[Federal Register Volume 60, Number 99 (Tuesday, May 23, 1995)]
[Notices]
[Pages 27309-27314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12588]



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FEDERAL TRADE COMMISSION
[File No. 932-3234]


Original Marketing Inc.; 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, the Florida-based 
[[Page 27310]] corporation, two of its officers and an affiliated 
advertising agency from making performance or benefit claims for any 
weight-loss or weight-control product or program or acupressure device 
unless the claims are true and substantiated by competent and reliable 
scientific evidence. Also, the proposed consent agreement would 
prohibit the respondents from misrepresenting any endorsement or 
testimonial for any weight-loss or weight-control product or program or 
any acupressure device as representing the typical or ordinary 
experience of users. In addition, the individual respondents would be 
required to post a $300,000 performance bond, or to pay that amount 
into an escrow account, before marketing any weight-loss or weight-
control product or program or any acupressure device.

DATES: Comments must be received on or before July 24, 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:
Richard Cleland, FTC/S-4002, Washington, D.C. 20580, (202) 326-3088.

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)).

    In the matter of Original Marketing, Inc., d/b/a ACU-STOP 2000, 
and Franklin & Joseph, Inc., corporations, Barry A. Weiss, 
individually and as an officer and director of Original Marketing, 
Inc., and Roger Franklin, individually and as an officer and 
director of Original Marketing, Inc. and Franklin & Joseph, Inc., 
File No. 932-3234.

Agreement Containing Consent Order To Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Original Marketing, Inc. d/b/a Acu-Stop 
2000 (``OMI'') and Franklin & Joseph, Inc., corporations; Barry A. 
Weiss, individually and as an officer and director of Original 
Marketing, Inc.; and Roger Franklin, individually and as an officer and 
director of Original Marketing, Inc. and Franklin & Joseph, Inc., 
hereinafter sometimes referred to as proposed respondents, and it now 
appearing that proposed respondents are willing to enter into an 
agreement containing an order to cease and desist from the use of the 
acts and practices being investigated,
    It is hereby agreed by and between Original Marketing, Inc. d/b/a 
Acu-Stop 2000 and Franklin & Joseph, Inc., by their duly authorized 
officers; Barry A. Weiss, individually and as an officer and director 
of Original Marketing, Inc.; and Roger Franklin, individually and as an 
officer and director of Original Marketing, Inc. and Franklin & Joseph, 
Inc., and their attorney and counsel for the Federal Trade Commission 
that:
    1. Proposed respondent OMI is a corporation organized, existing and 
doing business under and by virtue of the laws of the State of Florida, 
with its office and principal place of business located at 11570 Wiles 
Road, in the City of Pompano Beach, State of Florida.
    Proposed respondent Franklin & Joseph, Inc. is a corporation 
organized, existing and doing business under and by virtue of the laws 
of the State of New York, with its office and principal place of 
business located at 237 Mamaroneck Avenue, in the City of White Plains, 
State of New York.
    Proposed respondent Barry A. Weiss is an officer and director of 
OMI. He formulates, directs and controls the policies, acts and 
practices of OMI. He resides at 22471 Vista Wood Way, Boca Raton, 
Florida.
    Proposed respondent Roger Franklin is an officer and director of 
OMI and Franklin & Joseph, Inc. He formulates, directs and controls the 
acts and practices of said corporations. He resides at 33 Maplemoor 
Lane, White Plains, New York.
    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. 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.
    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 
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: [[Page 27311]] 
    1. ``Component 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 persons 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, Original Marketing, Inc. and 
Franklin & Joseph, Inc., corporations, their successors and assigns, 
and their officers; Barry A. Weiss, individually and as an officer and 
director of Original Marketing, Inc.; Roger Franklin, individually and 
as an officer and director of Original Marketing, Inc. and Franklin & 
Joseph, Inc.; 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 
AcuStop 2000 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 or eliminates a person's craving 
for food; or
    D. Such product is scientifically proven to cause significant 
weight loss or control appetite.

