Infomercial Marketers Settle FTC Charges

Ad Claims For "Hair Farming," "Mega Memory System," "Addiction Breaking System,"
"Action Reading," "Eden's Secret," and "Mega Reading" Were Deceptive

FTC News Release
January 13, 1998

Eight marketers of self-help and health-related products promoted in radio and television infomercials have agreed to settle Federal Trade Commission charges that ad claims for their products were false or unsubstantiated. The defendants will pay a total of $1.1M to settle the charges and one defendant will be required to establish a $500,000 escrow account, which will be used to repay consumers should he commit similar law violations in the future. A ninth defendant faces trial on FTC charges in federal district court.

Kevin Trudeau developed and hosted radio and TV infomercials for a range of products in conjunction with two infomercial production companies, Mega Systems, Inc. and Tru-Vantage, LLC. Many of the infomercials had names such as, "A Closer Look," and were formatted to appear to be commercial radio and TV interview programs or talk shows, not the advertisements they actually were. Five respondents, including Trudeau himself, invented or manufactured the products or services that were featured in the infomercials and appeared in the infomercials promoting them.

The Settlements:

To settle the FTC charges, Kevin Trudeau, who developed and appeared in all the infomercials, including the one for his "Mega Memory System," will pay $500,000 in consumer redress and will be barred from making false claims for the products in the future. Trudeau will be required to establish a $500,000 escrow account or performance bond to assure compliance. Infomercial producer Mega Systems International, Inc., and its principal, Jeffrey Salberg, also will pay $500,000 for consumer redress. Kenneth Wright, inventor and promoter of "Eden's Secret Nature's Purifying Product," and Roger J. Callahan, promoter of the "addiction breaking system" will each pay $50,000 in consumer redress.

Trudeau, Mega Systems, Salberg, Wright, Callahan, Eller, Berg, and Tru-Vantage will be barred from making the alleged deceptive claims relating to their products in the future. In addition, Trudeau, Salberg, and Mega Systems will be required to have substantiation, which, when appropriate, must be scientific, for claims about the benefits, performance or efficacy of any product or program they advertise; promote; sell; or distribute in the future. They also will be barred from misrepresenting the existence, contents, validity, results, conclusions or interpretations of any test, study or research. Wright, Callahan, Berg, and Tru-Vantage will be required to have substantiation, which, when appropriate, must be scientific, for claims about the benefits, performance or efficacy of any product or program like those they allegedly deceptively promoted.

In addition, both Trudeau, Mega Systems, and Salberg will be required to disclose "THE PROGRAM YOU ARE WATCHING IS A PAID ADVERTISEMENT FOR [THE PRODUCT OR SERVICE]" in television ads that are at least 15 minutes long, and to disclose the same audio message in radio ads that are at least five minutes long.

All the settlement agreements contain recordkeeping and reporting provisions to allow the Commission to monitor compliance.

The Commission votes to accept the proposed consent agreements and to file the complaint were 4-0, with Commissioner Mozelle W. Thompson not participating.

The proposed consent decrees with Trudeau and Wright were filed on January 12. They are subject to court approval. Court filed consent decrees have the force of law when signed by the judge.

The complaint against Jacqueline Sable was not settled and will be tried in federal district court for the Northern District of Illinois in Chicago.

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This page was posted on December 14, 2005.

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