Original Marketing Inc.; Proposed Consent Agreement with Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 932-3234]

Original Marketing Inc.; 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, the Florida-based

[[Page 27310]] corporation, two of its officers and an affiliated

advertising agency from making performance or benefit claims for any

weight-loss or weight-control product or program or acupressure device

unless the claims are true and substantiated by competent and reliable

scientific evidence. Also, the proposed consent agreement would

prohibit the respondents from misrepresenting any endorsement or

testimonial for any weight-loss or weight-control product or program or

any acupressure device as representing the typical or ordinary

experience of users. In addition, the individual respondents would be

required to post a $300,000 performance bond, or to pay that amount

into an escrow account, before marketing any weight-loss or weight-

control product or program or any acupressure device.

DATES: Comments must be received on or before July 24, 1995.

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

Room 159, 6th Street and Pennsylvania Avenue, NW., Washington, DC

20580.

FOR FURTHER INFORMATION CONTACT:

Richard Cleland, FTC/S-4002, Washington, D.C. 20580, (202) 326-3088.

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

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 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 Section 4.9(b)(6)(ii) of the Commission's Rules of

Practice (16 CFR 4.9(b)(6)(ii)).

In the matter of Original Marketing, Inc., d/b/a ACU-STOP 2000,

and Franklin & Joseph, Inc., corporations, Barry A. Weiss,

individually and as an officer and director of Original Marketing,

Inc., and Roger Franklin, individually and as an officer and

director of Original Marketing, Inc. and Franklin & Joseph, Inc.,

File No. 932-3234.

Agreement Containing Consent Order To Cease and Desist

The Federal Trade Commission having initiated an investigation of

certain acts and practices of Original Marketing, Inc. d/b/a Acu-Stop

2000 (``OMI'') and Franklin & Joseph, Inc., corporations; Barry A.

Weiss, individually and as an officer and director of Original

Marketing, Inc.; and Roger Franklin, individually and as an officer and

director of Original Marketing, Inc. and Franklin & Joseph, Inc.,

hereinafter sometimes referred to as proposed 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 Original Marketing, Inc. d/b/a

Acu-Stop 2000 and Franklin & Joseph, Inc., by their duly authorized

officers; Barry A. Weiss, individually and as an officer and director

of Original Marketing, Inc.; and Roger Franklin, individually and as an

officer and director of Original Marketing, Inc. and Franklin & Joseph,

Inc., and their attorney and counsel for the Federal Trade Commission

that:

1. Proposed respondent OMI is a corporation organized, existing and

doing business under and by virtue of the laws of the State of Florida,

with its office and principal place of business located at 11570 Wiles

Road, in the City of Pompano Beach, State of Florida.

Proposed respondent Franklin & Joseph, Inc. is a corporation

organized, existing and doing business under and by virtue of the laws

of the State of New York, with its office and principal place of

business located at 237 Mamaroneck Avenue, in the City of White Plains,

State of New York.

Proposed respondent Barry A. Weiss is an officer and director of

OMI. He formulates, directs and controls the policies, acts and

practices of OMI. He resides at 22471 Vista Wood Way, Boca Raton,

Florida.

Proposed respondent Roger Franklin is an officer and director of

OMI and Franklin & Joseph, Inc. He formulates, directs and controls the

acts and practices of said corporations. He resides at 33 Maplemoor

Lane, White Plains, New York.

2. Proposed respondents admit all the jurisdictional facts set

forth in the draft of complaint.

3. 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.

4. 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 draft of

complaint contemplated thereby, 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.

5. 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.

6. 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. 2.34 of the Commission's

Rules, the Commission may, without further notice to proposed

respondents, (1) issue its complaint corresponding in form and

substance with the draft of complaint and its decision containing the

following order to cease and desist in disposition of the proceeding

and (2) 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' addresses as stated in this agreement shall constitute

service. Proposed respondents waive any right they might 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 in the agreement may be

used to vary or contradict the terms of the order.

7. Proposed respondents have read the proposed complaint and order

contemplated hereby. They 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

For the purposes of this Order: [[Page 27311]]

1. ``Component and reliable scientific evidence'' shall mean 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.

2. ``Acupressure device'' shall mean any product, program, or

service that is intended to function by means of the principles of

acupressure.

