davish 
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health 
Products, and Order By Phone, Inc. d/b/a Auricle Clip, Inc., 
corporations, their successors and assigns, and their officers; Michael 
B. Metzger, individually and as an officer and director of said 
corporations; and respondents' agents, representatives and employees, 
directly or through any partnership, corporation, subsidiary, division 
or other device, in connection [[Page 5934]] with the advertising, 
packaging, labeling, promotion, offering for sale, sale or distribution 
of any weight-loss or weight-control product or program or any 
acupressure device in or affecting commerce, as ``commerce'' is defined 
in the Federal Trade Commission Act, do forthwith cease and desist from 
making any representation, directly or by implication, regarding the 
performance, benefits, efficacy, or safety of such product, program, or 
device unless such representation is true and unless, at the time of 
making such representation, respondent possess and rely upon competent 
and reliable scientific evidence that substantiates the representation.

III

    It Is Further Ordered that respondents, Ninzu, Inc., Davish 
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health Products 
and Order By Phone, Inc. d/b/a Auricle Clip, Inc., corporations, their 
successors and assigns, and their officers; Michael B. Metzger, 
individually and as an officer and director of said corporations; and 
respondents' agents, representatives and employees, directly or through 
any partnership, corporation, subsidiary, division or other device, in 
connection with the advertising, packaging, labeling, promotion, 
offering for sale, sale or distribution of any weight-loss or weight-
control product or program or any acupressure device in or affecting 
commerce, as ``commerce'' is defined in the Federal Trade Commission 
Act, do forthwith cease and desist from representing, directly or by 
implication, that any endorsement (as ``endorsement'' is defined in 16 
C.F.R. Sec. 255.0(b) of the product, program, or device represents the 
typical of ordinary experience of members of the public who use the 
product, program, or device unless this is the case.

IV

    It Is Further Ordered that respondents, Ninzu, Inc., Davish 
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health 
Products, and Order By Phone, Inc. d/b/a Auricle Clip, Inc., 
corporations, their successors and assigns, and their officers; Michael 
B. Metzger, individually and as an officer and director of said 
corporations; and respondents' agents, representatives and employees, 
directly or through any partnership, corporation, subsidiary, division 
or other device, in connection with the advertising, packaging, 
labeling, promotion, offering for sale, sale or distribution of any 
weight-loss or weight-control product or program or any acupressure 
device in or affecting commerce, as ``commerce'' is defined in the 
Federal Trade Commission Act, do forthwith cease and desist from 
misrepresenting, in any manner, directly or by implication, the 
contents, validity, results, conclusions, or interpretations of any 
test or study.

V

    It Is Further Ordered that for five (5) 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 or its staff 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.

VI

    It Is Further Ordered that respondents, Ninzu, Inc., Davish 
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health 
Products, and Order By Phone, Inc. d/b/a Auricle Clip, Inc. shall:
    A. Within thirty (30) days after service of this Order, provide a 
copy of this Order to each of respondents' current principals, 
officers, directors and managers, and to all personnel, agents, and 
representatives having sales, advertising, or policy responsibility 
with respect to the subject matter of this Order; and
    B. For a period of five (5) years from the date of issuance of this 
Order, provide a copy of this Order to each of respondents' future 
principals, officers, directors, and managers, and to all personnel, 
agents, and representatives having sales, advertising, or policy 
responsibility with respect to the subject matter of this Order who are 
associated with respondents or any subsidiary, successor, or assign, 
within three (3) days after the person assumes his or her position.

VII

    It Is Further Ordered that respondents, Ninzu, Inc., Davish 
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health 
Products, and Order by Phone, Inc. d/b/a Auricle Clip, Inc., shall 
notify the Federal Trade Commission at least thirty (30) days prior to 
any proposed change in their corporate structures, including but not 
limited to dissolution, assignment, or sale resulting in the emergence 
of a successor corporation, the creation or dissolution of subsidiaries 
or affiliates, the planned filing of a bankruptcy petition, or any 
other corporate change that may affect compliance obligations arising 
out of this Order.

VIII

    It Is Further Ordered that respondent, Michael B. Metzger, shall, 
for a period of five (5) years from the date of issuance of this Order, 
notify the Commission within thirty (30) days of the discontinuance of 
his present business or employment and of his affiliation with any new 
business or employment. Each notice of affiliation with any new 
business or employment shall include respondent's new business address 
and telephone number, current home address, and a statement describing 
the nature of the business or employment and his duties and 
responsibilities.

