European Body Concepts, Inc.; Proposed Consent Agreement With Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 932-3321]

European Body Concepts, 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, a suburban Washington, DC Based salon and

its president from making false and unsubstantiated claims that their

body wrap would cause weight-loss; would eliminate cellulite; and is

completely safe for all users. In addition, it would require the

respondents to convey prominent safety warnings to their customers in

certain circumstances.

DATES: Comments must be received on or before June 12, 1995.

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:

Nancy S. Warder, FTC/S-4002, Washington, DC 20580. (202) 326-3048.

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 European Body Concepts, Inc., Maryland

corporation, European Body Concepts, Inc., a Virginia corporation,

European Body Concepts, Inc., a North Carolina corporation, and

James Marino, individually and as an officer of said corporations.

Agreement Containing Consent Order to Cease and Desist

The Federal Trade Commission having initiated an investigation of

European Body Concepts, Inc., a Maryland corporation, European Body

Concepts, Inc., a Virginia corporation, European Body Concepts, Inc., a

North Carolina corporation, and James Marino, individually and as an

officer of said corporations (``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 European Body Concepts, Inc., a

Maryland corporation, by its duly authorized officer, European Body

Concepts, Inc., a Virginia corporation, by its duly authorized officer,

European Body Concepts, Inc., a North Carolina corporation, by its duly

authorized officer, and James Marino, individually and as an officer of

said corporations, and their attorney, and counsel for the Federal

Trade Commission that:

1. Proposed respondent European Body Concepts, Inc., a Maryland

corporation, is organized, exists and does business under and by virtue

of the laws of the State of Maryland, with its former office and

principal place of business located at 1 Central Plaza, Suite 907,

11300 Rockville Pike, Rockville, Maryland 20852.

Proposed respondent European Body Concepts, Inc., a Virginia

corporation, is organized, exists and does business under and by virtue

of the laws of the State of Virginia, with its former office and

principal place of business located at 6564 Loisdale Court, Suite 420,

Springfield, Virginia 22150. [[Page 18407]]

Proposed respondent European Body Concepts, Inc., a North Carolina

corporation, is organized, exists and does business under and by virtue

of the laws of the State of North Carolina, with its former office and

principal place of business located at 1515 Mockingbird Lane, Suite

410, Charlotte, North Carolina 28209.

Proposed respondent James Marino is or was at relevant times herein

an officer of said corporations. He formulated, directed and controlled

the policies, acts and practices of said corporations and his address

is 11940 Alpharetta Highway, Suite 907, Alpharetta, Georgia 30201.

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 circumstances may require) and

decision in disposition of this proceeding.

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

constitute an admission by proposed respondents that the law has been

violated as alleged in the draft of complaint, or that the facts as

alleged in the draft of complaint, other than the jurisdictional facts,

are true.

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 provision of Sec. 2.34 of the Commission's

rules, the Commission may, without further notice to the 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 with 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 Edward J.

Carnot, counsel for proposed respondents, at 1370 Piccard Drive, Suite

290, Rockville, Maryland 20850, 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 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 purposes of this Order:

1. ``Clearly and prominently'' means as follows:

A. In a television or videotape advertisement, the disclosure shall

be presented simultaneously in both the audio and video portions of the

advertisement. The audio disclosure shall be delivered in a volume and

cadence sufficient for an ordinary consumer to hear and comprehend it.

The video disclosure shall be of a size and shade, and shall appear on

the screen for a duration, sufficient for an ordinary consumer to read

and comprehend it.

B. In a radio advertisement, the disclosure shall be delivered in a

volume and cadence sufficient for an ordinary consumer to hear and

comprehend it.

C. In a print advertisement the disclosure shall be in at least

twelve (12) point type, in print that contrasts with the background

against which it appears, and in a location that is sufficiently

noticeable that the ordinary consumer will see and read it.

2. ``Competent and reliable scientific evidence'' means 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.

3. ``European Body Wrap treatment'' means the treatment used at

European Body Concepts centers during which clients are wrapped in

medical bandages and placed in vinyl body suits.

