[Federal Register Volume 66, Number 119 (Wednesday, June 20, 2001)]
[Notices]
[Pages 33088-33090]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15547]


-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 002 3226]


ForMor, Inc., et al.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

-----------------------------------------------------------------------

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 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 July 16, 2001.

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

FOR FURTHER INFORMATION CONTACT: Michael Bloom or Donald D'Amato, 
Federal Trade Commission, Northeast Region, One Bowling Green, Suite 
318, New York, NY 10004. (212) 607-2801 or 607-2802.

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 by the 
Commission, has been placed on the public record for a period of thirty 
(30) 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 14, 2001), on the 
World Wide Web, at ``http://www.ftc.gov/os/2001/06/index.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 Ave., 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

[[Page 33089]]

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 from ForMor, Inc. 
(``ForMor''), a corporation, and Stan Goss, individually and as an 
officer of the corporation (``proposed respondents'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for the receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and comments received and will decide whether it should 
withdraw from the agreement and take appropriate action or make final 
the agreement's proposed order.
    This matter involves proposed respondents' making of health-related 
advertising claims on the Internet and elsewhere for their St. John's 
Kava Kava (a dietary supplement that contains St. John's Wort), 
colloidal silver, and shark cartilage products. The proposed complaint 
alleges that proposed respondents violated sections 5 and 12 of the 
Federal Trade Commission Act by making deceptive claims for these 
products.
    The proposed complaint alleges that proposed respondents made the 
unsubstantiated claim that ingestion of St. John's Kava Kava is 
effective in the treatment of HIV/AIDS, colds, syphilis, tuberculosis, 
dysentery, whooping cough, mania, hypochondria, fatigue, and hysteria. 
Further, the proposed complaint alleges that proposed respondents 
represented that ingestion of St. John's Kava Kava is effective in the 
treatment of HIV/AIDS, but deceptively failed to disclose the material 
fact that ingestion of St. John's Wort is not compatible with use of 
protease inhibitors and other drugs used in the treatment of HIV/AIDS. 
The proposed complaint also alleges that proposed respondents falsely 
represented that ingestion of St. John's Kava Kava has no serious drug 
interactions.
    The proposed complaint further alleges that proposed respondents 
falsely claimed that ingestion of colloidal silver is proven effective 
in the treatment of over 650 infectious diseases, and that medical 
tests prove that ingestion of colloidal silver is safe and has no 
adverse side effects. In addition, the proposed complaint alleges that 
proposed respondents made the unsubstantiated claims that ingestion of 
colloidal silver is effective in the treatment of arthritis, blood 
poisoning, cancer, cholera, diphtheria, diabetes, dysentery, gonorrheal 
herpes, influenza, leprosy, lupus, malaria, meningitis, rheumatism, 
shingles, staph infections, strep infections, syphilis, tuberculosis, 
whooping cough, and yeast infections, and that a testimonial from a 
consumer appearing in the advertisement for proposed respondents' 
colloidal silver reflects the typical or ordinary experiences of 
persons with cancer who use the product.
    Further, the proposed complaint alleges that proposed respondents 
made the following unsubstantiated claims regarding their shark 
cartilage products: Ingestion of shark cartilage is effective in the 
treatment of arthritis and other degenerative and inflammatory 
conditions; ingestion of shark cartilage is effective in the treatment 
of brain cancer; and a testimonial from a consumer appearing in the 
advertisement for proposed respondents' Ultimate II Shark Cartilage 
Concentrate reflects the typical or ordinary experience of persons with 
brain cancer who use the product. Finally, the proposed complaint 
alleges that proposed respondents falsely represented that scientific 
research establishes that ingestion of shark cartilage is effective in 
the treatment of arthritis and other degenerative and inflammatory 
conditions.
    For purposes of the proposed order a ``covered product or service'' 
means any service, program, dietary supplement, food, drug, or device.
    The proposed order defines ``St. John's Wort products'' as ForMor's 
St. John's Kava Kava or any covered product or service for which the 
term ``Hypericum Perforatum'' or ``St. John's Wort'' appears on the 
covered product or service label or in any advertising or promotion, 
and any covered product or service containing ``Hypericum Perforatum'' 
or ``St. John's Wort.''
    Part I of the proposed consent order prohibits proposed respondents 
from representing that ingestion of a St. John's Wort product or any 
covered product or service is effective in the treatment of HIV/AIDS, 
colds, syphilis, tuberculosis, dysentery, whooping cough, mania, 
hypochondria, fatigue, or hysteria unless, at the time the 
representation is made, respondents possess and rely upon competent and 
reliable scientific evidence that substantiates the representation. 
Part II of the proposed consent order prohibits proposed respondents 
from representing that ingestion of a St. John's Wort product has no 
serious drug interactions.
    Part III provides that in any advertisement, promotional material, 
or product label for any St. John's Wort product, that contains any 
representation about the efficacy, performance, or safety of such 
product, and in any discussion, communicated via electronic mail or any 
telephone line, that contains any representation about the efficacy, 
performance, or safety of any St. John's Wort product, proposed 
respondents shall make, clearly and prominently, the following 
disclosure:


    Warning: St. John's Wort can have potentially dangerous 
interactions with some prescription drugs. Consult your physician 
before taking St. John's Wort if you are currently taking 
anticoagulants, oral contraceptives, anti-depressants, anti-seizure 
medications, drugs to treat HIV or prevent transplant rejection, or 
any other prescription drug. This product is not recommended for use 
if you are or could be pregnant unless a qualified health care 
provider tells you to use it. The product may not be safe for your 
developing baby.

unless respondents possess competent and reliable scientific evidence 
that such product produces no adverse drug interactions or side 
effects. This disclosure was developed after discussions with the Food 
and Drug Administration. FDA has announced that it intends to initiate 
a rulemaking for dietary supplements for women who are or who may 
become pregnant. In the event that FDA issues a final rule requiring a 
warning for pregnant women on dietary supplements, respondents may 
substitute that warning for the disclosure on that topic required under 
the proposed order. Part III specifies that the product label 
requirements of this Part shall not apply to products that are shipped 
to consumers or purchasers for resale less than thirty (30) days after 
the date of service of this order, and that with regard to products 
shipped after thirty (30) days of the date of service of this order, 
respondents may affix the disclosure clearly and prominently by sticker 
or other device on the labels of products manufactured prior to thirty 
(30) days after the service of this order.
    The proposed order defines ``colloidal silver product'' as ForMor's 
colloidal silver or any covered product or service for which the term 
``colloidal silver'' or ``silver salts'' appears on the covered product 
or service label or in any advertising or promotion, and any covered 
product or service containing ``colloidal silver'' or ``silver salts.'' 
In

[[Page 33090]]