II

    It is further ordered That respondents, Original Marketing, Inc. 
and Franklin & Joseph, Inc., corporations, their successors and 
assigns, and their officers; Barry A. Weiss, individually and as an 
officer and director of Original Marketing, Inc.; Roger Franklin, 
individually and as an officer and director of Original Marketing, Inc. 
and Franklin & Joseph, Inc.; 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 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, respondents possess 
and rely upon competent and reliable scientific evidence that 
substantiates the representation.

III

    It is further ordered That respondents, Original Marketing, Inc. 
and Franklin & Joseph, Inc., corporations, their successors and 
assigns, and their officers; Barry A. Weiss, individually and as an 
officer and director of Original Marketing, Inc.; Roger Franklin, 
individually and as an officer and director of Original Marketing, Inc. 
and Franklin & Joseph, Inc.; 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 or 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, Original Marketing, Inc. 
and Franklin & Joseph, Inc., corporations, their successors and 
assigns, and their officers; Barry A. Weiss, individually and as an 
officer and director of Original Marketing, Inc.; Roger Franklin, 
individually and as an officer and director of Original Marketing, Inc. 
and Franklin & Joseph, Inc.; 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 respondents, and their successors and 
assigns, are jointly and severally liable for, and shall pay refunds to 
eligible consumers of Acu-Stop 2000 as provided herein. ``Eligible 
consumer'' shall mean any person who purchases, or has purchased, an 
Acu-Stop 2000 from respondents; who returns, or has returned, the 
device to respondents requesting a refund prior to ninety (90) days 
after the date this Order becomes final; and who has not previously 
received a refund. ``Eligible consumer'' shall not include persons who 
request a credit from a credit card issuer and who do not otherwise 
request a credit or refund from respondents. Respondents shall provide 
to the Commission all information necessary to identify eligible 
consumers and to verify their eligibility.
    A. Not later than the date this Order becomes final, respondents 
shall deposit into an escrow account, to be established by the 
Commission for the purpose of receiving payments due under the 
provisions of this Order (``escrow account''), the sum of fifty 
thousand dollars ($50,000.00). These funds, together with accrued 
interest, less any amount necessary to pay the costs of administering 
the escrow account and refund program provided herein, shall be used by 
the Commission or its representative to pay refunds to those eligible 
consumers who purchased an Acu-Stop 2000 from respondents prior to 
January 1, 1995. Any funds remaining in the escrow account after all 
refunds to consumers under this subparagraph have been paid shall be 
paid to the United States Treasury.
    At any time after this Order becomes final, the Commission may 
direct the escrow agent to transfer funds from the escrow account, 
including accrued interest, to the Commission to be distributed as 
herein provided. Respondents shall be notified as to how the funds are 
distributed, but shall have no right to contest the manner of 
distribution chosen by the Commission. The Commission, or its 
representative, shall, in its sole discretion, select the escrow agent. 
Costs associated with the administration of the escrow account and 
refund program provided herein, if any, shall be paid from funds in the 
escrow account. [[Page 27312]] 
    Respondents relinquish all dominion, control and title to the funds 
paid into the escrow account, and all legal and equitable title to the 
funds shall vest in the Treasurer of the United States and in the 
designated consumers. Respondents shall make no claim to or demand for 
the return of the funds, directly or indirectly, through counsel or 
otherwise; and in the event of bankruptcy of respondents, respondents 
acknowledge that the funds are not part of the debtor's estate, nor 
does the estate have any claim or interest therein.
    B. Respondents shall pay from their own funds refunds to all 
eligible consumers who are not paid from the escrow account provided 
herein. This requirement shall include:
    (1) all refund requests from eligible consumers who purchased an 
Acu-Stop 2000 after January 1, 1995, and
    (2) all refund requests under subparagraph A that exceed the amount 
available in the escrow account.
    All refunds required in subparagraph B.1 shall be paid within 
thirty (30) days after the receipt of the request, or within thirty 
(30) days after the date this Order becomes final, whichever is later. 
All refunds required in subparagraph B.2 shall be paid within thirty 
(30) days after notification to respondents that the funds available in 
the escrow account to pay refunds have been depleted.
VI

    It is further ordered That for three (3) years after this Order 
becomes final, respondents, and their successors and assigns, shall 
maintain documents and records demonstrating the manner and form of 
respondents' compliance with Part V of this Order, and upon request 
make available to the Commission, at a place it designates for 
inspection and copying, copies of:
    A. All documents and records evidencing the refunds respondents 
paid, or charge card credits issued, to eligible consumers, as that 
term is defined in Part V;
    B. A list containing the name, mailing address, and purchase price 
for each eligible consumer who requested a refund;
    C. The name and last known address of each consumer who requested a 
refund but was refused and the reason for each refusal to refund; and
    D. Copies of all correspondence and other communications to, or 
from, any consumers regarding a refund.

