American Institute of Habit Control, Inc., et al.; Proposed Consent Agreement With Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 922-3290]

American Institute of Habit Control, Inc., et al.; Proposed

Consent Agreement With Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting

unfair acts and practices and unfair methods of competition, this

consent agreement, accepted subject to final Commission approval, would

prohibit, among other things, a Miami, Florida based company from

making any representation about the relative or absolute performance or

efficacy of any smoking cessation or weight loss program, unless they

possess and rely upon competent and reliable scientific evidence to

substantiate the representation.

DATES: Comments must be received on or before May 3, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Matthew Daynard, FTC/H-200, Washington, DC 20580. (202) 326-3291.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the

Commission's Rules of Practice (16 CFR 2.34), notice is hereby given

that the following consent agreement containing a consent order to

cease and desist, having been filed with and accepted, subject to final

approval, by the Commission, has been placed on the public record for a

period of sixty (60) days. Public comment is invited. Such comments or

views will be considered by the Commission and will be available for

inspection and copying at its principal office in accordance with

Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR

4.9(b)(6)(ii)).

In the matter of American Institute of Habit Control, Inc., a

corporation, and Steven Present, individually and as an officer of

said corporation.

File No. 922 3290.

Agreement Containing Consent Order to Cease and Desist

The Federal Trade Commission having initiated an investigation of

certain acts and practices of American Institute of Habit Control,

Inc., a corporation, and Steven Present, individually and as an officer

of said corporation (``proposed respondents'' or ``respondents''), and

it now appearing that proposed respondents are willing to enter into an

agreement containing an order to cease and desist from the use of the

acts and practices being investigated.

It is hereby agreed by and between American Institute of Habit

Control, Inc., by its duly authorized officer, and Steven Present,

individually and as an officer of said corporation, and their attorney,

and counsel for the Federal Trade Commission that:

1. Proposed respondent American Institute of Habit Control, Inc.,

is a Florida corporation, with its principal office or place of

business at 9655 South Dixie Highway, Miami, Florida 33156.

2. Proposed respondent Steven Present is the sole officer, director

and shareholder of said corporation. He formulates, directs and

controls the acts and practices of said corporation and his address is

the same as that of said corporation.

3. Proposed respondents admit all the jurisdictional facts set

forth in the attached draft complaint.

4. Proposed respondents waive:

(a) Any further procedural steps;

(b) The requirement that the Commission's decision contain a

statement of findings of fact and conclusions of law; and

(c) All rights to seek judicial review or otherwise to challenge or

contest the validity of the order entered pursuant to this agreement;

and

(d) Any claim under the Equal Access to Justice Act, 5 U.S.C. 504.

5. This agreement shall not become part of the public record of the

proceeding unless and until it is accepted by the Commission. If this

agreement is accepted by the Commission, it, together with the attached

draft complaint, will be placed on the public record for a period of

sixty (60) days and information in respect thereto publicly released.

The Commission thereafter may either withdraw its acceptance of this

agreement and so notify the proposed respondents, in which event it

will take such action as it may consider appropriate, or issue and

serve its complaint (in such form as the circumstances may require) and

decision, in disposition of the proceeding.

6. This agreement is for settlement purposes only and does not

constitute an admission by proposed respondents of facts, other than

jurisdictional facts, or of violations of law as alleged in the draft

of complaint here attached.

7. This agreement contemplates that, if it is accepted by the

Commission, and if such acceptance is not subsequently withdrawn by the

Commission pursuant to the provisions of Sec. 2.24 of the Commission's

Rules, the Commission may, without further notice to proposed

respondents: (a) Issue its complaint corresponding in form and

substance with the attached draft complaint and its decision containing

the following order to cease and desist in disposition of the

proceeding; and (b) make information public in respect thereto. When so

entered, the order to cease and desist shall have the same force and

effect and may be altered, modified or set aside in the same manner and

within the same time provided by statute for other orders. The order

shall become final upon service. Delivery by the U.S. Postal Service of

the complaint and decision containing the agreed-to order to proposed

respondents' address as stated in this agreement shall constitute

service. Proposed respondents waive any right they may have to any

other manner of service. The complaint may be used in construing the

terms of the order, and no agreement, understanding, representation, or

interpretation not contained in the order or the agreement may be used

to vary or contradict the terms of the order.

