Ohio Marketers of Diet Programs Agree to Settle FTC Charges against Deceptive Advertising

FTC News Release
January 12, 1995

Formu-3 International, Inc., the franchisor of "Form-You-3" or "Formu-3" weight-loss centers, and two related companies have agreed to settle Federal Trade Commission allegations that they engaged in deceptive advertising by making unsubstantiated weight-loss and weight-loss maintenance claims. FTC allegations also address deceptive pricing, rate of weight-loss, safety-related and other claims. The settlement would prohibit the respondents from making false and unsubstantiated claims of the type alleged by the FTC, and would require them to make certain disclosures in conjunction with weight-loss and safety maintenance claims in the future.

The FTC's complaint detailing the charges names Formu-3 International, Inc., Formu-3 of Northern Ohio, Inc., and Formu-3 of Southern Ohio, Inc. (collectively Formu-3). All three companies are based in Canton, Ohio. The respondents have advertised and sold their weight-loss services and products at weight loss centers located in many states through company-owned and franchised centers. The respondents' low-calorie (approximately 800 or more calories a day) diet program consists of food products or recommended diets and weight-maintenance services. The Formu-3 centers also sell private label food products.

The FTC's complaint cites various advertising statements and testimonials from consumers stating the weight loss they achieved under the program. The FTC alleged that the resulting representations either were false, or that Formu-3 did not have substantiation to support them. The complaint alleges that the respondents:

In addition, the complaint alleges that the companies deceptively advertised the price of their program and how it was calculated, and falsely claimed in their diet brochure that their private-label food products are superior to grocery store food because they decrease calories by at least 33 percent daily and fat by at least 70 percent daily.

Finally, the FTC charged, the respondents provided ads and promotional materials to franchisees, giving them the means to perpetrate the deceptive claims.

The proposed settlement would prohibit the respondents from misrepresenting the performance, efficacy or safety of any weight-loss program they offer, or the competence or training of their personnel, in the future. The settlement also would require them to have scientific data to back up future claims they make about weight loss success, rates, time frames, and weight maintenance. Moreover, the proposed settlement articulates the type of evidence that would be required to support various maintenance claims. For instance, claims that weight loss is maintained long term would have to be supported by evidence based on the experience of participants who were followed for at least two years from the completion of the active maintenance phase of respondents' program.

In addition, maintenance success claims in most ads would have to be accompanied by various clear and prominent disclosures, including the statement, "For many dieters, weight loss is temporary," as well as disclosures about the average weight-loss maintenance for consumers on the relevant program.

The proposed order would require any testimonial the respondents use to represent the results consumers generally achieve, unless the respondents also clearly disclose either the generally expected results or a statement such as, "This result is not typical. You may be less successful."

The order would also prohibit the respondents from misrepresenting the existence or amount of calories, fat or any other nutrient or ingredient in any food product, and from misrepresenting the efficacy, performance or safety of any food or drug. The order would permit the respondents to make representations that are specifically permitted in labeling for any product or drug by regulations promulgated by the Food and Drug Adminstration or nutrition labeling regulations promulgated by the Department of Agriculture.

In addition, the order would prohibit the respondents from misrepresenting the price of the program in any way. The order would prohibit Formu-3 from advertising a daily, weekly or monthly price for its program unless it also discloses the number of days, weeks or months consumers will be required to pay the advertised price or the total cost of the weight-loss program.

To address the safety-related allegations, the FTC order would require the respondents to warn certain customers about health risks associated with not following the diet program protocol.

Finally, the settlement requires the respondents to provide their franchisees with a copy of the order, contractually bind their franchisees to abide by the requirements in the order, and to monitor their compliance.

The order also contains provisions that would assist the FTC in monitoring Formu-3's compliance with the settlement.

The FTC's Cleveland Regional Office handled the investigation.

The Commission vote to approve the proposed consent agreement for public comment was 4-0.

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