WASHINGTON--The Federal Trade Commission (FTC) reached a settlement with Canoga Park, Calif.-based Vital Dynamics Inc. (dba ISIS), manufacturer of The Isis System breast enhancement product. Under terms of the settlement, each of the three company officers will pay approximately $16,667 in consumer redress for a total of $50,000. This amount was based upon the defendants' financial conditions, according to FTC, and should the courts find these conditions were misrepresented, the officers--Geoffrey V. Knight, Mark D. Berman and Allen Smith--will be required to pay the full amount of consumer redress: $22 million.
The consent order, announced on Dec. 26, requires that the defendants possess competent and reliable scientific evidence before making the types of claims challenged in the complaint. "Companies that reach this kind of agreement do so because they have been unable to convince the commission staff that they can substantiate their claims and don't want to take the risk of engaging in litigation," said Marc Ullman, partner at New York's Ullman, Shapiro & Ullman. "These agreements contain a clause that specifically says if you market any dietary supplement or similar device, you must possess substantiation. And that becomes part of the court order, and there are severe penalties for violating that provision."
The company's advertising included claims that the product could enlarge breast size by a cup or more; that it would tone and firm the breast; that it had a high success rate; that increased breast size would be maintained after six months of use; and that Isis was safe. In regard to safety, the FTC complaint alleges the defendants' claims were false regarding Isis had no side effects. FTC stated the defendants received hundreds of complaints about side effects, including headache, nausea and allergic reactions. In addition, the complaint alleges that the defendants falsely claimed that dissatisfied consumers could easily obtain full refunds.
The stipulated settlement requires the defendants to possess competent and reliable scientific evidence before making any claims in connection with any product containing one or more of the ingredients in Isis. The settlement further requires the defendants to possess competent and reliable scientific evidence before making any future claims about the benefits, performance, efficacy, safety or side effects of any service, therapy, dietary supplement, food, drug, cosmetic or device. It also prevents the defendants from misrepresenting any refund policy in the future.
"This should serve as another general warning to people marketing dietary supplements that they need to have substantiation for their claims," Ullman said. "The more outrageous the claim, the more likely [the companies] are to have the FTC put them to the proof."