FTC Targets Bogus Anti-Aging Claims for Pills and Sprays
Promising Human Growth Hormone Benefits
Settlement Provides Up To $20 Million In Consumer Redress
FTC News Release
June 9, 2005
Two Florida businesses have agreed to a federal court order requiring them to pay up to $20 million in consumer redress — the largest monetary judgment ever obtained in an FTC health fraud case — to settle charges that they deceptively claimed that their pills and sprays would increase consumers' human growth hormone (HGH) levels and provide anti-aging benefits, including weight loss and increased cognitive function. In addition, the Commission has issued warning letters to more than 90 Internet marketers making similar claims.
"Early explorers searched without success for a fountain of youth, and modern marketers promise that it can be found in pills and sprays," said Lydia Parnes, Director of the FTC's Bureau of Consumer Protection. "Those promises are illusory. Unfortunately, no pill or spray can turn back the hands of time."
The defendants named in the FTC's complaint are two Destin, Florida, corporations, Great American Products, Inc. (GAP) and Physician's Choice, Inc. (PCI); and two individuals, Stephan Karian and Michael Teplitsky, M.D., also known as Michael Teplisky. Karian is an officer of both corporations and Teplitsky formulated PCI's product line and appears in its advertising. According to the FTC, the defendants' advertising deceptively claimed that two dietary supplements and two sublingual (under-the-tongue) sprays would increase blood levels of HGH and provide a wide variety of anti-aging benefits. The defendants' HGH enhancers typically sold for $100 for a three-month supply; total sales exceeded $70 million. The complaint also challenges health benefit claims for four additional products and alleges that the defendant's radio and television infomercials had deceptive formats. In addition, the complaint alleges that the defendants violated the Telemarketing Sales Rule (TSR) when they sold additional products to consumers who called to order the defendants' products.
The complaint alleges that ads for the dietary supplements Ultimate HGH and Super HGH Booster and the sublingual sprays Master HGH and Super HGH promise that these products will significantly increase growth hormone levels; provide the benefits purportedly shown in various studies involving prescription-only HGH injections; and provide physical benefits including reduced fat, cholesterol, and blood pressure, increased muscle mass, and improved cognitive, immune, and sexual function. According to the FTC, these claims are false or unsubstantiated.
The FTC's complaint also alleges that GAP, PCI, Karian, and Teplitsky made deceptive claims that Fat Blaster and Super Carbo Blocker cause weight loss by suppressing appetite, reducing the conversion of carbohydrates to fats, and enhancing metabolism; and that Ultimate Wild Oregano Oil and Super Wild Oregano Oil prevent colds and flu and, when taken orally, treat and relieve bacterial and viral infections and their symptoms. The complaint further alleges that defendants GAP, PCI, Karian, and Teplitsky falsely represented that programs for their products are independent radio or television shows when, in fact, they are paid-for commercials. Finally, the complaint alleges that the defendants violated the TSR by failing to obtain express, informed consent to charge consumers' credit cards when "upselling" additional products after a first telemarketing sale was completed.
The FTC and the defendants have agreed to an order to settle the complaint allegations. It requires that future claims for HGH supplements, HGH sprays, Fat Blaster/Super Carbo Blocker, wild oregano oil products, or any dietary supplement, food, or drug, or any service purporting to provide health-related benefits, be true, non-misleading, and substantiated. It further prohibits the defendants from misrepresenting test results; prohibits the defendants from misrepresenting that an ad is not paid-for; and requires disclosures regarding the paid-for nature of long-form radio and television advertisements. The settlement prohibits the defendants from violating the TSR, including TSR provisions requiring express informed consent of the consumer when "upselling" additional products after a first telemarketing sale has been completed.
The order requires the defendants to pay up to $20 million in consumer redress. It requires an immediate payment of $6.5 million and provides for establishment of a consumer redress program to be operated by the FTC. The order requires that the defendants pay as much as an additional $13.5 million, depending upon how many eligible purchasers submit redress requests. Consumers who are eligible for redress will be contacted by the FTC within the next 45 days.
The settlement also contains two separate avalanche clauses providing for a total potential liability of $80 million — an amount representing total product sales — in the event that the defendants misrepresented their finances. Finally, it contains various record-keeping requirements to assist the FTC in monitoring compliance with the order.
The defendants' practices were the subject of a referral to the FTC from the Electronic Retailing Self-Regulation Program.
The Commission vote authorizing staff to file the complaint and proposed stipulated orders was 5-0. The complaint and stipulated order was entered by the US District Court for the Northern District of Florida on May 20, 2005.
- Warning Letter.
- Federal Trade Commission, Plaintiff, vs. Great American Products, Physician's Choice, Stephan Karian, and Michael Teplitsky (a/k/a Michael Teplisky), Defendants, United States District Court for the Northern District of Florida, Civil Action No. 3:05-CV-00170-RV, FTC File No. 032-3247.
This page was posted on October 2, 2005.