I

It is ordered that respondents European Body Concepts, Inc., a

Maryland corporation, European Body Concepts, Inc., a Virginia

corporation, European Body Concepts, Inc., a North Carolina

corporation, their successors and assigns, and their officers, James

Marino, individually and as an officer and director of said

corporations; and respondents' agents, representatives and employees,

directly or through any partnership, corporation, subsidiary, division

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

offering for sale, sale or distribution of the European Body Wrap

treatment or any substantially similar treatment 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 treatment causes weight loss;

B. Such treatment causes weight loss without diet or exercise;

C. Such treatment causes fast or easy weight loss;

D. Such treatment eliminates cellulite;

E. Such treatment causes weight loss at specific areas of the body;

F. Users of such treatment are successful in maintaining their

weight loss;

G. Users of such treatment are successful in maintaining their inch

loss; or

H. Such treatment is completely safe for all users.

II

It is further ordered that respondents European Body Concepts,

Inc., a Maryland corporation, European Body Concepts, Inc., a Virginia

corporation, European Body Concepts, Inc., a North Carolina

corporation, their successors and assigns, and their officers, James

Marino, individually and as an officer and director of said

corporations; and respondents' agents, representatives and employees,

directly or through any [[Page 18408]] partnership, corporation,

subsidiary, division or other device, in connection with the

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

European Body Wrap treatment 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 treatment causes users to lose inches from their body

measurements;

B. Such treatment causes inch loss without diet or exercise;

C. Such treatment causes fast or easy inch loss; or

D. Such treatment causes reduction in the size of specific areas of

the body;

unless, (1) such representation is true, and at the time of making such

representation, respondents possess and rely upon competent and

reliable scientific evidence that substantiates the representation; and

(2) respondents disclose, clearly and prominently, that: (a) Any inch

loss or reduction in body size will be temporary; provided, however,

that this disclosure shall not be required if respondents possess and

rely upon competent and reliable scientific evidence demonstrating that

any such inch loss or reduction in body size will not be temporary; and

(b) such treatment does not cause weight loss; provided, however, that

this disclosure shall not be required if respondent possess and rely

upon competent and reliable scientific evidence demonstrating that such

treatment causes weight loss.

III

It is Further Ordered that respondents European Body Concepts,

Inc., a Maryland corporation, European Body Concepts, Inc., a Virginia

corporation, European Body Concepts, Inc., a North Carolina

corporation, their successors and assigns, and their officers, James

Marino, individually and as an officer and director of said

corporations; and respondents' agents, representatives and employees,

directly or through any partnership, corporation, subsidiary, division

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

offering for sale, sale or distribution of any body wrap treatment or

any substantially similar treatment in or affecting commerce, as

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

forthwith cease and desist from:

A. Making any representation, directly or by implication, regarding

the safety of any such treatment, unless respondents disclose, clearly

and prominently, and in close proximity to such representation that the

treatment may be dangerous to the health of people with heart disease,

high or low blood pressure, or diabetes and that any such person should

consult a doctor before using the treatment;

B. Failing to disclose prior to purchase the warning set forth

below to each prospective user of any such treatment

(i) By including the warning in the program description brochure

delivered to each such person, with the warning printed in bold on the

front panel in ten (10) point type surrounded by a bold two (2) point

rule, in print that contrasts with the background against which it

appears; or

(ii) If respondents cease to provide prospective users with a

program description brochure, by delivering to each such person a five

(5) by eight (8) inch card on which the warning and nothing else is

printed in twelve (12) point type:

``CAUTION: If you suffer from heart disease, high or low blood

pressure, or diabetes, you should consult your physician before

using this treatment to determine whether it poses a risk to your

health;'' and

C. Failing to post in a conspicuous place where it is likely to be

noticed by, and is legible to, prospective users, in the reception area

of any location where any such treatment is offered for sale, sold, or

used, a sign containing the warning in subpart B and nothing else

printed in letters one inch high.

IV

It is further ordered that respondents European Body Concepts,

Inc., a Maryland corporation, European Body Concepts, Inc., a Virginia

corporation, European Body Concepts, Inc., a North Carolina

corporation, their successors and assigns, and their officers; James

Marino, individually and as an officer and director of said

corporations; and respondents' agents, representatives and employees,

directly or through any partnership, corporation, subsidiary, division

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

offering for sale, sale or distribution of any weight control or weight

reduction treatment, program, product, or service in or affecting

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

Act, do forthwith cease and desist from making any representation, in

any manner, directly or by implication, that any such treatment,

program, product, or service has any effect on weight or body size,

unless they disclose, clearly and prominently, and in close proximity

to such representation that diet and/or increasing exercise is required

to lose weight; provided however, that this disclosure shall not be

required if respondents possess and rely upon competent and reliable

scientific evidence demonstrating that the treatment, program, product,

or service is effective without either dieting or increasing exercise.