8. Proposed respondents have read the attached draft complaint and

the following order. Proposed respondents understand that once the

order has been issued, they will be required to file one or more

compliance reports showing that they have fully complied with the

order. Proposed respondents further understand that they may be liable

for civil penalties in the amount provided by law for each violation of

the order after it becomes final.

Order

Definition

For the purposes of this Order, ``competent and reliable scientific

evidence'' shall men those tests, analyses, research, studies, or other

evidence based on the expertise of professionals in the relevant area,

that has been conducted and evaluated in an objective manner by persons

qualified to do so, using procedures generally accepted in the

profession to yield accurate and reliable results.

I

It is ordered that respondents American Institute of Habit Control,

Inc., a corporation, its successors and assigns, and its officers, and

Steven Present, individually and as an officer and director of said

corporation, and respondents' agents, representatives and employees,

directly or through any corporation, subsidiary, division, or other

device, in connection with the advertising, promotion, offering for

sale, or sale of any smoking cessation program or weight loss program,

including any such program that uses hypnosis, in or affecting

commerce, as ``commerce'' is defined in the Federal Trade Commission

Act, do forthwith cease and desist from:

A. Representing, directly or by implication, that the U.S. Surgeon

General, in the 1989 U.S. Surgeon General's Report on Smoking, Reducing

the Health Consequences of Smoking: 25 Years of Progress, states that

the group hypnosis method used by respondents is one of the most

effective ways to stop smoking.

B. Representing, directly or by implication, that ninety-seven

percent of the participants who attend respondents' stop smoking

seminars permanently abstain from smoking after those seminars, unless

such is the case.

C. Making any representation, directly or any implication, about

the relative or absolute performance or efficacy of any smoking

cessation program or weight loss program, unless, at the time of making

any such representation, respondents possess and rely upon competent

and reliable scientific evidence substantiating the representation.

D. Misrepresenting, directly or by implication, the existence,

contents, validity, results, conclusions, or interpretations of any

test, study, survey or report.

E. Misrepresenting, directly or by implication, the performance or

efficacy of any smoking cessation program or weight loss program.

II

It is further ordered that for three (3) years after the last date

of dissemination of any representation covered by this Order,

respondents, or their successors and assigns, shall maintain and upon

request make available to the Federal Trade Commission for inspection

and copying:

A. All materials that were relied upon in disseminating such

representation; and

B. All tests, reports, studies, surveys, demonstrations or other

evidence in their possession or control that contradict, qualify, or

call into question such representation, or the basis relied upon for

such representation, including complaints from consumers.

III

It is further ordered that respondents shall notify the Commission

at least thirty (30) days prior to the effective date of any proposed

change in the corporate respondent such as dissolution, assignment, or

sale resulting in the emergence of a successor corporation(s), the

creation or dissolution of subsidiaries, or any other change in the

corporation that may affect compliance obligations arising out of this

Order.

IV

It is further ordered that the individual respondent named herein

shall promptly notify the Commission of the discontinuance of his

present business or of his affiliation with the corporate respondent.

In addition, for a period of three (3) years from the date of service

of this Order, the respondent shall promptly notify the Commission of

each affiliation with a new business or employment that involves a

smoking cessation program or a weight loss program. Each such notice

shall include the respondent's new business address and a statement of

the nature of the business or employment in which the respondent is

newly engaged as well as a description of the respondent's duties and

responsibilities in connection with the business or employment. The

expiration of the notice provision of this paragraph shall not affect

any other obligation arising under this Order.

V

It is further ordered that respondents shall distribute a copy of

this Order to each of its officers, agents, representatives,

independent contractors and employees who are involved in the

preparation and placement of advertisements or promotional materials;

and, for a period of three (3) years from the date of entry of this

Order, distribute same to all future such officers, agents,

representatives, independent contractors and employees.

VI

It is further ordered that respondents shall, within sixty (60)

days after the date of services of this Order, file with the Commission

a report, in writing, setting forth in detail the manner and form in

which they have complied with this Order.

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement to a

proposed consent order from American Institute of Habit Control, Inc.

(hereinafter ``AIHC'') and its President, Steven Present, marketers of

the Present Seminar, a single, two-and-a-half-hour, group hypnosis

session program for smoking cessation and weight loss. The Present

Seminar is offered to the public nationwide by Steven Present at hotel

locales.

