Herbal Worldwide Holdings Corp., et al.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 972-3157]

Herbal Worldwide Holdings Corp., et al.; Analysis To Aid Public

Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged

violations of federal law prohibiting unfair or deceptive acts or

practices or unfair methods of competition. The attached Analysis To

Aid Public Comment describes both the allegations in the draft

complaint that accompanies the consent agreement and the terms of the

consent order--embodied in the consent agreement--that would settle

these allegations.

DATES: Comments must be received on or before September 8, 1998.

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: Tom Carter or Susan Arthur, Dallas

Regional Office, Federal Trade Commission, 100 N. Central Expressway,

Suite 500, Dallas, TX. 75201. (214) 979-9350.

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 June 26, 1998), on the World Wide Web, at ``http://www.ftc.gov/os/

actions97.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 To Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to

final approval, to a proposed consent order from Herbal Worldwide

Holdings Corp., Jose Diaz, and Eduardo N. Naranjo (hereinafter

``respondents''). Respondents are marketers of an over-the-counter

weight loss product called ``Fattache.''

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 sixty (60) days, the Commission will again review the

agreement and any 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 has focused on respondents' Spanish-language television

advertisement for Fattache. The ingredients in Fattache include

psyllium, chitosan, glucomannan, and apple pectin.

The proposed complaint alleges that respondents made

unsubstantiated claims that: (1) Fattache causes weight loss without a

change in diet: (2) Fattache prevents the absorption of ingested fat;

(3) Fattache helps eliminate ingested fat before it is absorbed, and

(4) testimonials from consumers appearing in advertisements for

Fattache reflect the typical or ordinary experience of

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members of the public who use Fattache.

Parts I and II of the proposed order prohibit the respondents from

making the challenged claims, unless at the time of the representation,

the respondents possess and rely on competent and reliable scientific

evidence that substantiates the representation. Part II of the order

also requires that if the respondents do not have substantiation for

claims made through the use of consumer testimonials, that the

advertisement disclose the results that users can generally expect to

achieve, or the limited applicability of the endorser's experience to

what users can generally expect to achieve.

Because this matter involves substances that could be regulated by

the FDA as a food or drug, Part III of the order includes a ``safe

harbor'' allowing the respondents to make any claims approved in any

new drug application, or in any tentative final or final standard

promulgated by that agency. In addition, Part IV of the proposed order

includes a safe harbor for representations specifically permitted by

regulations promulgated by the FDA pursuant to the Nutrition Labeling

and Education Act of 1990.

The proposed order also requires the respondents to maintain

materials relied on to substantiate clams covered by the order; to

provide a copy of the consent agreement to all employees or

representatives with duties affecting compliance with the terms of the

order; and to file one or more compliance reports detailing compliance

with the order.

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.

Benjamin J. Berman.

Acting Secretary.

[FR Doc. 98-17934 Filed 7-6-98; 8:45 am]

BILLING CODE 6750-01-M