VII

    It is further ordered the respondents Barry A. Weiss, Roger 
Franklin, and their agents, representatives, and employees, directly or 
through any partnership, corporation, subsidiary, division, joint 
venture or other device, do forthwith cease and desist from 
advertising, promoting, offering for sale, selling, or distributing any 
weight-loss or weight-control product or program or any acupressure 
device to the general public, unless, prior to advertising, promoting, 
offering for sale, selling, or distributing to the general public any 
such product, respondents Weiss and Franklin first obtain a performance 
bond in the principal sum of three hundred thousand dollars ($300,000). 
Said bond shall be conditioned upon compliance by respondents Weiss and 
Franklin with the provisions of the Federal Trade Commission Act, and 
with the provisions of this Order. The bond shall be deemed continuous 
and remain in full force and effect as long as respondents Weiss and 
Franklin continue to advertise, promote, offer for sale, sell, or 
distribute any weight-loss or weight-control product or program or any 
acupressure device, directly or indirectly, to the general public, and 
for at least five (5) years after they have ceased any such activity. 
The bond shall cite this Order as the subject matter of the bond and 
provide surety against respondents' failure to pay consumer redress or 
disgorgement as set forth herein. Such performance bond shall be an 
influence agreement providing surety issued by a surety company that is 
admitted to do business in a state in which respondents Weiss and 
Franklin are doing business and that holds a Federal Certificate of 
Authority as Acceptable Surety on Federal Bonding and Reinsuring.
    Respondents Weiss and Franklin shall provide a copy of such 
performance bond to the associate director of the Federal Trade 
Commission's Division of Enforcement, 6th Street & Pennsylvania Avenue, 
N.W., Washington, D.C. 20580, prior to the commencement of any business 
for which such bond is required.
    Provided, however, in lieu of a performance bond, respondents Weiss 
and Franklin may establish and fund, pursuant to the terms set forth 
herein, an escrow account in the principal sum of three hundred 
thousand dollars ($300,000) in cash, or such other assets of equivalent 
value, which the Commission, or its representative, in its sole 
discretion may approve. Respondents Weiss and Franklin shall maintain 
such amount in that account for as long as they continue to advertise, 
promote, offer for sale, sell, or distribute any weight-loss or weight-
control product or program or any acupressure device, directly or 
indirectly, to the general public, and for at least five (5) years 
after they have ceased any such activity. Respondents Weiss and 
Franklin shall pay all costs associated with the creation, funding, 
operation, and administration of the escrow account. The Commission, or 
its representative, shall, in its sole discretion, select the escrow 
agent. The escrow agreement shall be in substantially the form attached 
to this Order as Exhibit A.
    The performance bond or escrow agreement shall provide that the 
surety company or escrow agent, within thirty (30) days following 
receipt of notice that a final judgment or an order of the Commission 
against respondent Weiss and/or respondent Franklin for consumer 
redress or disgorgement in an action brought under the provisions of 
the Federal Trade Commission Act has been entered, or, in the case of 
an order of the Commission, has become final, finding that Weiss and/or 
Franklin has violated the terms of this Order or the Federal Trade 
Commission Act, and determining the amount of consumer redress or 
disgorgement to be paid, shall pay to the Commission so much of the 
performance bond or funds of the escrow account as does not exceed the 
amount of consumer redress or disgorgement ordered, and which remains 
unsatisfied at the time notice is provided to the surety company or 
escrow agent, provided that, if respondents have agreed to the entry of 
a court order or an order of the Commission, a specific finding that 
respondents violated the terms of this Order or the provisions of the 
Federal Trade Commission Act shall not be necessary. A copy of the 
notice provided for herein shall be mailed to respondent Weiss and/or 
respondent Franklin at their last known address.
    Respondents Weiss and Franklin may not disclose the existence of 
the performance bond or escrow account to any consumer, or other 
purchaser or prospective purchaser, to whom a covered product, program, 
or device is advertised, promoted, offered for sale, sold, or 
distributed, without also disclosing at the same time and in a like 
manner that the performance bond or escrow account is required by order 
of the Federal Trade Commission in settlement of changes that 
respondents engaged in false and misleading representations.

