[Federal Register Volume 69, Number 56 (Tuesday, March 23, 2004)]
[Notices]
[Pages 13531-13532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6461]


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FEDERAL TRADE COMMISSION

[File No. 012 3248]


Vital Basics, 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 Sec.  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 Vital Basics, 
Inc., and Robert B. Graham and Michael B. Shane, individually and as 
officers 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 two products: Focus Factor and V-Factor Natural Pack. 
Focus Factor is 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. V-Factor Natural

[[Page 13532]]

Pack is a dietary supplement containing, among other things, yohimbine 
and L-arginine that was marketed as a men's sexual performance 
enhancer.
    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 further alleges that the respondents failed to have 
substantiation for their claims that V-Factor Natural Pack is safe for 
virtually all men, and falsely represented that a clinical study of the 
V-Factor Natural Pack conducted by Dr. Carlon Colker proves that V-
Factor is safe and is effective at improving sexual response and 
function.
    Finally, the complaint alleges that the respondents: (1) Failed to 
disclose that certain of the consumer and expert endorsers who appeared 
in advertising for Focus Factor had material connections with the 
companies and individuals marketing the product, and that other 
consumer endorsements were solicited by the promise of a free 6-month 
supply of Focus Factor to those individuals whose testimonials were 
used in the company's advertising; and (2) misrepresented that certain 
radio infomercials were independent radio programs, not paid commercial 
advertising.
    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 representations that Focus Factor or 
any substantially similar product (defined as any ingestable 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 
safety, performance, benefits, or efficacy of any food, drug, or 
dietary supplement for: (a) The brain or any mental functions or 
processes (including, but not limited to cognitive function, memory, 
focus, learning or concentration), stress, anxiety, energy, mood or 
behavior, academic or business performance, longevity, age-related 
memory impairment or dementia; (b) sexual response, function, 
enhancement, or performance; or (c) the treatment, cure, mitigation, or 
prevention, of any disorder. Although the order does not prohibit the 
trade name ``Focus Factor,'' it does require the respondents to have 
competent and reliable scientific evidence to substantiate any covered 
claims conveyed directly or by implication through the use of the 
product name.
    Part III requires that the respondents possess competent and 
reliable scientific evidence to support any future claims that V-Factor 
Natural Pack or any product containing yohimbine is safe.
    Part IV prohibits any misrepresentation of the existence, contents, 
validity, results, conclusions, or interpretations of any test or 
study, in connection with the marketing of sale of any product or 
program.
    Part V 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 product or program that is the 
subject of the endorsement.
    Part VI prohibits the creation or dissemination of any 
advertisement that misrepresents that it is not a paid advertisement, 
and requires that specific disclosures be included in any video or 
radio advertisement that is at least fifteen minutes in length.
    Part VII 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.
    Part VII provides for the payment of $1 million to the Commission.
    Part IX 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 X 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 XI requires that the Commission be notified of changes in 
corporate structure that might affect compliance obligations arising 
under the order.
    Part XII requires that the individual respondents notify the 
Commission for five (5) years of any changes in employment that might 
affect their compliance obligations arising under the order.
    Part XIII requires the respondents to file compliance reports with 
the Commission.
    Part XIV 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. 04-6461 Filed 3-22-04; 8:45 am]
BILLING CODE 6750-01-M