V

It is further ordered that respondents European Body Concepts,

Inc., a Maryland corporation, European Body Concepts, Inc., a Virginia

corporation, European Body Concepts, Inc., a North Carolina

corporation, their successors and assigns, and their officers; James

Marino, individually and as the sole officer and director of said

corporations; and respondents' agents, representatives and employees,

directly or through any partnership, corporation, subsidiary, division

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

offering for sale, sale or distribution of any weight control or weight

reduction treatment, program, product, or service 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 any endorsement (as ``endorsement'' is

defined in 16 CFR 255.0(b)) represents the typical or ordinary

experience of members of the public who use such treatment, program,

product, or service.

VI

It is further ordered that respondents European Body Concepts,

Inc., a Maryland corporation, European Body Concepts, Inc., a Virginia

corporation, European Body Concepts, Inc., a North Carolina

corporation, their successors and assigns, and their officers; James

Marino, individually and as an officer and director of said

corporations; and respondents' agents, representatives and employees,

directly or through any partnership, corporation, subsidiary, division

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

offering for sale, sale or distribution of any treatment, program,

product, or service in or affecting commerce, as ``commerce'' is

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

desist from making any representation, in any manner, directly or by

implication, that:

A. Such treatment, program, product, or service has any weight

control, weight loss or weight maintenance benefit;

B. Such treatment, program, product, or service has any effect on

cellulite; [[Page 18409]]

C. Such treatment, program, product, or service has any effect on

users' body measurements; or

D. Using any such treatment, program, product, or service designed

or used to prevent weight gain or produce weight loss, reduce or

eliminate fat or cellulite, or reduce body measurements is safe or

without risk;

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

and rely upon competent and reliable scientific evidence that

substantiates the representation.

VII

Nothing in this Order shall prohibit respondents from making any

representation that is specifically permitted in labeling for any

product by regulations promulgated by the Food and Drug Administration

pursuant to the Nutrition Labeling and Education Act of 1990.

VIII

Nothing in this Order shall prohibit respondents from making any

representation for any drug that is permitted in labeling for any such

drug under any tentative final or final standard promulgated by the

Food and Drug Administration, or under any new drug application

approved by the Food and Drug Administration.

IX

It is further ordered that respondents European Body Concepts,

Inc., a Maryland corporation, European Body Concepts, Inc., a Virginia

corporation, and European Body Concepts, Inc., a North Carolina

corporation, shall:

A. Within thirty (30) days after service of the 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, within

three (3) days after the person assume his or her responsibilities.

X

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 Trade Commission or its staff for

inspection and copying:

A. Copies of all advertisements which contain any such

representation, including tape recordings of all broadcast

advertisements;

B. All materials that were relied upon in disseminating such

representation; and

C. 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 but not limited to, complaints from

consumers and complaints or inquiries from government organizations.

XI

It is further ordered that respondents European Body Concepts,

Inc., a Maryland corporation, European Body Concepts, Inc., a Virginia

corporation, European Body Concepts, Inc., a North Carolina

corporation, 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, or any other corporate

change that may affect compliance obligations arising out of this

Order.

XII

It is further ordered that respondent James Marino shall for a

period of five (5) years from the date of issuance of the 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 affiliation with any new business

or employment shall include respondent's new business address, and a

statement describing the nature of the business or employment and his

duties and responsibilities.

XIII

It is further ordered that the respondents herein shall within

sixty (60) days after service upon them of this Order, and at such

other times as the 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.

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement to a

proposed consent order from European Body Concepts, Inc., a Maryland

corporation, European Body Concepts, Inc., a Virginia corporation,

European Body Concepts, Inc., a North Carolina corporation, and James

Marino (hereinafter sometimes referred to as ``proposed respondents'').

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 review again the

agreement and comments received and will decide whether it should

withdraw from the agreement or make final the agreement's proposed

order.

