[Federal Register Volume 60, Number 128 (Wednesday, July 5, 1995)]
[Notices]
[Pages 35023-35026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16445]



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FEDERAL TRADE COMMISSION
[File No. 932-3077]


Body Wise International, 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, a Carlsbad, California based company from 
making false claims that a food, drug, or nutritional supplement helps 
users achieve or maintain weight loss without diet or exercise, and 
would bar unsubstantiated weight-loss, weight-loss maintenance, 
cholesterol-reduction, or other health benefits claims for such 
products. In addition, it would prohibit the deceptive use of consumer 
testimonials or professional endorsements, and would require clear 
disclosures of any financial connection between endorsers and the 
respondent or its products.

DATES: Comments must be received on or before September 5, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 


[[Page 35024]]
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20508.

FOR FURTHER INFORMATION CONTACT: Jeffrey A. Klurfeld or David Newman, 
San Francisco Regional Office, Federal Trade Commission, 901 Market 
Street, Suite 570, San Francisco, California 94103. (415) 744-7920.

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).

Agreement Containing Consent Order to Cease and Desist

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Body Wise International, Inc. (``Body 
Wise''), a corporation, and it now appearing that Body Wise, sometimes 
referred to as proposed respondent, is willing to enter into an 
agreement containing an order to cease and desist from the acts and 
practices being investigated,
    It is hereby agreed by and between Body Wise, by its duly 
authorized officers and its attorneys, and counsel for the Federal 
Trade Commission that;
    1. Proposed respondent Body Wise is a corporation organized, 
existing and doing business under and by virtue of the laws of the 
State of Nevada, with its office and principal place of business at 
6350 Palomar Oaks Court, Suite A Carlsbad, California 92009.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the draft of 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.
    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) day, 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 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 
respondent, (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 respondent's 
address as stated in this agreement containing the agreed-to order 
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 proposed complaint and order 
contemplated hereby. It understands that once the order has been 
issued, it may 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. ``Distributor'' means any person, other than direct employees of 
Body Wise, who has sold nutritional supplements on behalf of Body Wise 
or who has received any compensation in connection with the sale of 
nutritional supplements on behalf of Body Wise, whether such person is 
characterized as a consultant, associate, distributor or otherwise.
    B. ``Competent and reliable scientific evidence'' means 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.
I
    It is ordered that Body Wise International, Inc., a corporation, 
its successors and assigns, and its officers, directors, 
representatives, agents, and employees, directly or through any 
corporation, subsidiary, division or other device, in connection with 
the advertising, packaging, labeling, promotion, offering for sale, 
sale or distribution of nutritional supplements, food or drugs, as 
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal 
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, do 
forthwith cease and desist from misrepresenting or assisting others in 
misrepresenting, in any manner, directly or by implication, that the 
nutritional supplement, food or drug:
    a. Can cause, aid, facilitate or contribute to achieving or 
maintaining weight loss without a reduction in total caloric intake or 
an increase in exercise; or
    b. Contains any ingredient that, individually or in connection with 
other ingredients, can cause, aid, facilitate or contribute to 
achieving or maintaining weight loss without a reduction in total 
caloric intake or an increase in exercise.
II
    It is further ordered that Body Wise International, Inc., a 
corporation, its successors and assigns, and its officers, directors, 
representatives, agents, and employees, directly or through any 

[[Page 35025]]
corporation, subsidiary, division or other device, in connection with 
the advertising, packaging, labeling, promotion, offering for sale, 
sale or distribution of nutritional supplements, food or drugs, as 
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal 
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, do 
forthwith cease and desist from representing or assisting others in 
representing, in any manner, directly or by implication, that the 
nutritional supplement, food or drug:
    a. Can cause, aid, facilitate or contribute to achieving or 
maintaining weight loss;
    b. Contains any ingredient that, individually or in connection with 
other ingredients, can cause, aid, facilitate or contribute to 
achieving or maintaining weight loss;
    c. Reduces, can reduce or helps reduce serum cholesterol levels;
    d. Contains any ingredient that, individually or in connection with 
other ingredients, reduces, can reduce or helps reduce serum 
cholesterol levels; or
    e. Provides, can provide, or helps provide any other health 
benefit;

