[Senate Hearing 113-547]
[From the U.S. Government Publishing Office]
S. Hrg. 113-547
PROTECTING CONSUMERS FROM FALSE
AND DECEPTIVE ADVERTISING
OF WEIGHT-LOSS PRODUCTS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CONSUMER PROTECTION, PRODUCT SAFETY, AND INSURANCE
of the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
JUNE 17, 2014
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
U.S. GOVERNMENT PUBLISHING OFFICE
92-998 WASHINGTON : 2015
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
BARBARA BOXER, California JOHN THUNE, South Dakota, Ranking
BILL NELSON, Florida ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington ROY BLUNT, Missouri
MARK PRYOR, Arkansas MARCO RUBIO, Florida
CLAIRE McCASKILL, Missouri KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota DEAN HELLER, Nevada
MARK BEGICH, Alaska DAN COATS, Indiana
RICHARD BLUMENTHAL, Connecticut TIM SCOTT, South Carolina
BRIAN SCHATZ, Hawaii TED CRUZ, Texas
ED MARKEY, Massachusetts DEB FISCHER, Nebraska
CORY BOOKER, New Jersey RON JOHNSON, Wisconsin
JOHN E. WALSH, Montana
Ellen L. Doneski, Staff Director
John Williams, General Counsel
David Schwietert, Republican Staff Director
Nick Rossi, Republican Deputy Staff Director
Rebecca Seidel, Republican General Counsel and Chief Investigator
------
SUBCOMMITTEE ON CONSUMER PROTECTION, PRODUCT SAFETY,
AND INSURANCE
CLAIRE McCASKILL, Missouri, DEAN HELLER, Nevada, Ranking
Chairman Member
BARBARA BOXER, California ROY BLUNT, Missouri
MARK PRYOR, Arkansas KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota DAN COATS, Indiana
RICHARD BLUMENTHAL, Connecticut TED CRUZ, Texas
BRIAN SCHATZ, Hawaii DEB FISCHER, Nebraska
CORY BOOKER, New Jersey
C O N T E N T S
----------
Page
Hearing held on June 17, 2014.................................... 1
Statement of Senator McCaskill................................... 1
Statement of Senator Heller...................................... 3
Statement of Senator Nelson...................................... 4
Statement of Senator Klobuchar................................... 70
Statement of Senator Blumenthal.................................. 79
Witnesses
Mary Koelbel Engle, Associate Director, Division of Advertising
Practices, Bureau of Consumer Protection, Federal Trade
Commission..................................................... 5
Prepared statement........................................... 7
Dr. Mehmet C. Oz, Vice Chairman and Professor of Surgery,
Columbia University College of Physicians and Surgeons; Host,
The Dr. Oz Show................................................ 11
Prepared statement........................................... 13
C. Lee Peeler, President and Chief Executive Officer, Advertising
Self-Regulatory Council; Executive Vice President, Advertising
Self-Regulation, Council of Better Business Bureaus............ 31
Prepared statement........................................... 33
Steven M. Mister, President and Chief Executive Officer, Council
for Responsible Nutrition...................................... 44
Prepared statement........................................... 46
Robert H. Haralson IV, Executive Director, TrustInAds.org........ 49
Prepared statement........................................... 51
Daniel Fabricant, Ph.D., Chief Executive Officer and Executive
Director, Natural Products Association......................... 61
Prepared statement........................................... 63
Appendix
Written Testimony of the Electronic Retailing Association
submitted by Julie Coons, President and CEO and Bill McClellan,
Vice President, Government Affairs............................. 83
Response to written questions submitted by Hon. Dean Heller to
Mary Koelbel Engle............................................. 84
PROTECTING CONSUMERS FROM FALSE
AND DECEPTIVE ADVERTISING
OF WEIGHT-LOSS PRODUCTS
----------
TUESDAY, JUNE 17, 2014
U.S. Senate,
Subcommittee on Consumer Protection, Product
Safety, and Insurance,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 9:35 a.m., in
room SR-253, Russell Senate Office Building, Hon. Claire
McCaskill, Chairman of the Subcommittee, presiding.
OPENING STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI
Senator McCaskill. This hearing will now come to order.
We have all heard and seen the ads promising quick and
substantial weight loss if only you take this pill, drink this
shake, use this device, or apply this cream--all without
adjusting diet or increasing physical activity. It seems too
good to be true, and, of course, it is.
We have a short clip of some of these ads--that have run on
television, satellite radio, online, and in print--that I'm
going to play so it is clear what we are talking about today.
And it will appear in a moment.
[Video presentation.]
Senator McCaskill. We also had a satellite radio ad I
thought we were going to play--there are lots of terrible ads
on satellite radio.
It's easy to understand why so many consumers are willing
to take a chance, ignore their instincts, and believe
suspicious claims like these. According to the most recent data
from the Centers of Disease Control and Prevention, more than
one-third of American adults are obese, and 70 percent are
either obese or overweight.
This familiar story of the obesity epidemic is further
colored by surveys finding a desire among Americans to lose
weight, but consistently failing to put in the effort to do so.
In 2013, a Gallup survey showed that 51 percent of adults
wanted to lose weight, while just 25 percent said they were
seriously working toward that goal.
This mismatch between Americans' stated desire to shed
weight and their lack of serious effort can perhaps explain the
growth of the U.S. weight-loss industry, as well as the
proliferation of false and deceptive advertising for weight-
loss products. With so many Americans desperate for anything
that might make it easier to lose weight, it's no wonder scam
artists and fraudsters have turned to the $60-billion weight-
loss market to make a quick buck.
Sadly, this is not a new problem. The Federal Trade
Commission filed its first weight-loss case in 1927. McGowan's
Reducine claimed in True Romance magazine that, quote, ``Excess
fat is literally dissolved away, leaving the figure slim and
properly rounded, giving the lithe grace to the body every man
and woman desires.''
Since 1927, the FTC has filed more than 250 cases
challenging false and unproven weight-loss claims, including,
just this year, four settlements announced in January and, last
month, a complaint filed in Federal court against the sellers
of, in fact, a green coffee bean dietary supplement. More than
one in ten fraud claims submitted to the FTC are, in fact, for
weight-loss products.
But, the problem is much larger than any enforcement agency
could possibly tackle on its own. Private stakeholders,
companies that sell weight-loss products, media outlets, and
other advertising platforms, as well as consumer watchdogs,
must all do their part to help address this problem.
Media outlets and advertising platforms, in particular,
serve as a critical gatekeeper that are well positioned to keep
false and deceptive advertising from reaching consumers. I
appreciate TrustInAds.org, which represents some of the largest
online advertising platforms, being here today to discuss their
recent report on this issue, the challenges online companies
face in addressing false and deceptive advertising, and what
more they can do.
But, the problem is not limited to the Internet. In
preparing for this hearing, my staff reached out to a variety
of media companies across all mediums to better understand
industry practices in screening and monitoring advertising. I
find it troubling that broadcast and satellite radio witnesses
who were asked to be here today were unwilling to appear. To
me, this indicates there is either something to hide or they
don't have a good story to tell. Either way, we will not be
effective in addressing this problem until all stakeholders
take it seriously.
Like in virtually any other industry, there are good actors
and bad actors. We will hear today from the Council for
Responsible Nutrition, a trade association for the dietary
supplement industry, and the Better Business Bureaus'
Advertising Self-Regulatory Council about the industry's
efforts to police itself.