I

It is ordered That respondents, Original Marketing, Inc. and

Franklin & Joseph, Inc., corporations, their successors and assigns,

and their officers; Barry A. Weiss, individually and as an officer and

director of Original Marketing, Inc.; Roger Franklin, individually and

as an officer and director of Original Marketing, Inc. and Franklin &

Joseph, Inc.; and respondents' agents, representatives and employees,

directly or through any partnership, corporation, subsidiary, division

or other device, in connection with the advertising, packaging,

labeling, promotion, offering for sale, sale, or distribution of the

AcuStop 2000 or any other acupressure device in or affecting commerce,

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

forthwith cease and desist from representing, in any manner, directly

or by implication, that

a. Such product causes significant weight loss;

B. Such product causes significant weight loss without the need to

diet or exercise;

C. Such product controls appetite or eliminates a person's craving

for food; or

D. Such product is scientifically proven to cause significant

weight loss or control appetite.

II

It is further ordered That respondents, Original Marketing, Inc.

and Franklin & Joseph, Inc., corporations, their successors and

assigns, and their officers; Barry A. Weiss, individually and as an

officer and director of Original Marketing, Inc.; Roger Franklin,

individually and as an officer and director of Original Marketing, Inc.

and Franklin & Joseph, Inc.; and respondents' agents, representatives

and employees, directly or through any partnership, corporation,

subsidiary, division or other device in connection with the

advertising, packaging, labeling, promotion, offering for sale, sale,

or distribution of any weight-loss or weight-control product or program

or any acupressure device in or affecting commerce, as ``commerce'' is

defined in the Federal Trade Commission Act, do forthwith cease and

desist from making any representation, directly or by implication,

regarding the performance, benefits, efficacy, or safety of such

product, program, or device unless such representation is true and

unless, at the time of making such representation, respondents possess

and rely upon competent and reliable scientific evidence that

substantiates the representation.

III

It is further ordered That respondents, Original Marketing, Inc.

and Franklin & Joseph, Inc., corporations, their successors and

assigns, and their officers; Barry A. Weiss, individually and as an

officer and director of Original Marketing, Inc.; Roger Franklin,

individually and as an officer and director of Original Marketing, Inc.

and Franklin & Joseph, Inc.; and respondents' agents, representatives

and employees, directly or through any partnership, corporation,

subsidiary, division or other device, in connection with the

advertising, packaging, labeling, promotion, offering for sale, sale,

or distribution of any weight-loss or weight-control product or program

or any acupressure device in or affecting commerce, as ``commerce'' is

defined in the Federal Trade Commission Act, do forthwith cease and

desist from representing, directly or by implication, that any

endorsement (as ``endorsement'' is defined in 16 C.F.R. Sec. 255.0(b))

of the product, program, or device represents the typical or ordinary

experience of members of the public who use the product, program, or

device unless this is the case.

IV

It is further ordered That respondents, Original Marketing, Inc.

and Franklin & Joseph, Inc., corporations, their successors and

assigns, and their officers; Barry A. Weiss, individually and as an

officer and director of Original Marketing, Inc.; Roger Franklin,

individually and as an officer and director of Original Marketing, Inc.

and Franklin & Joseph, Inc.; and respondents' agents, representatives

and employees, directly or through any partnership, corporation,

subsidiary, division or other device, in connection with the

advertising, packaging, labeling, promotion, offering for sale, sale,

or distribution of any weight-loss or weight-control product or program

or any acupressure device in or affecting commerce, as ``commerce'' is

defined in the Federal Trade Commission Act, do forthwith cease and

desist from misrepresenting, in any manner, directly or by implication,

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

test or study.

V

It is further ordered That respondents, and their successors and

assigns, are jointly and severally liable for, and shall pay refunds to

eligible consumers of Acu-Stop 2000 as provided herein. ``Eligible

consumer'' shall mean any person who purchases, or has purchased, an

Acu-Stop 2000 from respondents; who returns, or has returned, the

device to respondents requesting a refund prior to ninety (90) days

after the date this Order becomes final; and who has not previously

received a refund. ``Eligible consumer'' shall not include persons who

request a credit from a credit card issuer and who do not otherwise

request a credit or refund from respondents. Respondents shall provide

to the Commission all information necessary to identify eligible

consumers and to verify their eligibility.