The complaint charges that the proposed respondents deceptively

advertised a weight loss treatment that involved wrapping bandages

soaked in mineral solution around the bodies of users who then put on

vinyl body suits (``European Body Wrap Treatment''). According to the

complaint, the proposed respondents falsely claimed that the European

Body Wrap treatment: (a) Caused users to lose significant numbers of

inches and pounds quickly and easily and without diet or exercise; (b)

eliminated cellulite; (c) reduced the size of specific areas of the

body; (d) enabled users to maintain their weight and inch loss and (e)

was completely safe for all users.

The compliant also alleges that the proposed respondents falsely

represented that the results achieved by testimonialists, featured in

their advertising were typical of those experienced by members of the

public who use the European Body Wrap treatment. Finally, the proposed

respondents are charged with representing that the European Body Wrap

treatment was completely safe for all users, but deceptively failing to

disclose that it may be dangerous to the health of people with certain

medical conditions such as heart disease, high or low blood pressure,

and diabetes.

The proposed order contains six substantive provisions, Parts I

through VI.

Part I prohibits proposed respondents from making the deceptive

weight loss, cellulite reduction, and safety claims alleged in the

proposed complaint for the European Body Wrap treatment or any

substantially similar treatment. In addition, Part I bans the claim

that users of the European Body Wrap treatment or [[Page 18410]] any

substantially similar treatment are successful in maintaining their

inch or weight loss.

Part II prohibits the proposed respondents from representing that

any body wrapping treatment causes inch loss, does so quickly and

easily or without diet or exercise, or causes inch loss at any specific

part of the body, unless the claim is true and substantiated by

competent and reliable scientific evidence. In addition, Part II

requires the proposed respondents to disclose in conjunction with any

such representation that the inch loss is temporary and that there is

no weight loss, unless they can substantiate otherwise.

Part III.A requires proposed respondents to disclose, in

conjunction with any representation about the safety of their body wrap

treatment that body wrapping may be dangerous to the health of people

with heart disease, high or low blood pressure, or diabetes. Under the

proposed order, this disclosure must be clear and prominent, which is

defined as being understandable in both the audio and visual portions

of a television ad, as being in an understandable cadence in a radio

ad, and as being in at least twelve point type in a sufficiently

noticeable location in a print ad.

Part III.B requires that, prior to purchase, proposed respondents

give each prospective purchaser of its body wrapping treatment the

following warning:

CAUTION: If you suffer from heart disease, high or low blood

pressure, or diabetes, you should consult your physician before using

this treatment to determine whether it is dangerous to your health.

The warning must be included in a brochure describing the treatment (in

which case it must be printed in bold, ten point type within a two

point rule), or, if the brochure is discontinued, on a five by eight

inch card (in twelve point type). Under Part III.C the proposed

respondents must also display in the reception area of its facilities a

sign with the same warning printed in one-inch high letters.

Part IV requires proposed respondents to disclose that diet or

exercise is required to lose weight in connection with any

representation about the effect of a treatment, program, product, or

service on weight or body size, unless they have competent and reliable

evidence to the contrary. Like the safety disclosure, this disclosure

must also be clear and prominent as defined in the order.

Part V addresses proposed respondents' deceptive use of consumer

testimonials. It prohibits misrepresentations in advertising for weight

control or reduction treatments, programs, products, and services to

the effect that any endorsement constitutes the typical and ordinary

experience of members of the public who use the advertised treatment,

program, product, or service.

Part VI.A-C contains fencing-in provisions that require proposed

respondents to have prior substantiation for claims that any treatment,

program, product, or service provides any benefit in terms of weight

loss or weight maintenance or has an effect on cellulite or body

measurements. Under Part VI.D proposed respondents are required to have

substantiation for claims about the safety of weight loss or body

shaping treatments, programs, products, or services.

Parts VII and VIII contain safe harbors for claims that are

permitted on the labeling of foods and drugs under the applicable

regulations of the Food and Drug Administration. The remaining

provisions of the order are standard compliance provisions. Part IX

requires the corporate respondents to provide copies of the order to

relevant personnel. Part X requires the proposed respondents to keep

records about covered claims for five years. Under Part XI, the

corporate respondents are required to notify the Commission of certain

changes in structure, and Part XII requires the individual respondent

to notify the Commission of changes in his employment for the next five

years. Finally, Part XIII of the proposed order obligates the

respondents to file appropriate compliance reports.

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. 95-8858 Filed 4-10-95; 8:45 am]

BILLING CODE 6750-01-M