Supplement Manufacturer Fined for Making False Claims
LOS ANGELES--Makers of the Enforma weight loss system were fined $10 million as consumer redress for making unsubstantiated claims about the products. The Enforma weight loss system combines two products--a chitosan "fat blocker" and a pyruvate "exercise in a bottle." The Federal Trade Commission (FTC) ruled on April 25 that the claims being made about the products were false.
The parties held responsible by the FTC are Andrew Grey, president and chief executive officer of Enforma Natural Products Inc. and Fred Zinos, a former vice president of sales and marketing. Grey and Zinos were found guilty of making deceptive weight loss claims for the products such as, "Lose weight without diet or exercise" and "[this product] blocks fat so that it can never enter your body." The two also made product claims that the "Exercise in a Bottle" product increases metabolism because it "works on a cellular level, forcing every cell in your body to work, whether you're exercising or not. And when your cells are working, you are burning calories or losing fat."
Two Stipulated Final Orders were filed by the FTC--one for Grey and Zinos and one for the company--though both orders delineated the same settlement. The settlement includes prohibiting further unsubstantiated claims, adding a disclosure statement about eating less and exercising more to future weight loss claims, requiring scientific substantiation for future weight loss claims, and prohibiting future false claims about research, studies or tests.
Zinos is not required to make payments to the FTC, but Grey must pay $5 million within five days of entering the order and the other $5 million within six months. Until the entire amount is paid, the defendants must issue a promissory note to the FTC and surrender a security interest in all of the company's assets in order to assure payment. The FTC will use the $10 million to refund consumers that purchased the products before March 31, 2000. However, if the refund is not practical, the money will go to the United States Treasury.
"A manufacturer should have substantiation," said attorney Marc Ullman. "The FTC is active and an FTC Enforcement Action is a very serious matter. The days of the FTC routinely going away without seeking monetary relief are gone. Now, they routinely seek consumer redress."
After the FTC announcement, Enforma quickly put its own spin on the consumer redress issue. According to an Enforma press release, the $10 million has been "put aside" voluntarily, in order to offer consumers a refund in accordance with its 100 percent satisfaction policy. 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 is an admission of guilt.
Other chitosan manufacturers may already label products with the notice in advertising about using the product in conjunction with a diet and exercise program. "There are a lot of companies making claims that are not backed up by what we would call 'good science'--protocol that can be duplicated," said Bill Froese, marketing manager of PharmaNutrients Inc., www.pharmanutrients.com.
"Some of the chitosan products are also being sold as 'miracle pills' and at PharmaNutrients, our position is that there is no such thing as a miracle pill," Froese said. "It's unfortunate that our friends at Enforma have taken a slightly different position regarding the product. Chitosan has been proven to assist in weight loss, however, and we strongly recommend that consumers use it as part of a proper diet and exercise program."