A. Not later than the date this Order becomes final, respondents

shall deposit into an escrow account, to be established by the

Commission for the purpose of receiving payments due under the

provisions of this Order (``escrow account''), the sum of fifty

thousand dollars ($50,000.00). These funds, together with accrued

interest, less any amount necessary to pay the costs of administering

the escrow account and refund program provided herein, shall be used by

the Commission or its representative to pay refunds to those eligible

consumers who purchased an Acu-Stop 2000 from respondents prior to

January 1, 1995. Any funds remaining in the escrow account after all

refunds to consumers under this subparagraph have been paid shall be

paid to the United States Treasury.

At any time after this Order becomes final, the Commission may

direct the escrow agent to transfer funds from the escrow account,

including accrued interest, to the Commission to be distributed as

herein provided. Respondents shall be notified as to how the funds are

distributed, but shall have no right to contest the manner of

distribution chosen by the Commission. The Commission, or its

representative, shall, in its sole discretion, select the escrow agent.

Costs associated with the administration of the escrow account and

refund program provided herein, if any, shall be paid from funds in the

escrow account. [[Page 27312]]

Respondents relinquish all dominion, control and title to the funds

paid into the escrow account, and all legal and equitable title to the

funds shall vest in the Treasurer of the United States and in the

designated consumers. Respondents shall make no claim to or demand for

the return of the funds, directly or indirectly, through counsel or

otherwise; and in the event of bankruptcy of respondents, respondents

acknowledge that the funds are not part of the debtor's estate, nor

does the estate have any claim or interest therein.

B. Respondents shall pay from their own funds refunds to all

eligible consumers who are not paid from the escrow account provided

herein. This requirement shall include:

(1) all refund requests from eligible consumers who purchased an

Acu-Stop 2000 after January 1, 1995, and

(2) all refund requests under subparagraph A that exceed the amount

available in the escrow account.

All refunds required in subparagraph B.1 shall be paid within

thirty (30) days after the receipt of the request, or within thirty

(30) days after the date this Order becomes final, whichever is later.

All refunds required in subparagraph B.2 shall be paid within thirty

(30) days after notification to respondents that the funds available in

the escrow account to pay refunds have been depleted.

VI

It is further ordered That for three (3) years after this Order

becomes final, respondents, and their successors and assigns, shall

maintain documents and records demonstrating the manner and form of

respondents' compliance with Part V of this Order, and upon request

make available to the Commission, at a place it designates for

inspection and copying, copies of:

A. All documents and records evidencing the refunds respondents

paid, or charge card credits issued, to eligible consumers, as that

term is defined in Part V;

B. A list containing the name, mailing address, and purchase price

for each eligible consumer who requested a refund;

C. The name and last known address of each consumer who requested a

refund but was refused and the reason for each refusal to refund; and

D. Copies of all correspondence and other communications to, or

from, any consumers regarding a refund.

VII

It is further ordered the respondents Barry A. Weiss, Roger

Franklin, and their agents, representatives, and employees, directly or

through any partnership, corporation, subsidiary, division, joint

venture or other device, do forthwith cease and desist from

advertising, promoting, offering for sale, selling, or distributing any

weight-loss or weight-control product or program or any acupressure

device to the general public, unless, prior to advertising, promoting,

offering for sale, selling, or distributing to the general public any

such product, respondents Weiss and Franklin first obtain a performance

bond in the principal sum of three hundred thousand dollars ($300,000).

Said bond shall be conditioned upon compliance by respondents Weiss and

Franklin with the provisions of the Federal Trade Commission Act, and

with the provisions of this Order. The bond shall be deemed continuous

and remain in full force and effect as long as respondents Weiss and

Franklin continue to advertise, promote, offer for sale, sell, or

distribute any weight-loss or weight-control product or program or any

acupressure device, directly or indirectly, to the general public, and

for at least five (5) years after they have ceased any such activity.

The bond shall cite this Order as the subject matter of the bond and

provide surety against respondents' failure to pay consumer redress or

disgorgement as set forth herein. Such performance bond shall be an

influence agreement providing surety issued by a surety company that is

admitted to do business in a state in which respondents Weiss and

Franklin are doing business and that holds a Federal Certificate of

Authority as Acceptable Surety on Federal Bonding and Reinsuring.

Respondents Weiss and Franklin shall provide a copy of such

performance bond to the associate director of the Federal Trade

Commission's Division of Enforcement, 6th Street & Pennsylvania Avenue,

N.W., Washington, D.C. 20580, prior to the commencement of any business

for which such bond is required.