We will also hear today from Dr. Mehmet Oz. He offers a
unique perspective of being both a medical doctor and the host
of a very popular daytime show that frequently airs segments on
weight-loss issues and products, and that is frequently cited
in the false-and-deceptive advertisements used to market
questionable weight-loss products.
Dr. Oz, I will have some tough questions for you today
about your role, intentional or not, in perpetuating these
scams. When you feature a product on your show, it creates what
has become known as ``The Oz Effect,'' dramatically boosting
sales and driving scam artists to pop up overnight, using false
and deceptive ads to sell questionable products.
While I understand that your message is also focused on
basics, like healthy eating and exercise, I'm concerned that
you are melding medical advice, news, and entertainment in a
way that harms consumers.
This subcommittee has looked at a number of scams affecting
consumers. In most other cases, the scams resulted in financial
losses, which can certainly be devastating. But, what makes
weight-loss scams really stand out is that they not only result
in financial losses, but can potentially put a consumer's
health at risk.
I hope to hear suggestions today about how we can better
empower consumers with the tools and knowledge needed to not
fall victim to weight-loss scams and what more stakeholders can
and should be doing to keep false and deceptive weight-loss ads
from reaching consumers in the first place.
I look forward to hearing from all of our witnesses today,
and I thank you all very much for being here.
Senator Heller.
STATEMENT OF HON. DEAN HELLER,
U.S. SENATOR FROM NEVADA
Senator Heller. Thank you. Thank you, Madam Chairman, for
holding this hearing regarding the weight-loss industry.
I want to thank all our witnesses for taking time for being
here also.
We all know that weight management is of interest to many
Americans. I probably should add ``politicians'' to that, too.
But, it's no surprise that the market is quite significant,
totaling 60.5 billion in 2013, alone, in one estimate. I can
understand the appeal these products have for many who are
attempting to improve their health and lifestyles.
It seems to me, that many, and perhaps even most of these
products and services are legitimate, making responsible,
substantiated representation about health benefits and other
claims. But, like any other marketplace, there are bad actors
in this space who make widely erroneous claims about
questionable products. There are also fraudsters and those who
seize upon dieting fads and work to scam vulnerable members of
our population.
I strongly believe the key to healthy weight loss is a
combination of diet and exercise. I personally would be suspect
of a magic weight-loss cure or a miracle pill. That being said,
I can understand how a person may question their own
assumptions when someone who they believe has credibility on
the issue makes a claim about any particular product.
That's why I'm pleased we're here--joined today by Ms. Mary
Engle, who is the Associate Director of the Division of
Advertising Practices within the FTC Bureau of Consumer
Protection. I applaud the FTC's work to shut down the scam
artists, and I look forward to learning more about the
Commission's success this year in bringing a series of cases
under the agency's existing Section 5 authority against a
number of companies engaged in deceptive advertising of weight-
loss products.
I also look forward to hearing her thoughts about how the
Commission is applying its ``reasonable basis'' standard for
substantiating health claims, including weight loss, and what
it considers to be competent and reliable scientific evidence
to back certain claims.
While this standard has traditionally been a flexible one,
it's no secret that the FTC has pursued more stringent
requirements in recent consent decrees. It's an open question
as to who these new substantiation requirements are meant to
apply, where the FTC has followed its own procedural
requirements in applying new standards, and whether the
standard is consistent with constitutional protection of free
speech.
I'd also like to welcome Dr. Oz here today. The Dr. Oz Show
debuted in 2009, and reaches roughly 3 million viewers every
day. I look forward to hearing from Dr. Oz on what steps he has
taken to ensure that the information he shares, and
conversation he moderates provides accurate claims.
We are informed that Dr. Oz does not endorse particular
products, and he has been the subject of unscrupulous entities
using his image in advertising without his permission. However,
much has been written about the so-called ``Dr. Oz effect,''
whereby demands for products and ingredients spike after they
are featured on his show.
When the celebrity doctor mentioned ``Neti Pots,'' for
example, sales for the product rose by 12,000 percent and
Internet searches for the device rose by 42,000 percent. It is
this popularity that may have influenced a Florida-based
company to enter the market in green coffee bean extraction, an
ingredient that Dr. Oz referred to as a ``magic weight-loss
cure'' and a ``miracle pill'' that can burn fat fast. This
company is now the subject of an enforcement action brought by
the FTC that is currently pending in Federal District Court in
Florida for unfair and deceptive claims with regard to this
product.
I would also like to welcome our other witnesses: Mr. Lee
Peeler, for Better Business Bureau; Mr. Steven Mister, of the
Council for Responsible Nutrition; Mr. Rob Haralson, of
TrustInAds.org; and Dr. Daniel Fabricant, of the Natural
Products Association. I thank all of you for taking time to be
here today.
And thank you, again, Madam Chairman, for holding this
hearing. I look forward to our testimonies and answers to some
of our questions.
Senator McCaskill. Great.
Would you like to say a word?
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. No, thank you.
Senator McCaskill. I think that my colleague just did a
great job of introducing everyone, so I'll do this quickly. Ms.
Mary Koelbel Engle is the Associate Director of Division of
Advertising Practices, Bureau of Consumer Protection at the
Federal Trade Commission, here in Washington. Dr. Mehmet Oz,
Vice Chairman and Professor of Surgery, Columbia University
College of Physicians and Surgeons, and host of The Dr. Oz
Show. Mr. C. Lee. Peeler, President and CEO of Advertising
Self-Regulatory Council, Executive Vice President, Council of
Better Business Bureaus, from New York. Mr. Steven Mister--is
it ``Mister'' or ``Myster''?
Mr. Mister. Mister.
Senator McCaskill. Mister. Mr. Steven Mister, President and
CEO, Council for Responsible Nutrition, based here in
Washington. Mr. Robert Hatton Haralson IV, Executive Director,
TrustInAds.org; and Dr. Daniel Fabricant, Executive Director
and CEO, Natural Products Association.
And we will begin with your testimony. We will have you on
a clock, which I'm sure you understand--I know you understand,
Dr. Oz, about the clock--but, we are not strict about that. If
you feel the need to go over by a few moments, we will not have
a problem. And keep in mind, the entirety of any written
testimony you would like to submit will be included in the
official record.
Welcome, Ms. Engle.
STATEMENT OF MARY KOELBEL ENGLE, ASSOCIATE
DIRECTOR, DIVISION OF ADVERTISING PRACTICES, BUREAU OF CONSUMER
PROTECTION, FEDERAL TRADE COMMISSION
Ms. Engle. Good morning. Madam Chair and members of the
Committee, I am Mary Engle, Associate Director for Advertising
Practices at the Federal Trade Commission. I am pleased to have
this opportunity to provide information regarding the FTC's
efforts to combat fraudulent weight-loss advertising.
As you know, the United States is facing an obesity
epidemic. Nearly 70 percent of U.S. adults are overweight or
obese. Excess weight and obesity are major contributors to
chronic diseases and healthcare costs, and present a serious
public health challenge. So, it isn't surprising that there is
strong interest in products that claim to promote weight loss.
Unfortunately, where there is strong consumer interest, fraud
often follows. In the FTC's 2011 Survey of Consumer Fraud, we
found that more consumers were victims of fraudulent weight-
loss products than of any of the other specific frauds that we
surveyed.
