Universal Merchants, Inc.; Steven Oscherowitz; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 952-3366]

Universal Merchants, Inc.; Steven Oscherowitz; 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 or deceptive acts or practices and unfair methods of

competition, this consent agreement, accepted subject to final

Commission approval, would prohibit, among other things, the Los

Angeles, California-based dietary supplement manufacturer and its

president from making certain challenged claims for chromium picolinate

dietary supplements, without competent and reliable scientific evidence

to support them; from misrepresenting the results of any test, study,

or research; and from representing that any testimonial or endorsement

is the typical or ordinary experience of users of the advertised

product, unless the claim is substantiated or unless Universal

Merchants discloses the generally expected results clearly and

prominently. The agreement settles allegations that Universal Merchants

made unsupported claims about weight loss and health benefits in

infomercials for its Chromatrim and Chromatrim 100 chromium picolinate

chewing gum products.

DATES: Comments must be received on or before January 14, 1997.

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

Room 159, 6th St. and Pennsylvania Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Richard L. Cleland, Federal Trade

Commission, H-466, 6th and Pennsylvania Ave., NW, Washington, DC 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 above-captioned 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. The following Analysis to Aid

Public Comment describes the terms of the consent agreement, and the

allegations in the accompanying complaint. An electronic copy of the

full text of the consent agreement package can be obtained from the FTC

Home page, on the World Wide Web, at ``http://www.ftc.gov/os/actions/

htm.'' A paper copy can be obtained from the FTC Public Reference Room,

Room H-130, Sixth Street and Pennsylvania Avenue, NW., Washington, DC

20580, either in person or by calling (202) 326-3627. 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)).

Analysis of Proposed Consent for Public Comment

The Federal Trade Commission has accepted an agreement to a

proposed consent order from Universal Merchants, Inc., the marketer of

ChromaTrim, a chewing gum containing chromium picolinate sold as a

weight loss aid, and its president, Steven Oscherowitz, hereinafter

sometimes referred to as 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 again review the

agreement and the comments received and will decide whether it should

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

order.

The Commission's complaint in this matter alleges that the

respondents made unsubstantiated claims that ChromaTrim (1) reduces

body fat, (2) causes significant weight loss, (3) significantly reduces

body fat and causes weight loss without dieting or exercise, (4)

increases lean body mass and builds muscle, and (5) controls appetite

and craving for sugar. The complaint further alleges that respondents

falsely represented that these effects have been demonstrated through

scientific studies. In addition, the complaint alleges that respondents

made unsubstantiated claims that (1) testimonials from consumers

appearing

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in ChromaTrim advertisements reflect the typical or ordinary experience

of users and (2) that nine out of ten people suffer decreased ability

to burn fat, preserve muscle, and control hunger and cravings because

of a chromium deficiency.

The proposed consent order contains provisions designed to remedy

the violations charged and to prevent the respondents from engaging in

similar acts and practices in the future.

Part I of the order requires substantiation for claims that

ChromaTrim (1) significantly reduces body fat, (2) causes significant

weight loss, (3) significantly reduces body fat or causes weight loss

without dieting or exercise, (4) increases lean body mass or builds

muscle, and (5) controls appetite or craving for sugar. Similarly, Part

I prohibits the claim that nine out of ten people do not consume enough

chromium to support normal insulin function, resulting in decreased

ability to burn fat, preserve muscle, and control hunger and cravings,

unless, such claim is substantiated by competent and reliable

scientific evidence at the time it is made.

Part II of the proposed order requires substantiation for any

health benefits, performance, efficacy or safety claim for any food,

dietary supplement, or drug. Part III prohibits the misrepresentation

of any test, study, or research. Part IV prohibits proposed respondents

from representing that any testimonial is the typical or ordinary

experience of users unless such claim is substantiated or respondents

disclose, clearly and prominently, what the generally expected results

would be or that consumers should not expect similar results. Parts V

and VI allow representations permitted for drugs by the Food and Drug

Administration or for foods under the Nutrition Labeling and Education

Act. Part VII requires proposed respondents to maintain certain records

for five years, and Part VIII requires proposed respondents to

distribute a copy of the order to certain persons who have

responsibilities subject to the order. Part IX requires the corporate

respondent to notify the Commission of any changes in the corporation

that may affect compliance with the order and Part X requires that

Steven Oscherowitz notify the Commission of changes in employment or of

his affiliation with any new employment. This provision is effective

for five years. Part XI requires that the proposed respondents file a

compliance report and Part XII sunsets the proposed order at twenty

years under certain circumstances.

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. 96-29267 Filed 11-14-96; 8:45 am]

BILLING CODE 6750-01-P