The proposed consent order has been placed on the public record for

sixty (60) days for the reception of comments by interested persons.

Comments received during this period will become part of the public

record. After (60) days, the Commission will again review the agreement

and will decide whether it should withdraw from the agreement or make

final the agreement's proposed order.

The Commission's complaint charges that the proposed respondents

deceptively advertised: (1) The likelihood of success in achieving the

and maintaining abstinence from smoking cigarettes and weight loss; and

(2) the effectiveness of proposed respondents' smoking cessation

methods in leading consumers to abstain from smoking, including the

effectiveness of proposed respondents' programs compared to other

smoking cessation programs.

Success

The complaint against AIHC and Steven Present alleges that the

proposed respondents made false claims and failed to possess a

reasonable basis for other claims they made regarding the success of

their seminar participants in quitting smoking and achieving and

maintaining weight loss.Through advertisements placed in various media

in advance of their seminars, proposed respondents represented that 97

percent of their seminar participants permanently abstain from smoking

after attending those seminars. The complaint alleges that this claim

is false.

Proposed respondents further represented through their

advertisements that seminar participants: (1) Are cured of smoking

addiction and permanently abstain from smoking cigarettes; (2) are

cured of smoking addiction without experiencing withdrawal, stress or

weight gain; and (3) achieve and maintain weight loss.

The Commission believes that these success claims for seminar

attendees' smoking cessation, weight loss and maintenance of achieved

weight loss are deceptive because proposed respondents at the time they

made the claims did not possess adequate substantiation for those

claims.

The proposed consent order seeks to address the alleged success

misrepresentations cited in the accompanying complaint in three ways.

First, the order (Part I.C.) requires proposed respondents to possess a

reasonable basis consisting of competent and reliable scientific

evidence substantiating any claim about the performance or efficacy of

any smoking cessation or weight loss program.

Second, the proposed order (Part I.B.) prohibits proposed

respondents from representing that 97 percent of their seminar

attendees permanently abstain from smoking after those seminars, unless

that is the case.

Finally, the proposed order (Part I.E.) generally prohibits

proposed respondents from misrepresenting the performance or efficacy

of any smoking cessation or weight loss program.

Efficacy

The Commission's complaint further alleges that proposed

respondents made false claims and failed to possess a reasonable basis

for other claims they made regarding relative ability of their hypnosis

program to lead consumers to quit smoking. AIHC and Steven Present

represented through their advertising that the U.S. Surgeon General, in

the 1989 U.S. Surgeon General's Report on Smoking, Reducing the Health

Consequences of Smoking; 25 Years of Progress, states that the group

hypnosis method used by respondents is one of the most effective ways

to stop smoking. The complaint alleges that this claim is false,

because the cited Report does not state that proposed respondents'

hypnosis method is one of the most effective ways to stop smoking.

Proposed respondents further represented through their

advertisements that their single-session, group hypnosis seminar is

more efficacious for smoking cessation than other smoking cessation

methods. The Commission believes that this comparative efficacy claim

for proposed respondents' hypnosis program is deceptive because

proposed respondents at the time they made the claim did not possess

adequate substantiation for the claim.

To address these efficacy misrepresentations, the proposed order

(Part I.A.) prohibits AIHC and Steven Present from representing that

the U.S. Surgeon General, in the 1989 U.S. Surgeon General's Report on

Smoking, Reducing the Health Consequences of Smoking: 25 Years of

Progress, states that the group hypnosis method used by respondents is

one of the most effective ways to stop smoking. The proposed order

(Part I.D.) further generally prohibits proposed respondents from

misrepresenting the existence, contents, validity, results,

conclusions, or interpretations of any test, study, survey, or report.

Finally, the order (Part I.C.) requires proposed respondents to possess

and rely upon competent and reliable scientific evidence substantiating

any representation about the relative or absolute performance or

efficacy of any smoking cessation or weight loss program, before they

make such a claim.

The purpose of this analysis is to facilitate public comment on the

proposed order, and it is not intended to constitute an official

interpretation of the agreement and proposed order, or to modify in any

way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 94-4964 Filed 3-3-94; 8:45 am]

BILLING CODE 6750-01-M