Despite the continuing boom in the weight-loss industry,
there exists very little scientific evidence that pills and
supplements alone can help one lose a significant amount of
weight. Scientists agree that the foundation of successful
weight loss is to eat a healthful, calorie-controlled diet, and
increase physical activity. Products that promote fast and easy
weight loss without changes to diet or lifestyle deter
consumers from making these tough but necessary changes.
As was mentioned, the Commission filed its first weight-
loss case way back in 1927, and, since then, we have filed
another 250 cases challenging false and unproven weight-loss
claims. In the past 10 years, the Commission has brought 82 law
enforcement actions challenging false or unsubstantiated claims
about the effectiveness of a wide variety of weight-loss
products and services. Since 2010 alone, the Commission has
collected nearly $107 million in consumer restitution for
deceptive weight-loss claims.
Our recent cases highlight how the agency has focused its
enforcement priorities on large national advertising campaigns
for a creative range of weight-loss products with unproven
benefits. Operation Failed Resolution, announced right after
the new year, targeted the newest weight-loss fads with popular
ingredients: food additives, human hormones, skin creams, and
acai berries. In one Failed Resolution case, consumers were
catchily urged to ``shake their Sensa'' and lose 30, 40, 90
pounds or more without dieting or exercise. In another,
consumers were urged to rub in L'Occitane's almond shaping
creams, touted as having body-slimming capacities that could
trim inches in weeks. In a third, consumers with a taste for
the rare might try liquid homeopathic HCG drops, made from a
diluted form of human hormone, to lose a pound a day. Each of
these cases resulted in a settlement with the FTC. The
companies were ordered to pay consumer redress and to back any
future weight-loss claims with well-conducted human clinical
studies.
Despite this long history of FTC enforcement, weight-loss
fraud persists. This is because it's an area where consumers
are particularly vulnerable to fraud. There's an enormous
amount of money to be made. And people intent on committing
fraud will gravitate toward where the money is.
We have recently noted some disturbing developments with
respect to weight-loss advertising. First is the reliance on
proprietary studies using erroneous or even fabricated data.
This was true in our case against Sensa and in our earlier case
involving Skechers toning shoes. These kinds of practices add a
layer of complexity to our weight-loss investigations.
A second trend is the appearance of weight-loss fads in
mainstream media, supported by trusted spokespeople. Our
pending case against NPB Advertising shows how the marketers of
the Pure Green Coffee dietary supplement capitalized on Dr. Oz
having featured green coffee bean extract on his show and
calling it ``magic'' and ``a miracle.''
When consumers see products or ingredients marketed in
sophisticated ways on respected media outlets or praised by
hosts they trust, it can be difficult for them to listen to
their internal voices telling them to beware. That is why we
have long sought the partnership of the media to screen
deceptive diet ads before they run. Our recently issued Gut
Check Reference Guide, sent to media outlets throughout the
country, advises the media on seven weight-loss claims that
experts say simply cannot be true, and that the media should
think twice about before running.
Finally, we recognize that consumers are the first line of
defense against weight-loss fraud. The FTC has developed a full
arsenal of consumer educational materials, ranging from
traditional publications that lay out the facts for consumers
to online teaser websites. And today we launched a new
interactive online consumer quiz.
I want to thank the Committee for focusing attention on
weight-loss scams and for giving the FTC an opportunity to
describe its role. While we may never eliminate weight-loss
fraud, we will continue our efforts to pursue the perpetrators,
work with the media to help prevent fraudulent ads from
running, and educate consumers that trusting their gut instinct
can be a strong protective mechanism.
Thank you, and I'd be happy to respond to any questions.
[The prepared statement of Ms. Engle follows:]
Prepared Statement of Mary Koelbel Engle, Associate Director, Division
of Advertising Practices, Bureau of Consumer Protection, Federal Trade
Commission
I. Introduction
Madame Chair and members of the Committee, I am Mary Engle,
Associate Director for Advertising Practices at the Federal Trade
Commission (``FTC'' or ``Commission''). I am pleased to have this
opportunity to provide information concerning the Commission's efforts
to combat fraudulent and deceptive claims for weight-loss products.\1\
---------------------------------------------------------------------------
\1\ The written statement presents the views of the Federal Trade
Commission. Oral testimony and responses to questions reflect my views
and do not necessarily reflect the views of the Commission or any
Commissioner.
---------------------------------------------------------------------------
As has been reported for years, the United States is facing an
obesity epidemic. More than one-third of U.S. adults (34.9 percent) are
obese.\2\ Combined with those who are overweight, the percentage
skyrockets to nearly 70 percent.\3\ Excess weight and obesity are major
contributors to chronic diseases and present a serious public health
challenge--the medical costs of obesity reached a staggering $147
billion in 2008, and the estimated annual medical costs of obese
persons are nearly $1,500 higher than for those of normal weight.\4\
---------------------------------------------------------------------------
\2\ Cynthia Ogden, Margaret Carroll, ``Prevalence of Childhood and
Adult Obesity in the United States, 2011-2012,'' Journal of American
Medicine, 311(8):806-814 (2014).
\3\ ``Weight Loss Services in the U.S. Industry Market Research
Report from IBISWorld Has Been Updated,'' IBISWorld (Jan. 14, 2014),
available at http://www.prweb.com/releases/2014/01/prweb11486414.htm;
Cynthia Ogden, Margaret Carroll, ``Prevalence of Overweight, Obesity,
and Extreme Obesity Among Adults: United States, Trends 1960-1962
Through 2007-2008'' (2010).
\4\ Eric Finkelstein et al., ``Annual Medical Spending Attributable
To Obesity: Payer-And Service-Specific Estimates,'' Health Affairs, 28,
no. 5 (2009):w822-w831 (Jul. 27, 2009), available at http://
content.healthaffairs.org/content/28/5/w822.full.pdf+html.
---------------------------------------------------------------------------
Last year, Americans were expected to spend $2.4 billion on weight-
loss services,\5\ and this figure is predicted to rise to $2.7 billion
by 2018.\6\ Where there is strong consumer interest, unfortunately
fraud often follows. In our 2011 survey of consumer fraud, the FTC
reported that more consumers were victims of fraudulent weight-loss
products than of any of the other specific frauds covered by the
survey.\7\
---------------------------------------------------------------------------
\5\ ``Weight Loss Services in the U.S. Industry Market Research
Report From IBISWorld Has Been Updated,'' IBISWorld (July 22, 2013),
available at http://www.prweb.com/releases/2013/7/prweb10948232.htm.
\6\ Id.
\7\ FED. TRADE COMM'N STAFF REPORT, CONSUMER FRAUD IN THE UNITED
STATES, 2011: THE THIRD FTC SURVEY (2013), at 17, available at http://
www.ftc.gov/sites/default/files/documents/reports/consumer-fraud-
united-states-2011-third-ftc-survey/130419fraudsurvey
_0.pdf.
---------------------------------------------------------------------------
Scientists agree that the foundation of healthy, successful weight
loss is to eat a healthful, calorie-controlled diet and to increase
physical activity.\8\ They also agree that even proven medications for
weight loss should only be prescribed as an adjunct to lifestyle
changes in order help certain patients adhere more consistently to a
lower calorie diet.\9\ Despite the continuing boom in the weight-loss
industry, there exists very little scientific evidence that pills or
supplements alone will cause sustained, meaningful weight loss.