VIII

    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 [[Page 27313]] 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.

IX

    It is further ordered That respondents, Original Marketing, Inc. 
and Franklin & Joseph, 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.

X

    It is further ordered That respondents, Original Marketing, Inc. 
and Franklin & Joseph, 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.

XI

    It is further ordered That respondents, Barry A. Weiss and Roger 
Franklin, 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 
respondents' 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.

XII

    It is further ordered That respondents, Original Marketing, Inc. 
and Franklin & Joseph, Inc., corporations, their successors and 
assigns, and their officers; Barry A. Weiss, individually and as an 
officer and director of Original Marketing, Inc.; and Roger Franklin, 
individually and as an officer and director of Original Marketing, Inc. 
and Franklin & Joseph, Inc., 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.
Exhibit A

    This Escrow Agreement, made and entered into this ______ day of 
__________, ____, by and between __________________ (hereinafter 
``__________''); and the Federal Trade Commission, an agency of the 
Government of the United States of America, by and through 
________________ (hereinafter ``FTC''); and ____________________ 
(hereinafter ``Escrow Agent'');
Witnesseth:
    Whereas, the FTC and ____________ have entered into an Agreement 
Containing Consent Order to Cease and Desist (hereinafter ``Consent 
Order''), a copy of which is attached hereto as Exhibit A; and
    Whereas, the Consent Order requires that __________ cease and 
desist from advertising, promoting, offering for sale, selling, or 
distributing any weight-loss or weight-control product or program or 
any acupressure device to the general public unless ______ first 
establishes and maintains an escrow account, under the terms and 
conditions specified in the Consent Order;
    Now, Wherefore, in accordance with the terms of the Consent Order, 
which are incorporated herein by reference, the parties covenant and 
agree as follows:
    1. ________ shall establish an Escrow Account at 
__________________, to be styled __________ Escrow Account, 
________________, Escrow Agent. __________ shall deposit into the 
Escrow Account an initial sum of at least three hundred thousand 
dollars ($300,000.00) in cash, or other approved assets of equivalent 
value. Thereafter, __________ shall deposit such additional amounts 
into the Escrow Account as are necessary to maintain the total amount 
in the Escrow Account at three hundred thousand dollars ($300,000.00).
    2. The Escrow Agent shall be the sole signatory on the Escrow 
Account and access to the funds held in that account shall be solely 
through the Escrow Agent. It is understood by the parties to this 
Escrow Agreement that upon the signing of this Agreement, ____________ 
relinquishes to the Escrow Agent, all legal title to the escrow funds, 
except as to such amounts in the Escrow Account that are in excess of 
three hundred thousand dollars ($300,000.00). Until and unless the 
Escrow Account is terminated as provided for herein, ____________ 
agrees to make no claim to or demand for return of the funds, directly 
or indirectly, through counsel or otherwise; and, in the event of 
bankruptcy, ____________ acknowledges that the funds are not part of 
____________'s estate, nor does the estate have any claim or interest 
therein.
    3. The Escrow Agent and the parties hereto agree that the escrow 
funds shall be held only in accordance with the terms of the Consent 
Order and the Escrow Agreement. __________ shall pay all costs 
associated with the creation, funding, operation, and administration of 
the Escrow Account as they become due. In the event that ____________ 
fails to pay such costs as they become due, the Escrow Agent shall pay 
the costs from the interest earned on the escrow funds.
    4. The Escrow Agent, within thirty days following receipt of notice 
that a final judgment or an order of the Commission against 
____________ for consumer redress or disgorgement in an action brought 
under the provisions of the Federal Trade Commission Act has been 
entered, or, in the case of an order of the Commission, has become 
final, finding that ____ has violated the terms of the Consent Order or 
the provisions of the Federal Trade Commission Act, and determining the 
amount of consumer redress or disgorgement to be paid, which notice 
shall also be mailed to ____________ at his last known address, shall 
pay to the Commission so much of the funds of the Escrow Account as 
does not exceed the amount of consumer redress or disgorgement ordered, 
and which remains unsatisfied at the time notice is provided to the 
Escrow Agent, provided that, If ____________ has agreed to the entry of 
a court order or an order of the Commission, a specific finding that 
____________ violated the terms of the Consent Order or the provisions 
of the Federal Trade Commission Act shall not be necessary. The Escrow 
Agent shall have the power to convert to cash so [[Page 27314]] much of 
the Escrow Account assets as are necessary to satisfy the obligations 
of the judgment or order .
    5. The Escrow Account shall continue until at least five years 
after ____________ last advertises, promotes, offers for sale, sells, 
or distributes any product specified in the Consent Order, at which 
time, if there are no pending FTC investigations, legal or 
administrative actions by the FTC against ____________, or unsatisfied 
obligations pursuant to a judgment or order described in paragraph 4 
herein, for which a claim could be made against the escrow funds under 
the terms of the Consent Order, the FTC shall, upon ____________'s 
request, instruct the Escrow Agent to terminate the Escrow Account and 
return the balance of the Escrow Account to ____________. At such time, 
the Escrow Agent shall be fully and completely released from its agency 
as herein described. The legal title to the escrow funds shall vest in 
____________ at such time as the Escrow Agent, pursuant to instructions 
from the FTC, returns the funds to ____________.
    Witness the signatures of the parties, the day and year first above 
written.