Provided, however, in lieu of a performance bond, respondents Weiss

and Franklin may establish and fund, pursuant to the terms set forth

herein, an escrow account in the principal sum of three hundred

thousand dollars ($300,000) in cash, or such other assets of equivalent

value, which the Commission, or its representative, in its sole

discretion may approve. Respondents Weiss and Franklin shall maintain

such amount in that account for as long as they continue to advertise,

promote, offer for sale, sell, or distribute any weight-loss or weight-

control product or program or any acupressure device, directly or

indirectly, to the general public, and for at least five (5) years

after they have ceased any such activity. Respondents Weiss and

Franklin shall pay all costs associated with the creation, funding,

operation, and administration of the escrow account. The Commission, or

its representative, shall, in its sole discretion, select the escrow

agent. The escrow agreement shall be in substantially the form attached

to this Order as Exhibit A.

The performance bond or escrow agreement shall provide that the

surety company or escrow agent, within thirty (30) days following

receipt of notice that a final judgment or an order of the Commission

against respondent Weiss and/or respondent Franklin for consumer

redress or disgorgement in an action brought under the provisions of

the Federal Trade Commission Act has been entered, or, in the case of

an order of the Commission, has become final, finding that Weiss and/or

Franklin has violated the terms of this Order or the Federal Trade

Commission Act, and determining the amount of consumer redress or

disgorgement to be paid, shall pay to the Commission so much of the

performance bond or funds of the escrow account as does not exceed the

amount of consumer redress or disgorgement ordered, and which remains

unsatisfied at the time notice is provided to the surety company or

escrow agent, provided that, if respondents have agreed to the entry of

a court order or an order of the Commission, a specific finding that

respondents violated the terms of this Order or the provisions of the

Federal Trade Commission Act shall not be necessary. A copy of the

notice provided for herein shall be mailed to respondent Weiss and/or

respondent Franklin at their last known address.

Respondents Weiss and Franklin may not disclose the existence of

the performance bond or escrow account to any consumer, or other

purchaser or prospective purchaser, to whom a covered product, program,

or device is advertised, promoted, offered for sale, sold, or

distributed, without also disclosing at the same time and in a like

manner that the performance bond or escrow account is required by order

of the Federal Trade Commission in settlement of changes that

respondents engaged in false and misleading representations.

VIII

It is further ordered That for five (5) 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 [[Page 27313]] Trade Commission

or its staff 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.

IX

It is further ordered That respondents, Original Marketing, Inc.

and Franklin & Joseph, Inc., shall:

A. Within thirty (30) days after service of this Order, provide a

copy of this Order to each of respondents' current principals,

officers, directors and managers, and to all personnel, agents, and

representatives having sales, advertising, or policy responsibility

with respect to the subject matter of this Order; and

B. For a period of five (5) years from the date of issuance of this

Order, provide a copy of this Order to each of respondents' future

principals, officers, directors, and managers, and to all personnel,

agents, and representatives having sales, advertising, or policy

responsibility with respect to the subject matter of this Order who are

associated with respondents or any subsidiary, successor, or assign,

within three (3) days after the person assumes his or her position.

X

It is further ordered That respondents, Original Marketing, Inc.

and Franklin & Joseph, Inc., shall notify the Federal Trade Commission

at least thirty (30) days prior to any proposed change in their

corporate structures, including but not limited to dissolution,

assignment, or sale resulting in the emergence of a successor

corporation, the creation or dissolution of subsidiaries or affiliates,

the planned filing of a bankruptcy petition, or any other corporate

change that may affect compliance obligations arising out of this

Order.

XI

It is further ordered That respondents, Barry A. Weiss and Roger

Franklin, shall, for a period of five (5) years from the date of

issuance of this Order, notify the Commission within thirty (30) days

of the discontinuance of his present business or employment and of his

affiliation with any new business or employment. Each notice of

affiliation with any new business or employment shall include

respondents' new business address and telephone number, current home

address, and a statement describing the nature of the business or

employment and his duties and responsibilities.

XII

It is further ordered That respondents, Original Marketing, Inc.

and Franklin & Joseph, Inc., corporations, their successors and

assigns, and their officers; Barry A. Weiss, individually and as an

officer and director of Original Marketing, Inc.; and Roger Franklin,

individually and as an officer and director of Original Marketing, Inc.

and Franklin & Joseph, Inc., shall, within sixty (60) days after

service of this Order, and at such other times as the Federal Trade

Commission may require, file with the Commission a report, in writing,

setting forth in detail the manner and form in which they have complied

with this Order.