Moreover, the promise of fast or easy weight loss without changes to
diet and lifestyle is especially pernicious because it may deter
consumers from making the tough but necessary changes that are known to
work.
---------------------------------------------------------------------------
\8\ See Mayo Clinic Staff, ``Weight Loss: Strategies for Success
(Make your weight-loss goals a reality. Follow these proven
strategies)'' (Feb. 26, 2014), available at http://www.mayo
clinic.org/healthy-living/weight-loss/in-depth/weight-loss/art-20047752
(``Hundreds of fad diets, weight-loss programs and outright scams
promise quick and easy weight loss. However, the foundation of
successful weight loss remains a healthy, calorie-controlled diet
combined with exercise. For successful, long-term weight loss, you must
make permanent changes in your lifestyle and health habits''); see also
2013 AHA/ACC/TOS Guideline for the Management of Overweight and Obesity
in Adults: A Report of the American College of Cardiology/American
Heart Association Task Force on Practice Guidelines and The Obesity
Society (Nov. 12, 2013) (Accepted Article), at 20, Box 9, available at
http://onlinelibrary.wiley.com/doi/10.1002/oby.20660/pdf (``Recommended
methods for weight loss: Weight loss requires creating an energy
deficit through caloric restriction, physical activity, or both. An
energy deficit of ≥500 kcal/day typically may be achieved with
dietary intake of 1,200 to 1,500 kcal/day for women and 1,500 to 1,800
kcal/day for men'').
\9\ See 2013 AHA/ACC/TOS Guideline for the Management of Overweight
and Obesity in Adults, supra note 8, at 21, Boxes 10-12.
---------------------------------------------------------------------------
Today I will provide an overview of the Commission's multi-faceted
program aimed at combating fraud and deception in the weight-loss
industry. I will first speak about the Commission's law enforcement
program, then will explain our media outreach efforts, and finally,
will talk about the importance of consumer education.
You might be surprised to learn that the Commission filed its first
weight-loss case back in 1927; since then, we have filed hundreds of
cases challenging false and unproven weight-loss claims. As the
Commission staff stated in its 2002 Weight Loss Report, there exists
``a never-ending quest for easy solutions.'' \10\ The endless flood of
unfounded claims being made in the weight-loss industry vividly
illustrates the challenges we, and consumers, are up against.
---------------------------------------------------------------------------
\10\ FED. TRADE COMM'N STAFF REPORT, WEIGHT-LOSS ADVERTISING: AN
ANALYSIS OF CURRENT TRENDS (2002), available at http://www.ftc.gov/
news-events/press-releases/2002/09/ftc-releases-report-weight-loss-
advertising.
---------------------------------------------------------------------------
Why, then, with such a long history of enforcement in this area,
does weight-loss fraud persist? Unfortunately, there is no perfect
answer. What we do know is that this is an area where consumers looking
for a solution are particularly vulnerable to fraud; that there is an
enormous amount of money to be made in the diet industry; and that
people intent on committing fraud will gravitate toward where the money
is.\11\ While we might never eliminate weight-loss fraud, we will
continue our efforts to pursue the perpetrators, to work with the media
to help prevent fraudulent ads from airing, and to educate consumers on
avoiding weight-loss scams.
---------------------------------------------------------------------------
\11\ See Frank Bruni, ``Diet Lures and Diet Lies'' The New York
Times (May 26, 2014), available at http://www.nytimes.com/2014/05/27/
opinion/bruni-diet-lures-and-diet-lies.html?_r=0. (``Enhanced education
and growing sophistication haven't done away with fads. There's still
too much favor to be curried and money to be made by trumpeting
them.'').
---------------------------------------------------------------------------
II. The FTC's Weight-Loss Fraud Prevention Program
In the past ten years, the Commission has brought 82 law
enforcement actions challenging false or unsubstantiated claims about
the efficacy of a wide variety of weight-loss products and services.
Since 2010 alone, the Commission has collected nearly $107 million in
consumer restitution for deceptive weight-loss claims, and one weight-
loss company paid a civil penalty of $3.7 million for violations of a
prior Commission order.\12\
---------------------------------------------------------------------------
\12\ U.S. v. Jason Pharmaceuticals, No. 12-1476 (D.D.C., filed
Sept. 7, 2012).
---------------------------------------------------------------------------
Our recent cases highlight how the agency has focused its
enforcement priorities on large national advertising campaigns for a
range of weight-loss products with unproven benefits. ``Operation
Failed Resolution,'' announced in January, targeted the newest weight-
loss fads with popular ingredients--food additives, human hormones,
skin creams, and acai berries.\13\
---------------------------------------------------------------------------
\13\ See Fed. Trade Comm'n Press Release, Sensa and Three Other
Marketers of Fad Weight-Loss Products Settle FTC Charges in Crackdown
on Deceptive Advertising: Sensa to Pay $26.5 Million for Consumer
Refunds (Jan. 7, 2014), http://www.ftc.gov/news-events/press-releases/
2014/01/sensa-three-other-marketers-fad-weight-loss-products-settle-
ftc.
---------------------------------------------------------------------------
In our case against Sensa Products, consumers were catchily urged
to ``shake their Sensa'' and lose 30, 40, 90 pounds or more without
dieting or exercise.\14\ We alleged that the defendants' powdered food
additive, available in twelve flavors, was deceptively advertised to
enhance food's smell and taste, making users feel full faster so they
eat less and lose weight. Our consent order required Sensa to pay $26.5
million in redress; this money will be returned to consumers. The
settlement also bars the defendants from making weight-loss claims
about dietary supplements, foods, or drugs unless they have well-
controlled human clinical studies supporting the claims, and it
requires them to disclose any material connections with product
endorsers or anyone participating in or conducting a study of such
products.
---------------------------------------------------------------------------
\14\ FTC v. Sensa Products LLC, No. 14-cv-72 (N.D. Ill., filed Jan.
7, 2014).
---------------------------------------------------------------------------
The FTC's case against L'Occitane arose from that company's
marketing of the Almond Beautiful Shape and Almond Shaping Delight
creams, which it touted as having body slimming capabilities that could
trim inches in weeks.\15\ The Commission's settlement with L'Occitane
bars the company from claiming that any product applied to the skin
causes substantial weight or fat loss or a substantial reduction in
body size, and also requires well-controlled human clinical studies for
claims that drugs or cosmetics cause such results. L'Occitane paid
$450,000 in consumer redress as part of its settlement with the FTC.
---------------------------------------------------------------------------
\15\ L'Occitane, Inc., FTC Dkt. No. C-4445 (Mar. 27, 2014),
available at http://www.ftc.gov/system/files/documents/cases/
140408loccitanedo.pdf.
---------------------------------------------------------------------------
The Commission also filed a case against HCG Diet Direct in
connection with its sale of liquid homeopathic drops, which contain a
diluted form of hCG, a hormone produced by the human placenta.\16\
Users were told they could lose up to one pound a day by placing the
drops under their tongues before meals and adhering to a very low
calorie diet. The Commission's consent order with HCG Diet Direct
requires well-controlled human clinical studies; bars the defendants
from representing that a product is FDA-approved when it is not, and
from failing to disclose any material connections endorsers might have
to the defendants; and imposes a $3.2 million judgment.\17\
---------------------------------------------------------------------------
\16\ FTC v. HCG Diet Direct LLC, No. 14-cv-00015-NVW (D. Ariz.,
filed Jan. 6, 2014).
