A Canadian-based fulfillment company doing business as Beauty Visions Worldwide and SlimShop, and its principal Robert Van Velzen, have agreed to settle Federal Trade Commission charges that they made false and unsubstantiated weight-loss claims for two purported weight-loss patches - "Hydo-Gel Slim Patch" and "Slenderstrip." Under the terms of the settlement, the defendants are prohibited from representing, or assisting any other entity in representing, that Hydro-Gel Slim Patch, Slenderstrip, or any other weight-loss product causes rapid or substantial weight loss without the need to diet or exercise. The defendants also are required to pay consumer redress.
"Fulfillment companies that are involved in their clients' misleading advertising can expect to hear from the FTC," said Lydia Parnes, Acting Director of the FTC's Bureau of Consumer Protection. "There is no product on the market that causes permanent substantial weight loss without diet or exercise."
In December 2003, the FTC filed a complaint against No. 1025798 Ontario, Inc., doing business as The Fulfillment Solutions Advantage, Inc., The FSA Group, International Access, Beauty Visions Worldwide, Slimshop, Hydro-Gel Slim Patch, and Slenderstrip; and Robert Van Velzen (collectively the FSA defendants). The FTC's complaint alleged that the FSA defendants falsely represented that Hydro-Gel Slim Patch and Slenderstrip cause rapid and substantial weight loss without reducing caloric intake or increasing exercise, that these products work for all users, and that Hydro-Gel Slim Patch causes permanent weight loss.
In March 2004, the FTC amended its complaint by adding five new defendants who allegedly also were responsible for the sale and advertising of the weight-loss patches: Kingstown Associates Ltd. and BVW Associates, Inc., both doing business as Beauty Visions Worldwide and Slimshop; and their principals, Gary Richard Bush, David James Varley, and Laurence Anthony White (collectively the Kingstown defendants). According to the FSA defendants' court filings, their role in the marketing of Hydro-Gel Slim Patch and Slenderstrip was limited to providing fulfillment services on behalf of the Kingstown defendants.
The stipulated final order announced today prohibits the FSA defendants from:
· representing that Hydro-Gel Slim Patch, Slenderstrip, or other weight-loss products cause rapid or substantial weight loss without the need to diet or exercise; representing that these products work for all overweight users; or that these products cause permanent weight loss;
· reliable scientific evidence to substantiate such claims; and
· selling, renting, or disclosing the names of purchasers of Hydro-Gel Slim Patch and Slenderstrip, or any other information about those customers.
The settlement requires the FSA defendants to pay $72,422 for consumer redress, and it contains a $1,422,481 avalanche clause, which would become effective if the court were to find that the FSA defendants misrepresented their financial situation.
Finally, the settlement contains a provision requiring the FSA defendants to provide assistance in the ongoing litigation against the Kingstown defendants, as well as record keeping provisions to assist the FTC in monitoring the defendants' compliance.
The Commission vote authorizing staff to file the proposed stipulated final order was 5-0. The stipulated final order was filed in the U.S. District Court, Western District of New York, on September 15, 2004, and signed by the judge on September 20, 2004. This stipulated final order is for settlement purposes only and does not constitute an admission by the FSA defendants of a law violation.
Copies of the proposed stipulated final order are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.