Dean Distributors, Inc., et al., d/b/a Advanced Health Systems, Cambridge Direct Sales, and Medibase; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 912-3220]

Dean Distributors, Inc., et al., d/b/a Advanced Health Systems,

Cambridge Direct Sales, and Medibase; 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 require, among other things, the California-

based companies, which market low calorie and very low calorie diet

(VLCD) programs, to possess a reasonable basis for any future claims

regarding weight loss or weight loss maintenance, and to clearly and

prominently disclose in any representation regarding the safety of

respondent's VLCD diet programs that physician monitoring is required

to minimize the potential for health risks, namely development of

gallbladder disease.

DATES: Comments must be received on or before June 6, 1997.

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

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

FOR FURTHER INFORMATION CONTACT:

Walter Gross or J. Reilly Dolan, FTC/H-200, Washington, DC 20580. (202)

326-3319 or 326-3292.

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 complaint. An electronic copy of the full text of

the consent agreement package can be obtained from the FTC Home page

(for March 25, 1997), 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 Order

The Federal Trade Commission has accepted an agreement to a

proposed consent order from Dean Distributors, Inc., a corporation

doing business as advanced Health Care Systems, Cambridge Direct Sales

and Medibase. Proposed respondent markets low calorie and very low

calorie diet programs through a multi-level distribution system and

directly to independent physicians.

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 will decide whether it should withdraw from the agreement

or make final the agreement's proposed order.

The Commission has alleged that proposed respondent has made false

and unsubstantiated claims in its advertising, promotional and sales

materials that are likely to mislead consumers as to: (1) the

likelihood of success in achieving and maintaining weight reduction;

and (2) the health risk associated with rapid weight loss. Proposed

respondent has represented, through consumer endorsements, that its

diet programs produce successful results. The consumers featured in

these testimonials purportedly achieved remarkable success in reaching

a desired weight, and in changing their appearance. Through these

consumer endorsements, proposed respondent has represented that he

success achieved by such consumers in reaching their weight loss goal

reflects the typical or ordinary experiences of participants of

respondent's weight loss programs. The Commission has alleged that

proposed respondent had failed to substantiate the claim that the

weight loss success experienced by persons featured in these

testimonial advertisements is representative of what consumers will

generally achieve with the products.

[[Page 16584]]

The Commission has also alleged that proposed respondent has

represented that the typical consumer of its products and services is

successful in maintaining achieved weight loss, or, at a minimum, a

substantial portion of achieved weight loss, over time. Proposed

respondent has not provided adequate substantiation to support

representations regarding the long-term effectiveness of the weight

loss products and programs. Furthermore, according to the Commission's

complaint, proposed respondent has represented that its maintenance

claims were based in part upon a valid statistical analysis of its

customers. However, the Commission has alleged that the analysis in

question was not based upon a valid statistical sample of proposed

respondent's customers.

Finally, the Commission has alleged that proposed respondent has

represented that its physician monitored very-low-calorie diet programs

are free of serious health risks without disclosing that physician

monitoring is necessary to minimize the risk of serious health

complications associated with very-low calorie diet programs. Further

the Commission has alleged that in materials prepared specifically for

physicians of patients using the very-low-calorie diets, proposed

respondent failed to list serious adverse heath complications that have

been associated with very-low-calorie diets.

The proposed consent order seeks to address the alleged

misrepresentations cited in the accompanying complaint by requiring

proposed respondents to possess a reasonable basis for any future

claims regarding weight loss or weight loss maintenance. The proposed

consent order also requires proposed respondent to clearly and

prominently disclose in any representation regarding the safety of

respondent's VLCD diet programs that physician monitoring is required

to minimize the potential for health risks, namely development of

gallbladder disease.

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

proposed order, and 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. 97-8799 Filed 4-4-97; 8:45 am]

BILLING CODE 6750-01-M