\17\ The FTC's case against HCG Diet Direct followed on a set of
warning letters the agency staff co-issued in 2011 with staff of the
Food and Drug Administration (``FDA'') to marketers of homeopathic hCG
weight-loss products. The letters warned that the marketers were making
unapproved new drug claims in violation of the Federal Food, Drug, and
Cosmetic Act, and unsubstantiated claims in violation of the FTC Act.
They also stated that the hCG products are misbranded prescription
drugs. See sample warning letter from Mary K. Engle, Associate Director
for Advertising Practices (FTC), and Ilisa B.G. Bernstein, Acting
Director, Office of Compliance, Center for Drug Evaluation and Research
(FDA) (Nov. 28, 2011), available at http://www.ftc.gov/sites/default/
files/documents/public_statements/joint-fda/ftc-warning-letter-
concerning-product-labeling-human-chrorionic-gonadotropin-hcg-drugs/
ucm281528.pdf.
---------------------------------------------------------------------------
The Commission currently remains in active litigation against a
number of other defendants hawking miracle weight-loss products.\18\
---------------------------------------------------------------------------
\18\ FTC v. HCG Platinum, No. 13-cv-02215-HRH (D. Ariz., filed Oct.
30, 2013); FTC v. LeanSpa LLC, 3:11-cv-01715-JCH (D. Conn., filed Nov.
7, 2011).
---------------------------------------------------------------------------
The Commission has noted several disturbing developments with
respect to weight-loss advertising. First is the reliance on
proprietary studies using erroneous or fabricated data. In response to
our requests for scientific substantiation, companies usually will
submit write-ups of human clinical studies, sometimes published in
peer-reviewed journals. While these studies may appear facially
plausible, in a number of cases, we have discovered serious flaws, or
worse, outright fabrications once we obtain the underlying data.\19\ In
the Sensa case for example, the Commission alleged, among other
irregularities, that Sensa's purportedly randomized control trial was
not, in fact, randomized; that it included duplicate subjects; and
that, on multiple occasions, the research firm Sensa hired sent results
to the corporate defendants before the test subjects weighed-in. These
flaws are not isolated to Sensa. In other cases, our examination of the
underlying data has revealed altered, incomplete, or falsely-reported
data.\20\ It goes without saying that these kinds of practices add a
layer of complexity to the FTC's weight-loss investigations.
---------------------------------------------------------------------------
\19\ The staff's ability to obtain raw data may be hampered when
such research has been conducted in a foreign jurisdiction.
\20\ See, e.g., FTC v. Skechers U.S.A., No. 1:12-cv-01214 (N.D.
Ohio, filed May 16, 2012) (FTC complaint alleging that two of the four
studies of the defendant's toning footwear were conducted by a
chiropractor who was married to a senior vice president of marketing at
Skechers; that one of the studies included spouses and parents of its
co-authors as test subjects; and that some subjects who gained weight
or increased their body fat percentage were reported as having lost
weight or reduced their body fat percentage).
---------------------------------------------------------------------------
Another distressing trend is marketers taking advantage of weight-
loss fad ingredients that are propelled to popularity through exposure
in mainstream media supported by trusted spokespeople. For instance,
within weeks of an April 2012 Dr. Oz Show touting green coffee bean
extract as a miracle fat burning pill that works for everyone, the
marketers of the Pure Green Coffee dietary supplement took to the
Internet making overblown claims--like ``lose twenty pounds in four
weeks'' and ``lose twenty pounds and two to four inches of belly fat in
two to three months''--for their dietary supplement. The FTC
investigated, and last month, filed suit.\21\ The complaint alleges
that the defendants deceptively promoted Pure Green Coffee through
their website featuring footage from The Dr. Oz Show, supposed consumer
endorsements, and purported clinical proof that dieters could lose
weight rapidly without changing their diet or exercise regimens. We
also allege that the defendants made deceptive claims on websites they
set up to look like legitimate news sites and blogs, and on other
``fake news'' sites run by affiliate marketers whom they paid to
advertise the Pure Green Coffee product. In all, the defendants are
alleged to have sold more than 536,000 bottles of Pure Green Coffee
since May 2012.
---------------------------------------------------------------------------
\21\ FTC v. NPB Advertising, Inc., No. 14-cv-01155-SDM-TGW (M.D.
Fla., filed May 15, 2014).
---------------------------------------------------------------------------
III. The Commission's Media Screening Guidance on Weight-Loss Claims
When consumers see products and ingredients marketed in
sophisticated ways on respected media outlets and praised by people
they trust, it can be difficult for them to listen to their internal
voices telling them to beware. That is why we have long sought the
partnership of the media to screen deceptive diet ads before they run.
The FTC's recently-issued ``Gut Check'' reference guide advises media
outlets on seven weight-loss claims that experts say simply cannot be
true and that media outlets should think twice about running.\22\ FTC
staff sent this guidance document to major publishers, media outlets,
trade associations, and broadcasters asking them for their help in
protecting consumers (and their own reputation for accuracy) by serving
as a front-line defense, halting false claims before they are published
or aired--and before consumers risk their money and perhaps even their
health on a worthless product.\23\ This is not the first time the FTC
has issued such media advice,\24\ and it likely will not be the last.
Media response to our past initiatives has been positive and based on
our experience, we expect that this effort will be successful in
keeping many facially false weight-loss claims out of mainstream
media.\25\ As we have in the past,\26\ we will follow up with media
outlets (including television, print, and satellite radio) engaged in a
pattern of running problematic weight-loss ads.
---------------------------------------------------------------------------
\22\ The Gut Check guidance identifies the following seven false
claims for dietary supplements, herbal remedies, over-the-counter
drugs, patches, creams, wraps, and similar products:
(1) causes weight loss of two pounds or more a week for a month or
more without dieting or exercise;
(2) causes substantial weight loss no matter what or how much the
consumer eats;
(3) causes permanent weight loss even after the consumer stops
using the product;
(4) blocks the absorption of fat or calories to enable consumers to
lose substantial weight;
(5) safely enables consumers to lose more than three pounds per
week for more than four weeks;
(6) causes substantial weight loss for all users; or
(7) causes substantial weight loss by wearing a product on the body
or rubbing it into the skin.
The guidance is not intended to apply to prescription drugs, meal
replacement products, low-calorie foods, surgery, hypnosis, special
diets, or exercise equipment. See Gut Check: A Reference Guide for
Media on Spotting False Weight Loss Claims (Jan. 7, 2014), available at
http://www.business.ftc.gov/documents/0492-gut-check-reference-guide-
media-spotting-false-weight-loss-claims.
\23\ See model letter from Jessica Rich, Director, Bureau of
Consumer Protection, to media outlets, available at http://www.ftc.gov/
sites/default/files/attachments/press-releases/ftc-has-updated-
guidance-media-outlets-spotting-false-weight-loss-claims-advertising/
140107gutcheckletter.pdf.
\24\ See Fed. Trade Comm'n, Screening Advertisements: A Guide for
The Media (Dec. 2006), available at http://www.business.ftc.gov/
documents/bus36-screening-advertisements-guide-media; Fed. Trade
Comm'n, Red Flag: Bogus Weight Loss Claims (Dec. 9, 2003), available at
http://www.ftc.gov/news-events/press-releases/2003/12/ftc-releases-
guidance-media-false-weight-loss-claims.
