[Federal Register Volume 63, Number 241 (Wednesday, December 16, 1998)]
[Notices]
[Pages 69293-69294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33284]


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FEDERAL TRADE COMMISSION

[File No. 9623270]


New Vision International et al.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before February 16, 1999.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:
Matthew Gold or Sylvia Kundig, San Francisco Regional Office, Federal 
Trade Commission, 901 Market Street, Suite 570, San Francisco, 
California 94103, (415) 356-5270.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(d) 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 above-captioned 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. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for December 8, 1998), on the World Wide Web, at ``http://www.ftc.gov/
os/actions97.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, 600 Pennsylvania Avenue, N.W., Washington, 
D.C. 20580, either in person or by calling (202) 326-3627. 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)).

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 New Vision 
International, Inc., NVI Promotions, L.L.C., and their two principals, 
Jason P. Boreyko and Benson K. Boreyko (hereinafter ``New Vision'' or 
``respondents''). New Vision is a multi-level marketing company that 
sells nutritional supplements. In a separate action, the Commission has 
also accepted a similar agreement involving Max F. James, a distributor 
of New Vision products.
    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 any 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 has focused on New Vision's advertisements for a 
regimen of nutritional supplements that they called ``God's Recipe.'' 
The advertisements claimed that God's Recipe could mitigate or cure the 
effects of Attention Deficit Disorder or Attention Deficit 
Hyperactivity Disorder.
    The proposed complaint alleges that New Vision could not 
substantiate the following claims: (1) that God's Recipe can cure, 
prevent, treat or mitigate Attention Deficit Disorder or its symptoms; 
(2) that God's Recipe can cure, prevent, treat or mitigate Attention 
Deficit Hyperactivity Disorder or its symptoms; (3) that God's Recipe 
is an effective alternative treatment to the prescription drug Ritalin 
for Attention Deficit Disorder and Attention Deficit Hyperactivity 
Disorder; and (4) that testimonials from consumers appearing in the 
advertisements for God's Recipe reflect the typical or ordinary 
experience of members of the public whose children have used the 
product.
    Part I of the proposed consent order prohibits New Vision, when 
advertising God's Recipe or any other food, drug or dietary supplement, 
from making claims (1) through (3), above, unless the claim is 
substantiated at the time it is made. Part II of the proposed order 
addresses claims made through endorsements or

[[Page 69294]]

testimonials. Under Part II, respondents may make such representations 
if they possess and rely upon competent and reliable evidence that 
substantiates the representations; or the respondents must disclose 
either what the generally expected results would be for users of the 
advertised products, or the limited applicability of the endorser's 
experience to what consumers may generally expect to achieve. The 
proposed order's treatment of testimonial claims is in accordance with 
the Commission's ``Guides Concerning Use of Endorsements and 
Testimonials in Advertising,'' 16 CFR 255.2(a).
    Part III of the proposed order prohibits respondents from making 
unsubstantiated claims about the safety of any food, drug or dietary 
supplement, or about the ability of such product to treat, cure, 
alleviate the symptoms of, prevent, or reduce the risk of developing 
any disease or disorder. Part IV of the proposed order contains 
language permitting New Vision to make drug claims that have been 
approved by the FDA pursuant to either a new drug application or a 
tentative final or final standard. Part V states that New Vision would 
be permitted to make claims that the FDA has approved pursuant to the 
Nutrition Labeling and Education Act of 1990.
    Part VI of the proposed order requires New Vision to retain, and 
make available to the Commission upon request, all advertisements and 
promotional materials containing any representation covered by the 
order, as well as any materials that it relied upon in disseminating 
the representation and any materials that contradict, qualify, or call 
into question the representation.
    Parts VII and VIII of the proposed order require New Vision to 
distribute the order to relevant parties. Part VII requires New Vision 
to distribute a copy of the order to all current and future principals, 
officers, directors, and managers, and to any employee, agent or 
representative with responsibilities under the order. Part VIII.A 
requires the company to distribute a letter, attached to the order as 
Appendix A, to each current active distributor. Part VIII.B requires 
the company to distribute a letter, attached to the order as Appendix 
B, to future distributors for a period of five years. These 
substantially similar letters state that no distributor may make any 
claim regarding the therapeutic or curative properties of New Vision 
products unless she has received prior approval from New Vision. The 
letters also state that all distributor advertising must either be 
obtained from New Vision or pre-approved by New Vision. In addition, 
the letters state that failure to conform to these requirements will be 
grounds for suspension or termination.
    Part IX of the proposed New Vision order contains some additional 
requirements in recognition of the fact that, as a multi-level 
marketing company, New Vision's contact with consumers is made almost 
exclusively through a network of distributors who are not covered by 
the order. For example, Part IX.A.1 would require the company to compel 
its distributors to submit all advertising to the company for pre-
approval. Part IX.A.2 would require New Vision to establish a mechanism 
for suspending or terminating business dealings with any distributor 
who fails to submit advertising for pre-approval. Part IX.A.3 would 
require New Vision to send to each active distributor a notice, every 
six months, reminding them of the pre-approval requirement. To ensure 
that the company remains abreast of its distributor's marketing efforts 
over the Internet, Part IX.A.4 would require New Vision to conduct a 
monthly search of the World Wide Web for independent distributor 
advertising.
    Part IX.B of the proposed order would require New Vision to police 
to distributors and investigate complaints that any distributor may be 
violating the order. Part IX.C would require New Vision to discontinue 
dealing with any distributor once respondents obtain actual knowledge, 
or knowledge fairly implied on the basis of objective circumstances, 
that the distributor is making a representation that is prohibited by 
the order, unless that person immediately ceases such activity. If New 
Vision learns that the distributor has not permanently ceased making 
representations prohibited by the order, New Vision must immediately 
discontinue its dealings with the distributor.
    The remainder of the proposed New Vision order contains standard 
requirements that the corporate respondents notify the Commission of 
any changes in corporate structure that might affect compliance with 
the order, that the individual respondents notify the Commission of 
changes in their employments status, and that New Vision file one or 
more reports detailing their compliance with the order.
    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.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 98-33284 Filed 12-15-98; 8:45 am]
BILLING CODE 6750-01-M