Exhibit A

This Escrow Agreement, made and entered into this ______ day of

__________, ____, by and between __________________ (hereinafter

``__________''); and the Federal Trade Commission, an agency of the

Government of the United States of America, by and through

________________ (hereinafter ``FTC''); and ____________________

(hereinafter ``Escrow Agent'');

Witnesseth:

Whereas, the FTC and ____________ have entered into an Agreement

Containing Consent Order to Cease and Desist (hereinafter ``Consent

Order''), a copy of which is attached hereto as Exhibit A; and

Whereas, the Consent Order requires that __________ cease and

desist from advertising, promoting, offering for sale, selling, or

distributing any weight-loss or weight-control product or program or

any acupressure device to the general public unless ______ first

establishes and maintains an escrow account, under the terms and

conditions specified in the Consent Order;

Now, Wherefore, in accordance with the terms of the Consent Order,

which are incorporated herein by reference, the parties covenant and

agree as follows:

1. ________ shall establish an Escrow Account at

__________________, to be styled __________ Escrow Account,

________________, Escrow Agent. __________ shall deposit into the

Escrow Account an initial sum of at least three hundred thousand

dollars ($300,000.00) in cash, or other approved assets of equivalent

value. Thereafter, __________ shall deposit such additional amounts

into the Escrow Account as are necessary to maintain the total amount

in the Escrow Account at three hundred thousand dollars ($300,000.00).

2. The Escrow Agent shall be the sole signatory on the Escrow

Account and access to the funds held in that account shall be solely

through the Escrow Agent. It is understood by the parties to this

Escrow Agreement that upon the signing of this Agreement, ____________

relinquishes to the Escrow Agent, all legal title to the escrow funds,

except as to such amounts in the Escrow Account that are in excess of

three hundred thousand dollars ($300,000.00). Until and unless the

Escrow Account is terminated as provided for herein, ____________

agrees to make no claim to or demand for return of the funds, directly

or indirectly, through counsel or otherwise; and, in the event of

bankruptcy, ____________ acknowledges that the funds are not part of

____________'s estate, nor does the estate have any claim or interest

therein.

3. The Escrow Agent and the parties hereto agree that the escrow

funds shall be held only in accordance with the terms of the Consent

Order and the Escrow Agreement. __________ shall pay all costs

associated with the creation, funding, operation, and administration of

the Escrow Account as they become due. In the event that ____________

fails to pay such costs as they become due, the Escrow Agent shall pay

the costs from the interest earned on the escrow funds.

4. The Escrow Agent, within thirty days following receipt of notice

that a final judgment or an order of the Commission against

____________ for consumer redress or disgorgement in an action brought

under the provisions of the Federal Trade Commission Act has been

entered, or, in the case of an order of the Commission, has become

final, finding that ____ has violated the terms of the Consent Order or

the provisions of the Federal Trade Commission Act, and determining the

amount of consumer redress or disgorgement to be paid, which notice

shall also be mailed to ____________ at his last known address, shall

pay to the Commission so much of the funds of the Escrow Account as

does not exceed the amount of consumer redress or disgorgement ordered,

and which remains unsatisfied at the time notice is provided to the

Escrow Agent, provided that, If ____________ has agreed to the entry of

a court order or an order of the Commission, a specific finding that

____________ violated the terms of the Consent Order or the provisions

of the Federal Trade Commission Act shall not be necessary. The Escrow

Agent shall have the power to convert to cash so [[Page 27314]] much of

the Escrow Account assets as are necessary to satisfy the obligations

of the judgment or order .

5. The Escrow Account shall continue until at least five years

after ____________ last advertises, promotes, offers for sale, sells,

or distributes any product specified in the Consent Order, at which

time, if there are no pending FTC investigations, legal or

administrative actions by the FTC against ____________, or unsatisfied

obligations pursuant to a judgment or order described in paragraph 4

herein, for which a claim could be made against the escrow funds under

the terms of the Consent Order, the FTC shall, upon ____________'s

request, instruct the Escrow Agent to terminate the Escrow Account and

return the balance of the Escrow Account to ____________. At such time,

the Escrow Agent shall be fully and completely released from its agency

as herein described. The legal title to the escrow funds shall vest in

____________ at such time as the Escrow Agent, pursuant to instructions

from the FTC, returns the funds to ____________.

Witness the signatures of the parties, the day and year first above

written.

Date:

Signatures

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to

final approval, to a proposed consent order from proposed respondents

Original Marketing, Inc. d/b/a Acu-Stop 2000; Franklin & Joseph, Inc.;

Barry A. Weiss; and Roger Franklin.