\25\ The Commission's earlier media screening initiative effort
resulted in the number of obviously false weight-loss claims in
television, radio, and print advertisements for dietary supplements,
topical creams, and diet patches dropping from almost 50 percent in
2001 to 15 percent in 2004. See Fed. Trade Comm'n Press Release, FTC
Releases Result of Weight-Loss Advertising Survey (Apr. 11, 2005),
http://www.ftc.gov/news-events/press-releases/2005/04/ftc-releases-
result-weight-loss-advertising-survey. Recent monitoring suggests that
this trend is continuing. It should be noted, however, that even though
an advertisement does not contain an obviously false claim, it still
may be deceptive for other reasons, such as for lack of substantiation
for the core efficacy claim.
\26\ See letter from Mary K. Engle, Associate Director for
Advertising Practices (FTC), to Stacey Anne Mahoney (counsel for News
America Marketing FSI, LLC) (Oct. 3, 2008), available at http://
www.ftc.gov/sites/default/files/documents/closing_letters/news-america-
marketing-fsi-llc/081003newsamericaclosing.pdf; letter from Mary K.
Engle, Associate Director for Advertising Practices (FTC), to Nicholas
R. Koberstein (counsel for Valassis Communications, Inc.) (Nov. 14,
2006), available at http://www.ftc.gov/sites/default/files/documents/
closing_letters/valassis-communications-inc./
061114valassisclosingletter.pdf.
---------------------------------------------------------------------------
IV. Consumer Education Initiatives
The FTC seeks to educate consumers as well. The best protection
against weight-loss fraud is a savvy consumer, so the Commission
continually looks for new ways to reach consumers with messages about
how to avoid falling victim to a diet scam. We have issued a number of
consumer education brochures, articles, and blog posts that hammer home
the message that the only thing consumers will lose is money if they
fall for ads promising dramatic weight loss without diet or
exercise.\27\ The Commission also has created teaser websites designed
to reach people who are surfing online for weight-loss products.\28\
And today, we are launching a new consumer quiz--the FTC Weight Loss
Challenge--to help consumers identify weight-loss fraud. This
interactive quiz is designed to help consumers think critically about
weight-loss products and claims. Available in English and Spanish, the
quiz separates fact from fiction in ads for products touting fast
weight loss without the need for diet and exercise.\29\
---------------------------------------------------------------------------
\27\ See, e.g., ``Putting the Squeeze on Bogus Weight Loss
Products'' (Jan. 7, 2014), available at http://www.consumer.ftc.gov/
blog/putting-squeeze-bogus-weight-loss-products; ``What's a Healthy
Weight Loss Plan?'' (Nov. 5, 2013), available at http://
www.consumer.ftc.gov/blog/whats-healthy-weight-loss-plan; ``New Year's
Resolution: Don't Buy Into Diet Ads'' (Jan. 8, 2013), available at
http://www.consumer.ftc.gov/blog/new-years-resolution-dont-buy-diet-
ads; ``Weighing the Claims in Diet Ads'' (Jul. 2012), available at
http://www.consumer.ftc.gov/articles/0061-weighing-claims-diet-ads;
``Weight Loss Promises: Health Information for Older People'' (Oct.
2008), available at http://www.consumer.ftc.gov/articles/0317-weight-
loss-promises-health-information-older-people.
\28\ At first glance, the Commission's ``FatFoe'' teaser site
appears to advertise a new product, ``FatFoe,'' that falsely guarantees
fast, easy weight loss for all users, with no diet or exercise
necessary to lose up to 10 pounds per week permanently. See http://
www.wemarket4u.net/fatfoe/index.html. However, when consumers try to
order FatFoe, they learn the ad is a warning from the FTC about diet
scams. See http://www.wemarket4u.net/fatfoe/results.htm.
\29\ See http://www.consumer.ftc.gov/sites/all/libraries/games/
weightlosschallenge/.
---------------------------------------------------------------------------
V. Conclusion
I want to thank this Committee for focusing attention on weight-
loss scams and for giving the Federal Trade Commission an opportunity
to describe its role. The Commission is committed to continuing to use
all the tools at its disposal to limit consumer injury from deceptive
weight-loss advertising. I would be happy to respond to any questions
about our weight-loss fraud prevention program.
Senator McCaskill. Thank you, Ms. Engle.
Dr. Oz.
STATEMENT OF DR. MEHMET C. OZ, VICE CHAIRMAN AND PROFESSOR OF
SURGERY, COLUMBIA UNIVERSITY COLLEGE OF PHYSICIANS AND
SURGEONS; HOST, THE DR. OZ SHOW
Dr. Oz. Thank you, members of the Committee, for convening
this session--this hearing, and for allowing me to testify.
Consumer scams and fraud related to weight-loss products
have plagued me in my work educating the public since I first
started in the media, long before my talk show launched in
2009. It's a problem that I have spent immeasurable time,
energy, broadcast resources, and money trying to combat. I'm
chagrined to say the problem has only increased exponentially.
However, I'm encouraged that the U.S. Senate has decided to
prioritize this criminal enterprise, and I believe that the
attention provided by this hearing and the contributions of
other witnesses will help, because we can, together with our
collective brainpower, douse the flames of this uncontrolled
wildfire in the interest of protecting the consumer.
A bit of history. After I finished my training, in 1993--it
was about a decade of training, by the way--I began practicing
cardiothoracic surgery at New York Presbyterian Hospital at
Columbia University. As I performed thousands of surgeries on
patients whose hearts had been ravaged by obesity, I realized
we needed to better educate people on how to take part in their
own care. And, for that reason, I went into the public life in
an effort to teach.
I started as a guest on the Oprah Winfrey Show in 2004 and
had my first experiences with scam advertising at that time.
When we discussed supplements like acai berry and resveratrol,
there wasn't anything special about my description of them, but
they--immediately, the Internet ads began springing up, using
pictures of us, show quotes claiming that Ms. Winfrey and I
were supporting these products and selling them. Ms. Winfrey
and I and six attorneys general filed a civil suit against the
companies making these ads. Despite the expense and law
enforcement cooperation, it had very little impact. Ten years
later, we're back. This phenomenon has grown dramatically in
sophistication and scale so that I am forced to defend my
reputation every single day.
These ads take money from trusting viewers, many of whom
believe that I'm actually selling the items. Just to be clear,
in case it comes up, I have never sold supplements.
Out of sheer frustration, I have taken a number of measures
to deal with this problem and protect my viewers. Recognizing--
and I accept the responsibility for this--that the passionate
language I used to describe supplements was fodder for these
unethical advertisements, my show has tempered our editorial on
promising supplements. We have been more stringent in
presenting opportunities, and have included opposing voices on
these segments. This, to my knowledge, has had no discernible
impact. Marketers are still able to select a single phrase of
support without the surrounding context, and continue profiting
unimpeded.
The clip that you showed, and others of--similar ones--if
you look deeper into the shows, I'll almost always mention
something about the fact that there aren't crutches, they are
designed for short-term support, you won't get there without
diet and exercise.
To go further, I have devoted numerous shows to covering
the exact anatomy of how a scam works and what to look for.