connection with the advertising or sale of a colloidal silver product, 
Part IV prohibits proposed respondents from representing that ingestion 
of colloidal silver is proven effective in the treatment of disease or 
any number of diseases, or representing that medical studies 
demonstrate that ingestion of colloidal silver is safe or has no 
adverse side effects. Part V prohibits proposed respondents from 
representing that ingestion of colloidal silver is effective in the 
treatment of arthritis, blood poisoning, cancer, cholera, diptheria, 
diabetes, dysentery, gonorrheal herpes, influenza, leprosy, lupus, 
malaria, meningitis, rheumatism, shingles, staph infections, strep 
infections, syphilis, tuberculosis, whooping cough, or yeast infections 
unless, at the time the representation is made, proposed respondents 
possess and rely upon competent and reliable scientific evidence that 
substantiates the representation.
    The proposed order defines ``shark cartilage product'' as ForMor's 
Ultimate II Shark Cartilage Concentrate or any covered product or 
service label for which the term ``shark cartilage'' appears on the 
covered product or service label or any advertising or promotion, and 
any covered product or service containing ``shark cartilage.'' Part VI 
requires proposed respondents, in connection with the advertising or 
sale of any shark cartilage product or any covered product or service, 
from representing that ingestion of such product is effective in the 
treatment of arthritis or other degenerative or inflammatory 
conditions, or is effective in the treatment of brain cancer, unless, 
at the time the representation is made, proposed respondents possess 
and rely upon competent and reliable scientific evidence that 
substantiates the representation.
    Part VII prohibits proposed respondents, in connection with the 
advertising or sale of any covered product or service, from 
misrepresenting the existence, contents, validity, results, 
conclusions, or interpretations of any test, study, or research. Part 
VIII prohibits proposed respondents from representing that the 
experience represented by any user testimonial or endorsement of a 
covered product or service represents the typical or ordinary 
experience of members of the public who use the covered product or 
service, unless: (a) At the time the representation is made, proposed 
respondents possess and rely upon competent and reliable scientific 
evidence that substantiates the representation; or (b) proposed 
respondents disclose, clearly and prominently, and in close proximity 
to the endorsement or testimonial, either what the generally expected 
results would be for users of the covered product or service, or the 
limited applicability of the endorser's experience to what consumers 
may generally expect to achieve, that is, that consumers should not 
expect to experience similar results.
    Part IX provides that proposed respondents, in connection with the 
advertising or sale of any St. John's Wort product, colloidal silver 
product, shark cartilage product, or any covered product or service, 
shall not make any representation that such product or service is 
effective in the mitigation, treatment, prevention, or cure of any 
disease or illness, or about the health benefits, performance, safety, 
or efficacy of any such product or service, unless, at the time the 
representation is made, proposed respondents possess and rely upon 
competent and reliable scientific evidence that substantiates the 
representation.
    Part X requires proposed respondents to send a notice to all 
purchasers of St. John's Kava Kava, colloidal silver, and Ultimate II 
Shark Cartilage Concentrate informing them of the Commission's 
complaint allegations and describing the terms of the settlement. Part 
XI requires proposed respondents to provide refunds upon request to 
purchasers of colloidal silver and Ultimate II Shark Cartilage 
Concentrate, and Part XII requires proposed respondents to submit a 
report specifying the steps they have taken to comply with Part X 
(purchaser notice provisions) and Part XI (purchaser refund 
provisions).
    Part XIII requires proposed respondents to take reasonable steps to 
ensure that all employees and agents engaged in sales, order 
verification, and other customer service functions comply with Parts I 
through IX of the proposed order. It further requires proposed 
respondents to terminate any employee who knowingly engages in conduct 
that violates these parts of the order. Part XIV requires proposed 
respondents to send each purchaser for resale--defined as any purchaser 
of any of respondents' St. John's Wort, colloidal silver, or shark 
cartilage products who orders five or more units of any such product at 
any one time or twenty or more units of any such products in any three-
month period--the purchaser notice provisions required by Part X. In 
the event that proposed respondents receive any information that 
subsequent to receipt of such notice a purchaser is using or 
disseminating any advertisement or promotional material or making any 
oral statement that contains any prohibited representation or that does 
not contain the disclosure required pursuant to Part III, proposed 
respondents are required to investigate such information and upon 
verification terminate, and not resume, sales or shipments to such 
purchaser for resale. Part XV would allow proposed respondents to make 
any representation that is specifically permitted in the labeling for 
any product by regulations promulgated by the FDA pursuant to the 
Nutrition Labeling and Education Act of 1990, and would allow 
respondents to make any representation for any drug that is permitted 
by the FDA in the drug's labeling.
    Part XVI of the proposed order contains record keeping requirements 
for materials that substantiate, qualify, or contradict claims covered 
by the proposed order. Part XVII of the proposed order requires 
distribution of a copy of the order to current and future officers and 
agents. Part XVIII provides for Commission notification upon a change 
in the corporate respondent and Part XIX requires Commission 
notification when the proposed individual respondent changes his 
business or employment. Part XX requires the proposed respondents to 
file with the Commission a report demonstrating compliance with the 
terms and provisions of the order. Part XXI provides for the 
termination of the order after twenty (20) 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 the proposed order or to modify in 
any way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 01-15547 Filed 6-19-01; 8:45 am]
BILLING CODE 6750-01-M