"Fat-Magnet" Agrees to Settle FTC Charges

Agrees to Pay Consumer Redress

FTC News Release
December 14, 1990

The Federal Trade Commission announced today that Allied International Corp., doing business as Fat-Magnet, and one other corporate and three individual defendants, have agreed to settle charges that they made false and unsubstantiated advertising claims for Fat-Magnet diet pills. Under the settlement, the defendants agree to a permanent injunction and to pay consumer redress.

The FTC's final judgment and consent order, approved in federal court on November 14, permanently prohibits Fat-Magnet from selling or marketing any diet pills, and from making any safety, performance or efficacy claims for any food, drug or device without competent and reliable evidence to substantiate such claims. Fat-Magnet is also prohibited from misrepresenting the performance, efficacy or safety of any program or service related to weight control.

Last January the FTC filed a complaint in federal court alleging that Fat-Magnet's advertising claims that its diet pills would help users lose weight without dieting or exercise were false and unsubstantiated. The complaint named Allied International Corp., doing business as Fat-Magnet, Harold Martino, Linder Ad-Vantage Inc., Milton Linder, Eric Linder, and William E. Shell, MD, all of California.

Under the final judgment and order, the corporate defendants and Harold Martino, Milton Linder and Eric Linder are required to pay $750,000 into an escrow account established and managed by the Commission to provide redress to purchasers of Fat-Magnet.

The Commission vote to approve the final judgment and order was 3-1, with Commissioner Andrew J. Strenio, Jr., dissenting. In dissenting, Commissioner Strenio said, "Serious flaws in the existing settlement make the theoretical risk of a worse outcome through litigation comparatively insignificant."

The Commission submitted the final judgment and order to the Federal District Court for the Central District of California on November 9.

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