unless, at the time of making any such representation, respondent 
possesses and relies upon competent and reliable scientific evidence 
that substantiates the representation.
III
    It is further ordered that Body Wise International, Inc., a 
corporation, its successors and assigns, and its officers, directors, 
representatives, agents, and employees, directly or through any 
corporation, subsidiary, division or other device, in connection with 
the advertising, packaging, labeling, promotion, offering for sale, 
sale or distribution of nutritional supplements, food or drugs, as 
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal 
Trade Commission Act, 15 U.S.C. 52 and 55, 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 existence, contents, validity, results, 
conclusions, or interpretations of any test or study.
IV
    It is further ordered that Body Wise International, Inc., a 
corporation, its successors and assigns, and its officers, directors, 
representatives, agents, and employees, directly or through any 
corporation, subsidiary, division or other device, in connection with 
the advertising, packaging, labeling, promotion, offering for sale, 
sale or distribution of nutritional supplements, food or drugs, as 
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal 
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as 
``commerce' is defined in the Federal Trade Commission Act, do 
forthwith cease and desist from representing or assisting others in 
representing, in any manner, directly or by implication, that any 
endorsement (as ``endorsement'' is defined in 16 CFR 255.0(b)) of such 
nutritional supplement, food or drug represents the typical or ordinary 
experience of members of the public who use the nutritional supplement, 
food or drug, unless such representation is true and, at the time of 
making such representation, respondent possesses and relies upon 
competent and reliable scientific evidence that substantiates such 
representation.
    Provided, however, respondent may use such endorsements if the 
statements or depictions that comprise the endorsements are true and 
accurate, and if respondent discloses clearly, prominently, and in 
close proximity to the endorsement:
    a. What the generally expected performance would be in the depicted 
circumstances; or
    b. The limited applicability of the endorser's experience to what 
consumers may generally expect to achieve; i.e., that consumers should 
not expect to experience similar results.
    It is further ordered that Body Wise International, Inc., a 
corporation, its successors and assigns, and its officers, directors, 
representatives, agents, and employees, directly or through any 
corporation, subsidiary, division or other device, in connection with 
the advertising, packaging, labeling, promotion, offering for sale, 
sale or distribution of nutritional supplements, food or drugs, as 
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal 
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, do 
forthwith cease and desist from failing to disclose, clearly and 
prominently, a material connection, when one exists, between a person 
providing an endorsement for any such product, as ``endorsement'' is 
defined in 16 CFR 255.0(b), and respondent or any other individual or 
entity manufacturing, labeling, advertising, promoting, offering for 
sale, selling, or distributing such product. For purposes of this 
Order, ``material connection'' shall mean any relationship that might 
materially affect the weight or credibility of the endorsement and 
would not reasonably be expected by consumers.
VI
    It is further ordered that Body Wise International, Inc., a 
corporation, its successors and assigns, and its officers, directors, 
representatives, agents, and employees, directly or through any 
corporation, subsidiary, division or other device, in connection with 
the advertising, packaging, labeling, promotion, offering for sale, 
sale or distribution of nutritional supplements, food or drugs, as 
``food'' and ``drug'' are defined in sections 12 and 15 of the Federal 
Trade Commission Act, 15 U.S.C. 52 and 55, in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, do 
forthwith cease and desist from disseminating or assisting others in 
disseminating any advertisement which contains any reference to 
physicians or other health care professionals unless respondent 
discloses clearly and conspicuously that physicians and other health 
care professionals who endorse Body Wise products may be Body Wise 
distributors and have a financial interest in promoting the sale of 
Body Wise products.
VII
    Nothing in this Order shall prohibit respondent from making any 
representation that is specifically permitted in labeling for any 
product by regulations promulgated by the Food and Drug Administration 
pursuant to the Nutrition Labeling and Education Act of 1990.
VIII
    Nothing in this Order shall prohibit respondent from making any 
representation for any drug that is permitted in labeling for any such 
drug under any tentative final or final standard promulgated by the 
Food and Drug Administration, or under any new drug application 
approved by the Food and Drug Administration.
IX
    It is further ordered that respondent shall notify the Commission 
at least thirty (30) days prior to any proposed change in the 
corporation, such as dissolution, assignment, sale resulting in the 
emergence of a successor corporation or association, or the creation or 
dissolution of subsidiaries or affiliates, or any other change in the 
corporation that may affect compliance obligations arising under this 
Order. 