I've launched a campaign called, ``It's Not Me,'' and used
various media partners to amplify the coverage. I devote a
portion of every single broadcast to look directly into the
camera--it's the last thing I say to the viewer--and tell them
and reassure them that I don't sell anything. If they see my
name, my picture, or any part of the show involved in an
advertisement, do not buy the product. Check any show you
happen to wander on, you'll see me saying that at the very end.
We also created Oz Watch, which is a way for viewers to
report violations and report scams. Oz Watch has collected more
than 35,000 complaints from our viewers. We even hired a
private company to help with these complaints and police the
Web, and have issued more than 600 cease and desist letters.
After months of investigation paid for by us, I even confronted
an egregious advertiser of Garcinia Cambogia on my show, in
part because we found--this is the part that hurts me; Senator
McCaskill, you mentioned this--not only was he using my--it's
stealing my name--he was also only providing only 10 percent of
the active ingredient. So, whether it works or not, that's a
separate issue. If he doesn't have the product in it, it can't
possibly do anything. By the way, last night, I went online. I
was still able to purchase this product if I wanted to. It's a
fairly shameless series of perpetrators that we're dealing
with.
I have also taken action on my own, without the assistance
of State and Federal agencies. But, I do believe that, working
together, we can achieve a lot more.
Now, before offering any suggestions--and I have a few--let
me address the criticism that my show may be fueling the
Internet scamming problem. I'm respectful of these criticisms.
I encourage a Nation searching for answers to their health
woes. We often address weight loss, because, as you all
mentioned, it affects about two-thirds of the population. If
the only message I gave was to eat less and move more, which is
the most important thing people need to do, we wouldn't be very
effectively tackling this complex challenge, because viewers
know these tips, and they still struggle.
So, we search for tools and crutches for short-term support
so people can jumpstart their programs. We use the alternative
solutions often--commonly used in other countries and other
parts of the world, like in the Ayurveda tradition in
subcontinent of India, traditional Chinese medicine. We feature
cleanses and new diet programs by promising authors. Many of
these are controversial, as are the supplements that we
research and profile. But, I would rather have a conversation
of this material on my stage than in back alleys, because the
conversation will still happen, especially if you can give
viewers the boost that motivates them to engage in wise dietary
choices.
However, today is not a referendum on complementary and
alternative medicine. We're not here to decide if vitamin
supplements make sense. The problem we've been invited to
discuss--Internet scamming and fraud--will begin to recede only
when State and Federal agencies who have jurisdiction over the
scammers amplify their enforcement and a public-private
cooperative effort is undertaken in earnest that includes
everyone on this panel in front of us, including the FTC,
legitimate product manufactures, Internet ad-hosting services,
and media outlets like mine. I need to be a part of this, I
feel passionate about doing this, and I want to play a role.
Since my time is up, I'm not going to cover these
suggestions, but I would like to offer some thoughts, maybe in
the questions later on, about how we can create a Quick
Reference Registry, Instant Device Whistleblowers, and maybe
create a private-sector-funded bounty to assist the FTC in this
very difficult, very challenging task.
Thank you.
[The prepared statement of Dr. Oz follows:]
Prepared Statement of Dr. Mehmet C. Oz, Vice Chairman and Professor of
Surgery, Columbia University College of Physicians and Surgeons; Host,
The Dr. Oz Show
Good Morning. Chairwoman McCaskill, Ranking Member Heller, Members
of the Subcommittee. Thank you for inviting me to testify before the
Committee today on this important issue. My name is Dr. Mehmet Oz and I
am a cardiothoracic surgeon, Vice Chair and professor of Surgery at New
York Presbyterian Hospital at Columbia University. I have authored or
co authored over 400 published academic papers and studies. I have
performed over 5,000 surgeries and was part of the transplant team at
New York Presbyterian, performing heart and lung transplants in my
early surgery career. I hold several patents on surgical devices
related to valves and left ventricular assistance. I completed medical
school at the University of Pennsylvania and also attended the Wharton
School of Business.
I am also a public figure as host of the nationally syndicated Dr.
Oz Show, author of YOU the Owner's Manual and the YOU Series of Books.
I publish a magazine called Dr. Oz The Good Life with Hearst and I have
a newspaper column which run in more than 110 newspapers across the
country.
I am grateful for the opportunity to come before the Committee in
the interest of protecting the consumer. The ``consumer'' to whom we
refer is a person. That person is my viewer and your constituent. They
have placed a trust in both of us for different reasons. You to
represent them in the Senate and me to provide them with information
that is useful, accurate and on which they make decisions. I would
venture to say we both hold this trust to be sacred. But we are here
because that ``consumer'' is now being preyed upon at an alarming and
uncontrolled rate, and its incumbent on all of us here to work together
towards a solution. I have laid out the testimony I plan to provide in
the sections that follow.
Background
In the late 1990s and I was a surgeon at New York Presbyterian at
Columbia in New York City. That morning I had performed a bypass on a
woman who was 25 and obese. I had become accustomed to performing
surgery on younger and younger patients who had advanced cardiovascular
disease. There seemed to be more and more patients under the age of 30
whose obesity had caused life threatening disease.
The operation that morning was a success. I took solace in my usual
post surgical reflection that I was a warrior in a medical field that
had grown so adept at healing with steel and fixing hearts mechanically
that there was little we could not do . I saw my department at New York
Presbyterian Hospital at Columbia as the best in heart surgery and I
could not have been more proud.
I went to check on my patient and although awake only a few hours,
her family and she were celebrating with fast food--the very food that
caused her heart disease. Then the thought struck me, No matter how
many operations I performed, no matter how many hearts I fixed, nothing
would really be impactful in reducing our Nation's number one killer
unless people took responsibility for their part in prevention. Most of
my patients could have avoided surgery by taking better care of
themself. But most were completely oblivious to what role they played
in whether they lived a long healthy life or succumbed to heart
disease.
That evening as I reflected on the day, a conversation with my wife
contained a breakthrough. I needed to reach more people my wife
suggested--perhaps writing for magazines, authoring books and
emphasized that she thought I might do well on television. Her
suggestions were exciting, but I had no idea where to start and even
less energy.
I knew I had to reach people before adolescence where they are most
impressionable. I also knew that fitness and nutrition were not getting
the emphasis they should be getting in our schools. Lisa and I formed
Healthcorps after a successful pilot program in New York City and
modeled it after the Peace Corps. But instead of developing countries,
we work in high need high schools. We raise money to fund coordinators
in high schools to teach mental resilience, fitness and nutrition and
serve as full time instructors for two years. Since its start in 2003,
Healthcorps has grown to over 60 schools in 13 states and the District
of Columbia. We have impacted 300,000 students and nearly 600,000
members of their communities.
As the days and weeks went on Lisa's suggestions about television
made more and more sense and we began to map out very practical steps.
With a background in television production, she sketched out and
produced a show that would explore topics in health and ignited
interest by the Discovery Channel, who eventually decided to air our
small startup talk show we called ``Second Opinion'' in 2003.
To launch ``Second Opinion'' we needed a big name guest and through
a miracle of fate managed to book none other than Oprah Winfrey. Ms.