IX

    It Is Further Ordered that respondents, Ninzu, Inc., Davish 
Merchandising, Inc. d/b/a Davish Enterprises and Davish Health 
Products, and Order by Phone, Inc. d/b/a Auricle Clip, Inc., 
corporations, and Michael B. Metzger, individually and as an officer 
and director of said corporations, shall, within sixty (60) days after 
service of this Order, and at such other times as the Federal Trade 
Commission may require, 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, subject to 
final approval, to a proposed consent order from proposed respondents 
Ninzu, Inc. d/b/a Davish Enterprises and Davish Health Products, Davish 
Merchandising, Inc., Order By Phone, Inc. d/b/a Auricle Clip, Inc., and 
Michael B. Metzger.
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement and take other appropriate action or make 
final the agreement's proposed order.
    This matter concerns advertising related to the sale of an 
acupressure device, marketed under the names Ninzu, Auricle Clip, and 
B-Trim, which [[Page 5935]] clips onto the ear. The Commission's 
Complaint charges that proposed respondents Ninzu, Inc. d/b/a Davish 
Enterprises and Davish Health Products, Davish Merchandising, Inc., 
Order By Phone, Inc. d/b/a Auricle Clip, Inc., and Michael B. Metzger 
falsely represented that: (1) The Ninzu, the Auricle Clip, and the B-
Trim cause significant weight loss; (2) the Ninzu causes significant 
weight loss without the need to diet or exercise; (3) the Auricle Clip 
causes significant weight loss without the need to diet; (4) the Ninzu 
controls appetite and eliminates a person's craving for food; (5) the 
Auricle Clip controls appetite; and (6) the B-Trim reduces the user's 
craving for food and causes weight loss without the user feeling 
hungry.
    The Complaint also alleges that proposed respondents falsely and 
misleadingly represented that they possessed and relied upon a 
reasonable basis when they made those claims. The Complaint further 
alleges that proposed respondents falsely represented that the Ninzu 
and Auricle Clip are scientifically proven to cause significant weight 
loss and control appetite. Finally, the Complaint alleges that proposed 
respondents falsely represented that testimonials from consumers 
appearing in advertisements for the Ninzu reflect the typical or 
ordinary experience of members of the public who have used the Ninzu.
    The proposed consent order contains provisions designed to remedy 
the violations charged and to prevent the proposed respondents from 
engaging in similar acts in the future.
    Part I of the proposed order prohibits proposed respondents from 
representing that the Ninzu, Auricle Clip, B-Trim, or any other 
acupressure device: (1) Causes significant weight loss; (2) causes 
significant weight loss without the need to diet or exercise; (3) 
controls appetite, eliminates a person's craving for food, or causes 
weight loss without the user feeling hungry; or (4) is scientifically 
proven to cause significant weight loss and control appetite. The order 
defines ``acupressure device'' as ``any product, program, or service 
that is intended to function by means of the principles of 
acupressure.'' Part II requires proposed respondents to possess 
competent and reliable scientific evidence before making 
representations regarding the performance, benefits, efficacy, or 
safety of any weight-loss or weight-control product or program or any 
acupressure device. Part III prohibits proposed respondents from 
falsely claiming that endorsements or testimonials for any weight-loss 
or weight-control product or program or any acupressure device 
represent the typical or ordinary experience of members of the public 
who use the product, program, or device. Part IV prohibits proposed 
respondents from misrepresenting the results of tests or studies for 
any weight-loss or weight-control product or program or any acupressure 
device.
    Part V requires proposed respondents to maintain, for five (5) 
years, all materials that support, contradict, qualify, or call into 
question any representations they make which are covered by the 
proposed order. Part VI requires proposed respondents Ninzu, Inc. d/b/a 
Davish Enterprises and Davish Health Products, Davish Merchandising, 
Inc., and Order By Phone, Inc. d/b/a Auricle Clip, Inc. to distribute a 
copy of the order to current and future principles, officers, 
directors, and managers, as well as to any employees having sales, 
advertising, or policy responsibility with respect to the subject 
matter of the order. Under Part VII of the proposed order, proposed 
respondents Ninzu, Inc. d/b/a Davish Enterprises and Davish Health 
Products, Davish Merchandising, Inc., and Order By Phone, Inc. d/b/a 
Auricle Clip, Inc. shall notify the Federal Trade Commission at least 
thirty (30) days prior to any proposed change in their corporate 
structures that may affect compliance with the order's obligations. 
Part VIII requires that proposed respondent Metzger, for a period of 
five (5) years, notify the Commission of any change in his business or 
employment. Part IX obliges proposed respondents to file compliance 
reports with the Commission.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not to constitute an official interpretation 
of the agreement and proposed order or to modify in any way their 
terms.
Donald S. Clark,
Secretary.
[FR Doc. 95-2308 Filed 1-30-95; 8:45 am]
BILLING CODE 6750-01-M