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7/10/2001

FTC Cracks Down on False Dietary Supplement Ads

Donna Young

The Federal Trade Commission (FTC) is bearing down on companies that are using the Internet to prey on sick and vulnerable consumers.

The commission charged seven companies in June with making false claims in advertisements on the Internet that their devices, herbal products, and other dietary supplements treat or cure cancer, HIV infection, AIDS, arthritis, hepatitis, Alzheimer’s disease, diabetes mellitus, and many other diseases.

Five of the companies settled the charges by signing consent agreements. The commission filed a complaint in the U.S. District Court for the Western District of Washington, in Seattle, against a sixth company, Western Dietary Products in Blaine, Washington, and the company's owners.

The complaint charged that the company falsely marketed various herbal formulas and herbal cure packages to treat and cure cancer, Alzheimer’s disease, diabetes mellitus, arthritis, HIV infection, and AIDS.

FTC also charged the company with making unsubstantiated claims that its Zapper Electrical Unit was a treatment and cure for Alzheimer’s disease, HIV infection, and AIDS. In addition, the commission said the defendants falsely claimed that their herbal products would make surgery and chemotherapy unnecessary for persons with cancer.

At a June 13 hearing, Western Dietary Products agreed to entry of a preliminary injunction.

A week later, the commission filed suit against a Utah company, Streamline International Inc., for selling dangerous dietary supplements on the Internet as part of an illegal pyramid-marketing scheme.

The complaint was filed in the U.S. District Court for the Southern District of Florida. An FTC spokesperson said the suit was filed in Florida because one of the defendants named in the case is a Florida resident.

FTC charged that the Streamline operation and its deceptive claims violate federal law. It has filed a motion for a preliminary injunction and other equitable relief, including the appointment of a receiver and a freeze on the company’s assets. The commission said it would seek at the trial to permanently bar the company’s operation.

FTC said Streamline claimed its products contained "only those ingredients that appear on the [FDA’s] list of [substances] generally recognized as safe."

But, FTC stated, Streamline sold dietary supplements that contain comfrey, which is not on FDA’s list. In fact, FTC said, comfrey is known to pose a significant risk to humans, including liver damage when used internally or externally on open wounds.

FTC said the recent enforcement actions against the fraudulent marketing of supplements and other health products on the Internet are part of a coordinated effort with FDA, Health Canada, and various state attorneys general. "Operation Cure.All" is an ongoing, comprehensive law enforcement and consumer education campaign begun in 1997.

Under current law, the dietary supplement industry does not have to submit its products to FDA for screening before marketing or report adverse reactions when they occur. The Dietary Supplement Health and Education Act of 1994 (DSHEA) exempted dietary supplements from the FDA regulatory requirements covering foods.

FTC regulates advertising, including infomercials, for dietary supplements and most other products sold to consumers.

The commission said it took action against the companies because of representation by some marketers that their products are safe when, in fact, the agency said, the products may potentially cause dangerous interactions with other medications.

FTC said two companies, ForMor Inc. of Conway, Arkansas, and Panda Herbal International of Bensalem, Pennsylvania, marketed St. John's wort as a safe treatment for HIV infection and AIDS.

In February 2000, FDA issued a public health advisory to alert health care providers and consumers to the results of a National Institutes of Health study indicating that the use of St. John's wort may cause a loss of therapeutic effect for any drug metabolized along the same specified pathway. Examples of this type of drug include HIV medications, agents to prevent transplant rejection, and oral contraceptives.

FDA regulations require that a dietary supplement label include, at a minimum, the following information: a descriptive name of the product stating that it is a supplement; the name and place of business of the manufacturer, packer, or distributor; a complete list of ingredients; and the net contents of the product.

The consent agreements that ForMor and Panda Herbal signed require them to place a disclosure warning on any advertisement, promotional material, or product label warning consumers that St. John's wort can have potentially dangerous interactions with some prescription drugs.

MaxCell BioScience Inc. of Broomfield, Colorado, one of the companies that signed a consent agreement, was fined $150,000 for falsely marketing its Longevity Signal Formula as a dietary supplement that reverses the aging process and prevents, treats, or cures numerous age-related diseases and conditions, including atherosclerosis, arthritis, high blood pressure, elevated cholesterol levels, weight gain, and poor liver function.

The commission charged Aaron Co., of Palm Bay, Florida, and its owners, with disseminating deceptive advertising for colloidal silver and the company’s other products. FTC said the company’s ads falsely claimed that its colloidal silver product has been medically proven to kill over 650 disease-causing organisms in the body; is effective at curing diseases, such as cancer, multiple sclerosis, HIV infection, and AIDS; and was medically proven to work.

The commission said the company also falsely claimed its Ultimate Energizer product, which contains ephedra, is safe and has no adverse effects.

FTC’s settlement with Aaron requires the company to include affirmative disclosures concerning the serious risks associated with ephedra in all advertising and labeling of products containing the botanical. The commission said the warning that the company must use was developed by FDA. This warning alerts consumers that ephedra or ephedrine alkaloids can have dangerous effects on the central nervous system and heart and can result in serious injury, including heart attack, stroke, seizure, or death.

The commission’s complaint against Jaguar Enterprises of Mesquite, Texas, said the company made unsubstantiated claims that its Miracle Herbs product is effective in treating cancers of all types, AIDS, and bacterial and viral infections. FTC’s complaint also stated that Jaguar falsely represented that Miracle Herbs has been scientifically proven to be safe and effective, and that its electronic device products have been scientifically proven to kill bacteria, viruses, and parasites in the body.

FTC’s proposed settlement with Jaguar would prohibit the company from making the challenged claims or any other claim about the health benefits, performance, safety, or efficacy of its products or services without adequate substantiation. Jaguar must also offer refunds to consumers for any of its products that were challenged by FTC.

The commission noted that it files a complaint when it has "reason to believe" that the law has been violated and a proceeding seems to be in the public’s interest.

FTC stressed that a complaint is not a finding or ruling that the defendants have actually violated the law. A court must decide the case.