    Date:

    Signatures

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 
Original Marketing, Inc. d/b/a Acu-Stop 2000; Franklin & Joseph, Inc.; 
Barry A. Weiss; and Roger Franklin.
    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 ear-mold 
acupressure device, marketed under the name Acu-Stop 2000, which nests 
in the ear. The Commission's Complaint charges that proposed 
respondents Original Marketing, Inc. d/b/a Acu-Stop 2000; Franklin & 
Joseph, Inc.; Barry A. Weiss; and Roger Franklin falsely represented 
that the Acu-Stop 2000: (1) Causes significant weight loss; (2) causes 
significant weight loss without the need to diet or exercise; and (3) 
controls appetite or eliminates a person's craving for food.
    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 Acu-Stop 
2000 is 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 Acu-Stop 2000 reflect the typical 
or ordinary experience of members of the public who have used the 
device.
    The proposed consent order contains provisions designed to remedy 
the violations charged and to prevent proposed respondents from 
engaging in similar acts in the future.
    Part I of the proposed order prohibits proposed respondents from 
representing that the Acu-Stop 2000 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 or 
eliminates a person's craving for food; 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 holds proposed respondents jointly and severally liable for, 
and requires them to pay, refunds to all purchasers of the Acu-Stop 
2000 who return or have returned the device for a refund. Part V.A. 
requires respondents to deposit $50,000 into an escrow account for 
payment of refunds to eligible consumers who purchased the device prior 
to January 1, 1995, and who previously have requested a refund or do so 
within ninety days after the proposed order becomes final. Part V.B. 
requires proposed respondents to pay, out of their own funds, all 
refund requests from eligible consumers that exceed $50,000 and all 
such requests for purchases made after January 1, 1995. Together, these 
two provisions require proposed respondents to pay all existing refund 
requests and future requests made up to ninety days after the proposed 
order becomes final. Part VI requires that proposed respondents 
maintain records demonstrating the manner and form of their compliance 
with the requirement that they make refunds.
    Part VII requires that proposed respondents Weiss and Franklin post 
a bond or fund an escrow account in the amount of $300,000 prior to the 
future marketing any weight-loss or weight-control product or program 
or any acupressure device.
    Part VIII 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 IX requires proposed respondents Original 
Marketing, Inc. and Franklin & Joseph, Inc. to distribute a copy of the 
order to current and future principals, 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 X of the proposed order, proposed respondents Original 
Marketing, Inc. and Franklin & Joseph, 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 XI requires that proposed respondents Weiss 
and Franklin, for a period of five (5) years, notify the Commission of 
any change in their business or employment. Part XII 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. 95-12588 Filed 5-22-95; 8:45 am]
BILLING CODE 6750-01-M