FTC, Enforma Embroiled in Continuing Labeling Battle

January 14, 2002

5 Min Read
FTC, Enforma Embroiled in Continuing Labeling Battle

WASHINGTON--The Federal Trade Commission (FTC) announced Jan. 10 that it asked the courts to order Woodland Hills, Calif.-based Enforma Natural Products Inc., its president and chief executive officer Andrew Grey and its executive vice president of sales and marketing Michael Ehrman to show cause as to why they should not be held in civil contempt. FTC charges that, despite agreeing not to, the company continued to advertise two purported weight loss supplements--Fat Trapper Plus and Exercise in a Bottle--using unsubstantiated and misleading representations.

This case began almost two years ago, in May 2000, when the makers of the Enforma weight loss system were fined $10 million in consumer redress for making unsubstantiated claims about its products. The Enforma weight loss system combines two products--a chitosan "fat blocker" and a pyruvate "exercise in a bottle." FTC ruled on April 25, 2000, that the products' claims were false and misleading. The settlement included prohibiting the company from making further unsubstantiated claims; requiring that future claims carry a disclosure statement about eating less and exercising more; requiring scientific substantiation for future weight loss claims; and prohibiting future false claims about research, studies or tests.

At the time, Enforma released a statement that the $10 million had been "put aside" voluntarily as refund monies for consumers who were not 100-percent satisfied. In regard to settling the case, the company said it settled to avoid "costly legal battles" and that in no way does the settlement mean there was an admission of guilt.

According to FTC's newest charges, although Enforma (www.enforma2000.com) stopped broadcasting its two 30-minute infomercials on the two products after signing the order, the company continued to advertise Fat Trapper Plus and Exercise in a Bottle in other media, including a three-and-a-half minute abridged version of the infomercials on its currently disabled Web sites. Additionally, FTC alleged that the company's product names connoted that the supplements trapped fat and gave the same benefits as exercise. FTC's most recent complaints charge the company with not providing any "competent and reliable evidence that either product performs as represented, and are therefore violating the court's order," according to an FTC press release.

A federal district court is scheduled to review this case at a hearing on Feb. 4. Ultimately, FTC is seeking to excise the company's product names, Fat Trapper, Fat Trapper Plus and Exercise in a Bottle. If the excision is granted, FTC is also requesting that all company products bearing deceptive and misleading trade names be immediately recalled. Furthermore, FTC is asking for an accounting and disgorgement of all profits from sale of Fat Trapper, Fat Trapper Plus and Exercise in a Bottle since May 11, 2000.

According to Grey, FTC's accusations are baseless and even deceptive. He said that the company has followed FTC's 2000 orders, such as not labeling Exercise in a Bottle as a metabolism booster and adding the disclaimer that diet and exercise are required to lose weight. "We've adhered 100 percent to the consent decree, and more," he said "We are absolutely not going to settle this time. We need to be vindicated."

He also said the company has documentation of the clinical studies that support the product's main ingredients (chitosan and pyruvate), as does FTC. "The most appalling thing is that we settled [in May 200] with no admission of liability," he reported. "We thought we were settling, but we really haven't." Edward Glenn, Enforma's attorney, added that the company plans to file against FTC once it contacts the FTC scientific expert who evaluated the studies behind the two herbs.

The company and its principals are not the only ones in FTC's sights. In a complaint filed Aug. 31, 2000, FTC claimed that Steve Garvey, a former first baseman for the Los Angeles Dodgers and San Diego Padres, allegedly supported the supplements--though their efficacy was unsubstantiated--by appearing in the company's infomercial, on its Web site and in various TV and radio spots. In the latest action, as of Nov. 8, 2001, the judge denied Garvey's motion to dismiss the case against him and issued a 13-page opinion that the FTC believes will favor FTC's case against Garvey. According to David Frankel, an FTC staff attorney, the pretrial conference concerning the Garvey case will be heard Feb. 11. "He personally made many, many claims about the products," Frankel said. Even though Garvey has denied that he endorsed the products, he appears on the product packaging and has appeared in promotional tours touting that he and his wife have lost weight using the system, according to Frankel. The FTC is after Garvey for approximately $1.2 million that he made in royalties from the products, including accruing interest. The monies will be put toward consumer redress.

On Enforma's side, Glenn noted the company is concerned about FTC's actions with retailers concerning the products. "FTC, in late 2000 and early 2001, began calling various retailers--such as Albertsons and CVS/pharmacy--saying that the claims made in the products were unsubstantiated, which retailers could be made responsible for," Glenn said. "This obviously concerned the retailers."

FTC had not contemplated retail store sales until after the settlement, but Frankel reported that the settlement included every type of retail sale--be it through the Internet, infomercials or the store level. FTC then contacted retailers about Enforma's unsubstantiated claims on its packaging. "Many of those retailers took the products off the shelves," reported Frankel. "Most of [these retailers were] acting as good corporate citizens."

Enforma asked a California district judge to modify or clarify the order to make it clear that the order did not appear to retailers. FTC won the case, but the decision was appealed and is now waiting on judgment in the 9th Circuit Courts in California. In the eastern district of Virginia, Alexandria, Va.-based NACDS (National Association of Chain Drugstores) sued FTC to receive a declaratory judgment that the May 2000 settlement should not apply to its members. However, the case was thrown out of court since the California case had not been decided yet. In the meantime, according to Glenn, the California case has been put on the backburner, since it appears that FTC has made no further calls to retailers.

The latest complaint can be found on www.ftc.gov/opa/2002/01/enforma.htm.

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