[Federal Register Volume 64, Number 126 (Thursday, July 1, 1999)]
[Notices]
[Pages 35663-35665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16707]


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FEDERAL TRADE COMMISSION

[File No. 9823150]


Magnetic Therapeutic Technologies, Inc., 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

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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 August 30, 1999.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Avenue, NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Christa V.A. Vecchi, FTC/H-263, 600 
Pennsylvania Avenue, NW, Washington, DC 20580, (202) 326-3166.

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 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 June 24, 1999), 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, NW, Washington, DC 
20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Avenue, NW, 
Washington, DC 20580. Two paper copies of each comment should be filed, 
and should be accompanied, if possible, by a 3\1/2\ inch diskette 
containing an electronic copy of the comment. 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, subject to final 
approval, an agreement to a proposed Consent Order (``proposed order'') 
from Magnetic Therapeutic Technologies, Inc. (``MTT'') and Jim B. 
Richardson, the President of the corporation.
    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.
    This matter concerns Internet, print, and catalogue advertisements 
disseminated directly to consumers, and print advertisements provided 
to distributors and retail stores, including health food stores and 
pharmacies, for dissemination directly to consumers, for proposed 
respondents' magnetic therapy products. These products contain magnets 
that purportedly treat and alleviate a variety of medical problems, 
including cancer, high blood pressure, HIV, diabetic neuropathy, and 
Multiple Sclerosis. Proposed respondents' magnetic products include an 
assortment of devices, such as Magnetic Knee Supports and Magnetic 
Sleep Pads.
    The Commission's complaint charges that the proposed respondents 
engaged in deceptive advertising in violation of section 5 and 12 of 
the FTC Act by making unsubstantiated claims that its magnetic therapy 
products: (1) Are effective in treating cancer, including lung and 
breast cancers, diabetic ulcers, arthritis, and degenerative joint 
conditions; (2) lower high blood pressure; (3) stabilize or increase 
the T-cell count of HIV patients; (4) reduce muscle spasms in persons 
with Multiple Sclerosis; (5) reduce nerve spasms associated with 
diabetic neuropathy; (6) increase bone density, immunity, and 
circulation; and (7) are as effective as prescription pain medicine in 
alleviating severe pain caused by conditions such as arthritis, carpal 
tunnel syndrome, and back pain.
    The complaint further alleges that proposed respondents represented 
that testimonials from consumers appearing in the advertisements or 
promotional materials for proposed respondents' products reflect the 
typical or ordinary experience of members of the public who use the 
products. The proposed complaint alleges that respondents lack 
substantiation for this claim.
    This proposed order contains provisions designed to remedy the 
violations charged and to prevent proposed respondents from engaging in 
similar acts in the future.
    Paragraph I of the proposed order prohibits proposed respondents 
from representing that their magnetic therapy products (defined as any 
product that contains a magnet of any kind purporting to relieve the 
symptoms of, treat, mitigate, cure, relieve, heal or alleviate any 
disease or health condition): (1) Are effective in treating cancer, 
including lung and breast cancers, diabetic, ulcers, arthritis, or 
degenerative joint conditions; (2) lower high blood pressure; (3) 
stabilize or increase the T-cell count of HIV patients; (4) reduce 
muscle spasm in persons with Multiple Sclerosis; (5) reduce nerve 
spasms associated with diabetic neuropathy; (6) increase bone density, 
immunity, or circulation; or (7) are comparable or superior to 
prescription pain medicine, unless, at the time the representation is 
made, respondents possess and rely upon competent and reliable 
scientific evidence that substantiates the representation.
    Paragraph II of the proposed order prohibits proposed respondents 
from representing that the experience represented by any user 
testimonial or endorsement of any product or program represents the 
typical or ordinary experience of members of the public who use the 
product or program, unless the representation is true, 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 product or 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.
    Paragraph III of the proposed order prohibits proposed respondents 
from making any representation about the health benefits, performance, 
or efficacy of any product or program, unless, at the time the 
representation is made, respondents posses and rely upon competent and 
reliable scientific evidence that substantiates the representation.
    Paragraph IV of the proposed order prohibits proposed respondents 
from: (1) Disseminating to any distributor any material containing any 
claims prohibited by the order; and (2) authorizing any distributor to 
make any representations prohibited by the order. In addition, 
Paragraph IV requires proposed respondents to (1) send a short notice 
to distributors with whom they have done business since January 1, 
1994, announcing their settlement with the FTC and the state of Texas, 
and

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requiring distributors to submit all proposed promotional and marketing 
materials to proposed respondents for approval prior to their 
dissemination; (2) send, for a period of three years, the same notice 
to future distributors with whom proposed respondents to business; (3) 
monitor distributors' promotional activities; (4) terminate, as 
appropriate, the right of any distributor to market MTT products or 
programs who continues to use promotional materials or make oral 
representations that violate the order; (5) provide the FTC all 
relevant information about the distributors who continue to engage in 
activities that violate the order; and (6) approve all marketing 
materials before distributors disseminate them to the public.
    Paragraph V contains record keeping requirements for the 
notification letters sent to distributors, communications between 
respondents and distributors referring or relating to the requirements 
of Paragraph IV of the order, and any other materials created pursuant 
to Paragraph IV.
    Paragraph VI of the proposed order contains record keeping 
requirements for materials that substantiate, qualify, or contradict 
covered claims and requires the proposed respondents to keep and 
maintain all advertisements and promotional materials containing any 
representation covered by the proposed order. In addition, Paragraph 
VII requires distribution of a copy of the consent decree to current 
and future officers and agents. Further, Paragraph VIII provides for 
Commission notification upon a change in the corporate respondents. 
Paragraph IX requires proposed respondent Jim B. Richardson to notify 
the Commission when he discontinues his current business or employment 
and of his affiliation with any new business or employment. The 
proposed order, in Paragraph X, also requires the filing of a 
compliance report.
    Finally, Paragraph XI of the proposed order provides for the 
termination of the order after twenty years under certain 
circumstances.
    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.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 99-16707 Filed 6-30-99; 8:45 am]
BILLING CODE 6750-01-M