Pain Stops Here!, Inc., et al.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 9823175]

Pain Stops Here!, Inc., 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 August 30, 1999.

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

Room 159, 600 Pennsylvania Avenue, NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Christa V.A. Vecchi, FTC/H-263, 600

Pennsylvania Avenue, NW, Washington, DC 20580, (202) 326-3166.

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 24, 1999), 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, 600 Pennsylvania Avenue, NW, Washington, DC

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

Public comment is invited. Comments should be directed to: FTC/

Office of the Secretary, Room 159, 600 Pennsylvania Avenue, NW,

Washington, DC 20580. Two paper copies of each comment should be filed,

and should be accompanied, if possible, by a 3\1/2\ inch diskette

containing an electronic copy of the comment. 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, subject to final

approval, an agreement to a proposed Consent Order (``proposed order'')

from Pain Stops Here! Inc. and Sande R. Caplin, the President and

majority shareholder of the corporation.

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 will decide whether it should withdraw from the agreement

or make final the agreement's proposed order.

This matter concerns Internet and print advertisements disseminated

directly to consumers as well as through distributors and retail

stores, including drug store, health food stores, sporting goods

stores, health care products stores, and private individuals working

out of their homes. These products contain magnets that purportedly

treat or alleviate a variety of medical problems, including cancer,

liver disease, heart disease, and arthritis. Proposed respondents'

magnetic products include an assortment of devices, such as sleep pad,

pillow insert, and magnetized water ceramic magnetic ring.

The Commission's complaint charges that the proposed respondents

engaged in deceptive advertising in violation of Sections 5 and 12 of

the FTC Act by making unsubstantiated claims that its magnetic therapy

products: (1) Are effective in treating cancer; (2) cure liver disease

and other diseased internal organs; (3) are effective in reducing

cholesterol deposits in the arteries and veins and normalizing the

circulatory system; (4) are effective in breaking up kidney and

gallbladder stones and in the prevention of further formation of

stones; (5) are effective in treating infectious disease, urinary

infection, gastric ulcers, dysentery, diarrhea, skin ulcers, and bed

sores; (6) prevent and reverse heart disease, circulatory disease,

arthritis, auto-immune illness, neuro-degenerative disease, and

allergies; (7) are effective in treating arthritis, bursitis,

tendinitis, sprains, strains, sciatica, lameness, navicular, and foot

growth problems in animals; (8) stimulate the body's production of

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the hormone Melatonin; (9) are effective in treating pain caused by

conditions such as arthritis, bursitis, and sciatica; and (10) are

effective in stimulating growth in plants causing them to grow 20 to 40

percent faster.

The complaint further alleges that proposed respondents represented

that studies prove that proposed respondents' magnetic products are

effective in the mitigation and treatment of pain caused by conditions

such as arthritis, bursitis, and sciatica. The proposed complaint

alleges that respondents lack substantiation for this claim.

The proposed order contains provisions designed to remedy the

violations charged and to prevent proposed respondents from engaging in

similar acts in the future.

Paragraph I of the proposed order prohibits proposed respondents

from representing that their magnetic therapy products (defined as any

product that contains a magnet of any kind purporting to relieve the

symptoms of, treat, mitigate, cure, relieve, heal or alleviate any

disease or health condition): (1) Are effective in the treatment of

cancer; (2) cure liver disease or other diseased internal organs; (3)

are effective in the reduction of cholesterol deposits in the arteries

and veins or normalizing the circulatory system; (4) are effective in

breaking up kidney or gallbladder stones or in the prevention of

further formation of stones; (5) are effective in the mitigation or

treatment of infectious diseases, urinary infection, gastric ulcers,

dysentery, diarrhea, skin ulcers, or bed sores; (6) prevent or reverse

heart disease, circulatory disease, arthritis, auto-immune illness,

neuro-degenerative disease, or allergies; (7) are effective in the

mitigation or treatment of arthritis, bursitis, tendinitis, sprains,

strains, sciatica, lameness, navicular, and foot growth problems in

animals; (8) stimulate the body's production of the hormone Melatonin;

(9) are effective in the mitigation or treatment of pain caused by

conditions such as arthritis, bursitis, and sciatica; or (10) are

effective in stimulating significant growth in plants, unless, at the

time the representation is made, respondents possess and rely upon

competent and reliable scientific evidence that substantiates the

representation.

Paragraph II of the proposed order prohibits proposed respondents

from misrepresenting the existence, contents, validity, results,

conclusions, or interpretations of any test, study, or research.

Paragraph III of the proposed order prohibits proposed respondents

from making any representation about the health benefits, performance,

or efficacy of any product or program, unless, at the time the

representation is made, respondents possess and rely upon competent and

reliable scientific evidence that substantiates the representation.

Paragraph IV of the proposed order prohibits proposed respondents

from: (1) Disseminating to any distributor any material containing any

claims prohibited by the order; and (2) authorizing any distributor to

make any representations prohibited by the order. In addition,

Paragraph IV requires proposed respondents to (1) send a notice to

distributors with whom they have done business since January 1, 1998,

announcing their settlement with the FTC, and requiring distributors to

submit all proposed promotional and marketing materials to proposed

respondents for review prior to their dissemination; (2) send, for a

period of three years, the same notice to future distributors with whom

proposed respondents do business; (3) monitor distributors' promotional

activities; (4) terminate, as appropriate, the right of any distributor

to market PSH products or programs who continues to use promotional

materials or make oral representations that violate the order, (5)

provide the FTC all relevant information about the distributors who

continue to engage in activities that violate the order, and (6) review

all marketing materials before distributors disseminate them to the

public.

Paragraph V contains record keeping requirements for the

notification letters sent to distributors, communications between

respondents and distributors referring or relating to the requirements

of Paragraph IV of the order, and any other materials created pursuant

to Paragraph IV.

Paragraph VI of the proposed order contains record keeping

requirements for materials that substantiate, qualify, or contradict

covered claims and requires the proposed respondents to keep and

maintain all advertisements and promotional materials containing any

representation covered by the proposed order. In addition, Paragraph

VII requires distribution of a copy of the consent decree to current

and future officers and agents. Further, Paragraph VIII provides for

Commission notification upon a change in the corporate respondents.

Paragraph IX requires proposed respondent Sande R. Caplin to notify the

Commission when he discontinues his current business or employment and

of his affiliation with any new business or employment. The proposed

order, in Paragraph X, also requires the filing of a compliance report.

Finally, Paragraph XI of the proposed order provides for the

termination of the order after 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.

By direction of the Commission.

Benjamin I. Berman,

Acting Secretary.

[FR Doc. 99-16710 Filed 6-30-99; 8:45 am]

BILLING CODE 6750-01-M