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

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

Comments received during this period will become part of the public

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

agreement and the comments received and will decide whether it should

withdraw from the agreement and take other appropriate action or make

final the agreement's proposed order.

This matter concerns advertising related to the sale of an ear-mold

acupressure device, marketed under the name Acu-Stop 2000, which nests

in the ear. The Commission's Complaint charges that proposed

respondents Original Marketing, Inc. d/b/a Acu-Stop 2000; Franklin &

Joseph, Inc.; Barry A. Weiss; and Roger Franklin falsely represented

that the Acu-Stop 2000: (1) Causes significant weight loss; (2) causes

significant weight loss without the need to diet or exercise; and (3)

controls appetite or eliminates a person's craving for food.

The Complaint also alleges that proposed respondents falsely and

misleadingly represented that they possessed and relied upon a

reasonable basis when they made those claims. The Complaint further

alleges that proposed respondents falsely represented that the Acu-Stop

2000 is scientifically proven to cause significant weight loss and

control appetite. Finally, the Complaint alleges that proposed

respondents falsely represented that testimonials from consumers

appearing in advertisements for the Acu-Stop 2000 reflect the typical

or ordinary experience of members of the public who have used the

device.

The proposed consent order contains provisions designed to remedy

the violations charged and to prevent proposed respondents from

engaging in similar acts in the future.

Part I of the proposed order prohibits proposed respondents from

representing that the Acu-Stop 2000 or any other acupressure device:

(1) Causes significant weight loss; (2) causes significant weight loss

without the need to diet or exercise; (3) controls appetite or

eliminates a person's craving for food; or (4) is scientifically proven

to cause significant weight loss and control appetite. The order

defines ``acupressure device'' as ``any product, program, or service

that is intended to function by means of the principles of

acupressure.'' Part II requires proposed respondents to possess

competent and reliable scientific evidence before making

representations regarding the performance, benefits, efficacy, or

safety of any weight-loss or weight-control product or program or any

acupressure device. Part III prohibits proposed respondents from

falsely claiming that endorsements or testimonials for any weight-loss

or weight-control product or program or any acupressure device

represent the typical or ordinary experience of members of the public

who use the product, program, or device. Part IV prohibits proposed

respondents from misrepresenting the results of tests or studies for

any weight-loss or weight-control product or program or any acupressure

device.

Part V holds proposed respondents jointly and severally liable for,

and requires them to pay, refunds to all purchasers of the Acu-Stop

2000 who return or have returned the device for a refund. Part V.A.

requires respondents to deposit $50,000 into an escrow account for

payment of refunds to eligible consumers who purchased the device prior

to January 1, 1995, and who previously have requested a refund or do so

within ninety days after the proposed order becomes final. Part V.B.

requires proposed respondents to pay, out of their own funds, all

refund requests from eligible consumers that exceed $50,000 and all

such requests for purchases made after January 1, 1995. Together, these

two provisions require proposed respondents to pay all existing refund

requests and future requests made up to ninety days after the proposed

order becomes final. Part VI requires that proposed respondents

maintain records demonstrating the manner and form of their compliance

with the requirement that they make refunds.

Part VII requires that proposed respondents Weiss and Franklin post

a bond or fund an escrow account in the amount of $300,000 prior to the

future marketing any weight-loss or weight-control product or program

or any acupressure device.

Part VIII requires proposed respondents to maintain, for five (5)

years, all materials that support, contradict, qualify, or call into

question any representations they make which are covered by the

proposed order. Part IX requires proposed respondents Original

Marketing, Inc. and Franklin & Joseph, Inc. to distribute a copy of the

order to current and future principals, officers, directors, and

managers, as well as to any employees having sales, advertising, or

policy responsibility with respect to the subject matter of the order.

Under Part X of the proposed order, proposed respondents Original

Marketing, Inc. and Franklin & Joseph, Inc. shall notify the Federal

Trade Commission at least thirty (30) days prior to any proposed change

in their corporate structures that may affect compliance with the

order's obligations. Part XI requires that proposed respondents Weiss

and Franklin, for a period of five (5) years, notify the Commission of

any change in their business or employment. Part XII obliges proposed

respondents to file compliance reports with the Commission.

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

proposed order, and it is not 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. 95-12588 Filed 5-22-95; 8:45 am]

BILLING CODE 6750-01-M