[Federal Register Volume 69, Number 56 (Tuesday, March 23, 2004)]
[Notices]
[Pages 13530-13531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6460]


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FEDERAL TRADE COMMISSION

[File No. 012 3248]


Creative Health Institute, 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 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 April 16, 2004.

ADDRESSES: Comments filed in paper form should be directed to: FTC/
Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. Comments filed in electronic form should be 
directed to: [email protected], as prescribed in the 
Supplementary Information section.

FOR FURTHER INFORMATION CONTACT: Heather Hippsley or Shira Modell, FTC, 
Bureau of Consumer Protection, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580, (202) 326-3285 or 326-3116.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  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 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 March 17, 2004), on the World Wide Web, at http://www.ftc.gov/os/2004/03/index.htm. A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, 
DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. Comments filed in paper form should 
be directed to: FTC/Office of the Secretary, Room 159-H, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. If a comment contains 
nonpublic information, it must be filed in paper form, and the first 
page of the document must be clearly labeled ``confidential.'' Comments 
that do not contain any nonpublic information may instead be filed in 
electronic form (in ASCII format, WordPerfect, or Microsoft Word) as 
part of or as an attachment to email messages directed to the following 
e-mail box: [email protected]. Such comments 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 containing a consent order from Creative Health 
Institute, Inc., and Kyl L. Smith, individually and as an officer of 
the corporation.
    The proposed consent order has been placed on the public record for 
thirty (30) days for 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 the comments received, and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    This matter involves practices relating to the advertising and 
promotion of Focus Factor, a dietary supplement containing, among other 
things, vitamins, minerals, botanicals, and amino acids. Marketing 
materials for Focus Factor claimed that the product enhanced brain 
function and improved the focus, memory, mood, concentration, and 
energy of children, adults, and seniors.
    According to the FTC complaint, the respondents failed to have 
substantiation for their claims that Focus Factor: (a) Improves the 
focus, memory, and concentration of healthy adults; (b) alleviates 
stress and combats the fatigue, irritability and mood swings that 
healthy adults experience; (c) makes children and teenagers feel more 
alert, focused, and mentally sharp; (d) improves students' ability to 
concentrate and their academic performance; (e) improves senior 
citizens' memory, mental clarity, and energy; (f) improves adults' 
ability to absorb information in books and to recall facts, figures and 
names; and (g) works in as little as one to ten days.
    The complaint also alleges that the respondents failed to disclose 
that certain of the endorsers who appeared in advertising for Focus 
Factor had material connections with the product.
    The proposed consent order contains provisions designed to prevent 
the respondents from engaging in similar acts and practices in the 
future.
    Part I of the order prohibits claims that Focus Factor or any 
substantially similar product (defined as any ingestible dietary 
supplement containing one or more specified ingredients): (a) Improves 
the focus, memory, and concentration of healthy adults; (b) alleviates 
stress, fatigue, irritability and mood swings in healthy adults; (c) 
makes children and teenagers feel more alert, focused, and mentally 
sharp; (d) improves students' ability to concentrate and their academic 
performance; (e) improves senior citizens' memory, mental clarity, and 
energy; (f) improves adults' ability to absorb information in books and 
to recall facts, figures and names; or (g) works in as little as one to 
ten days, unless the claims are substantiated by competent and reliable 
scientific evidence.
    Part II requires that the respondents possess competent and 
reliable scientific evidence to support any future claims about the 
benefits, performance, or efficacy of any food, drug, or dietary 
supplement for: (a) The brain or any

[[Page 13531]]

mental functions or processes (including, but not limited to cognitive 
function, memory, focus, learning or concentration); (b) stress, 
anxiety, energy, mood or behavior; (c) academic or business 
performance; (d) longevity, age-related memory impairment or dementia; 
or (e) the treatment, cure, mitigation, alleviation of the symptoms, 
prevention or reduction in the risk of any mental, brain, or central 
nervous system disease or disorder.
    Part III requires disclosure of any material connection that exists 
between an endorser and the respondents or any other person or entity 
involved in marketing or selling the food, drug or dietary supplement 
that is the subject of the endorsement.
    Part IV permits any representation for any product that is 
permitted in labeling for such product by the FDA pursuant to the 
Nutrition Labeling and Education Act of 1990, and any representation 
for any drug that is permitted in labeling for such drug under any 
tentative or final standard promulgated by the FDA or under any new 
drug application approved by the FDA.
    Part V states that nothing in the order shall be constituted as a 
waiver of the respondents' rights to engage in speech protected by the 
First Amendment to the Constitution.
    Part VI provides for the payment of $60,000 to the Commission.
    Part VII requires the respondents to retain certain records for 
five (5) years after the last date of dissemination of any 
representation covered by the order: (1) All advertisements and 
promotional materials containing the representation; (2) all materials 
relied upon in disseminating the representation; and (3) all evidence 
in respondents' possession or control that contradicts, qualifies, or 
calls into question the representation or the basis for the 
representation.
    Part VIII requires the respondents for ten (10) years to provide 
copies of the order to personnel having responsibilities relating to 
the subject matter of the order, and to obtain signed copies 
acknowledging receipt of the order.
    Part IX requires that the Commission be notified of changes in 
corporate structure that might affect compliance obligations arising 
under the order.
    Part X requires that the individual respondent notify the 
Commission for five (5) years of any changes in employment that might 
affect his compliance obligations arising under the order.
    Part XI requires the respondents to file compliance reports with 
the Commission.
    Part XII provides that the order will terminate 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 proposed order or to modify in any 
way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 04-6460 Filed 3-22-04; 8:45 am]
BILLING CODE 6750-01-M