United States: Direct Mail Supplement Marketer Settles With FTC

$3.7 million judgment hits Health Research Laboratories for faux science journals

Step Right Up!

Arthritis, aching joints, obesity, Alzheimer's, faulty memory, cognitive weakness: This was the ambitious slate of illnesses and symptoms that Health Research Laboratories (HRL) and Kramer Duhon, its owner and president, claimed to cure.

In a complaint filed on Nov. 30, 2017, the Federal Trade Commission (FTC) accused HRL, whose products BioTherapex and NueroPlus sold for nearly $40 per bottle, of appealing to consumers through direct mail marketing that copied the look and feel of science journals. HRL's materials included fake testimonials and nonexistent medical authorities. One BioTherapex advertisement even touted a 1,200-subject study that turned out to never have occurred.

But Wait, There's More!

The FTC also took aim at a slew of other alleged violations. HRL, the FTC claims, enrolled customers in auto-renewal plans without sufficient notice, charging consumer credit cards without permission (a violation of the Electronic Fund Transfer Act), misrepresenting its supposedly risk-free trial period and violating the Telemarketing Sales Rule.

HRL moved to settle the charges, leading to a comprehensive court order that put the company's claims in fetters.

The Takeaway

The company and its owner are forbidden to assert any of the FTC's seven "gut check" claims – a set of advertising claims about weight loss that the FTC has defined as "always false." These claims include weight loss of two pounds or more a week for a month without exercise or diet, permanent weight loss after the product is no longer used and substantial weight loss for any user. Weight loss and health and fitness advertisers should take note.

The challenged claims in the complaint are also verboten unless HRL can produce actual scientific evidence of their veracity. In addition, HRL is forbidden from misrepresenting trial offers, refunds and other financial aspects of their product slate. The judgment also hits the company with a $3.7 million dollar fee (limited, upon payment, to $800,000). Advertisers must have adequate substantiation for claims made, with health claims requiring a higher level of validity than claims on other products.

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