[[Page 35026]]

X
    It is further ordered that for three (3) years following the 
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, 
copies of:
    A. All materials that were relied upon in disseminating such 
advertisement; 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, including complaints from consumers.
XI
    It is further ordered that respondent shall distribute a copy of 
this Order to each of its operating divisions and to each of its 
officers, agents, representatives, and employees engaged in the 
preparation or placement of advertisements or other materials covered 
by this Order.
XII
    It is further ordered that respondent shall distribute a copy of 
this Order to each of its current distributors; provided that 
respondent may satisfy the requirements of this section with respect to 
current distributors by publishing the full text of this Order clearly 
and prominently in any periodical which is published by respondent and 
which is distributed to all of its distributors.
XIII
    It is further ordered that respondent shall, within sixty (60) days 
after service of this Order, and at such other times as the Commission 
may require, 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, subject to final 
approval, an agreement to a proposed consent order from Body Wise 
International, Inc. (``Body Wise'' or ``respondent''). The agreement 
would settle a proposed complaint by the Federal Trade Commission that 
respondent has engaged in unfair or deceptive acts or practices in 
violation of section 5(a) of the Federal Trade Commission Act.
    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 or make final the agreement's proposed 
order.

The Proposed Complaint

    The administrative complaint which the Commission proposed to issue 
would charge that respondent markets a number of nutritional 
supplements, for which it makes deceptive representations concerning 
their efficacy in promoting weight loss and weight management and in 
the reduction of serum cholesterol levels. The complaint also charges 
Body Wise with using testimonials from physicians and consumers, when 
the experiences described in the testimonials are not typical of the 
likely experiences of Body Wise customers, and without disclosing that 
the endorsers have a financial interest in promoting the sale of Body 
Wise products. Finally, the complaint alleges that Body Wise has 
encouraged the use of physicians and other health professionals as 
references without disclosing to consumers that they have a direct 
financial interest in promoting the sale of Body Wise products.
    The definition section of the proposed order defines certain terms 
used throughout the order.
    Section I of the proposed order bars Body Wise from making claims 
that its nutritional supplements can cause or contribute to achieving 
or maintaining weight loss without a reduction in caloric intake or an 
increase in exercise and or that its supplements contain any 
ingredients that have that effect. Section II of the order bars 
unsubstantiated weight loss, weight management and cholesterol 
reduction claims. It also contains fencing-in relief that applies the 
same substantiation standard to any claims regarding the health 
benefits of its nutritional supplements. Section III bars Body Wise 
from misrepresenting tests or studies. Section IV bars Body Wise from 
using testimonials to represent the typical experience of Body Wise's 
customers unless it can substantiate that such claims are in fact 
typical or it clearly discloses that the endorser's experience is not 
typical. Section V requires the affirmative disclosure of any material 
connection between Body Wise and any endorser.
    Section VI requires Body Wise, in any advertisement that contains 
any reference to physicians or other health professionals, to disclose 
that health care professionals who endorse Body Wise products or act as 
references may be distributors and have a financial interest in 
promoting the sale of Body Wise products. This section addresses Body 
Wise's use of physicians as references to support the sales activities 
of other Body Wise distributors.
    Sections VII and VIII harmonize the requirements of the order with 
the requirements of the Nutrition Labeling and Education Act of 1990 
and with Food and Drug Administration procedures. The remaining 
sections are standard reporting, record-keeping and notice provisions.
    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 the proposed order or to modify 
their terms in any way.
Donald S. Clark,
Secretary.
[FR Doc. 95-16445 Filed 7-3-95; 8:45 am]
BILLING CODE 6750-01-M