Winfrey shared our concern that people needed to know more about their
health and after her appearance on my show she invited me to appear on
her talk show which was the number one talk show in the world. One
appearance led to another and another and then a regular slot. Viewers
were on fire with questions, e-mails, letters--all wanting to know what
they could do to feel better, live longer, have more energy and most of
all how to lose weight. We had hit a nerve. We had tapped into a
collective thirst for information and inspiration about healthy living
which really had no pop cultural thought leader. There were famous
doctors, surgeons general, news correspondent M.D.s who were all
excellent at their jobs. But while these predecessors did an fantastic
job of reporting news, writing books and making policy, the public was
looking for someone to also make health simple, fun, and less scary. We
strategized that if we found a way add those elements, we might have a
shot at engaging viewers enough to the point they change how they eat
and live and move towards wellness rather than disease. The idea for
The Dr. Oz Show was born in 2007 and development began.
History and Mission of The Dr. Oz Show
In fall 2009 we launched The Dr. Oz Show in the United States, it
launched internationally in subsequent seasons and currently it is seen
in 118 countries. The most succinct way to describe our mission was to
make The Dr. Oz Show our national conversation on health. We wanted to
provide information that viewers could act upon which would lead them
to a healthy life. One thing I learned from Oprah Winfrey, television's
greatest teacher, was that people didn't changed based on what they
knew, they changed based on how they felt. This explained why my
patients still smoked cigarettes despite knowing it would kill them. It
was a huge breakthrough for me when I internalized that lesson, and the
creation of the Dr. Oz Show aimed to translate that idea into a
practical television format.
To make the Dr. Oz Show succeed in its mission, we have to overcome
certain obstacles I learned in years of conversations with patients. We
have to simplify complicated information. We have to make the material
seem interesting and focus on the ``wow'' factor. We have to let the
audience touch a liver, a heart, a brain, a spleen--things they would
never get to do in their own lives. We need to have fun, use humor, and
show people that laughter is a part of being healthy. It should be
apparent to anyone who has seen our show that we are deliberately
unorthodox in how we produce our program. We seek out the unexpected
demonstrations, costumes, dance routines. I have had various guests
from circus performers to Surgeon Generals to real camels. I will go to
any lengths to get people to think differently about health.
We also cover very serious topics. People need a filter for what
they read in the news. They need interpretation that puts them at ease.
They need information they can act on. They need to know how to care
for loved ones. We cover cancer, diabetes, heart disease and all the
major chronic diseases teaching basic prevention, how to be a smart
patient, new and emerging research and alternative therapies. We see
the show as the forum for a conversation on health that includes
multiple points of view. While talk shows are designed to host debates,
my medical training and each session of grand rounds at the hospital
teaches that there are multiple ways to see a problem, and each point
of view has its own value. Controversial issues like vaccines,
mammograms, medical marijuana and many other topics are all part of our
show. Viewer feedback is positive and our website has close to 4
million page visits per month.
Our website is the show's 24/7 informational concierge. I knew when
we launched that we would never fit everything we need to in an hour,
and people would have to learn about topics at their own pace.
www.doctoroz.com provides both a solution and a platform. We are able
to offer limitless content, show episodes, articles, blogs, lists and
charts that people can print out and bring to their doctor, family
history charts, recipes, exercise instructions--its where the viewer
can go and get information.
By far, the topic that we are asked about the most is weight loss.
We cover it frequently with good reason--its an absolute absolute
pandemic in America and the largest driver of chronic disease. People
feel powerless, they need solutions, they must lose weight to regain
their health. We cover the topic from a physiological, nutritional and
emotional angle--from calories to body image and supplements to plastic
surgery. These conversations are already taking place everywhere in in
our country as people grapple with the Nation's weight problem. We are
one of the very few--possibly sole media outlets whose mission includes
dedication to the issue.
Editorial Coverage of Vitamins and Supplements
It is estimated that 150 million Americans--roughly 2/3--take
vitamins and supplements. Plain and simple these products alter body
chemistry--ideally in a positive way. Up until we launched, there was
no designated thought leader that deciphered the bottom line for
consumers on what supplements were helpful and why. With nutritional
supplements top of mind for our audience and the great risks and
rewards that result form their consumption, we actively research new
and emerging products and trends and news about products found in the
average health food store. We look to published research, expert
guests, our own testing that we do with third party laboratories and
anecdotal testimony from audience members about people's experience
with the various products with the goal of providing useful
information. Our audience is already targeted by manufacturers and they
need better information.
We have aired close to 900 shows in the five seasons since we
launched, and while we cover the entire range of health topics, the
vitamins and supplements, especially those for weight loss have
generated a disproportionate amount of attention. Most of the time, the
general public is hearing about a product on my show for the first time
and there is genuine curiosity. Other times the market springs into
action, often illicitly and a surge of ads appear every time you turn
on a computer.
The general media covers a lot of what we do on the show in various
ways, and I appear regularly on other programs to discuss news or other
topics. More than once there has been criticism from some reporters who
took exception to my use of colorful language in the supplement
segments. They have expressed disagreement with my use of words like
``miracle'' and ``groundbreaking''. We constantly reflect as a show on
which words are the right ones to use and which adjectives we may want
to retire. We are always self correcting, progressing, trying to make a
better show. Do we miss the mark sometimes? Of course. But our work is
affirmed by the millions of e-mails, testimonials, phone calls, from
people who say they saw something on our show that made a difference in
their lives and they are better off. Its affirmed by the 1.5 million
people who signed up for season long Transformation Nation Program in
Season 3 and lost 3 Million pounds through healthier behavior they
learned from watching. Its affirmed by the two million people who
downloaded our New Year's diet plan this January and the 500,000 that
printed out the family history chart to fill out and bring to their
doctor. These are just a few examples, but they confirm for us that we
are speaking in a language that resonates with our audience.
In 2012, we aired a show on a little known supplement called Green
Coffee Extract. This is the supplement that is so prevalent in all the
ads that are being exhibited today.
In this show I used the word ``miracle'' when referring to how
green coffee could melt fat and I explored a new study on the
supplement. I was enthusiastic that it could be a tool to assist people
in losing weight and I knew the audience wanted and needed this
information. After the show aired an explosion of ads and marketing
followed along with criticism that our characterization went to far in
describing green coffee. My way of dealing with it was to construct a
second show and answer the criticism of our original segment. While we
covered Green Coffee in the show, we devoted about half of the hour to
me explaining to viewers that they are being duped by unscrupulous
people who are illegally using my name in ads. The entire discussion of
Green Coffee was prefaced with a warning to the viewer in the interest
of protecting them.
Most importantly, in this show I spent an enormous portion of the
broadcast demonstrating the false ads and how the various retail scams
work--again trying to protect the viewer. I also re-explored green
coffee this time using the audience to reveal their anecdotal
experience after trying the supplement for two weeks. Some had lost
weight, others had not. It seemed to help some people in their weight
loss efforts. The Internet lit up again, the illicit ads proliferated,
and we faced additional criticism.
Because of the cause and effect that green coffee show had on the
now burgeoning scams which were increasing completely unchecked, we
took a long hard look at how we could minimize that effect and where
our editorial could play a role, while simultaneously devising measures
to protect the viewer and giving them a mechanism to report scams.
After constantly reflecting on and refining our language, we broadcast
a show in February 2014, two seasons later on a little known food
called Yacon syrup, which is a sweetener made from a South American
root vegetable and has been in stores for decades. We were deliberately
measured in our language. We didn't use the words ``miracle'' or
``magic,'' we thoroughly listed the potential side effects such as it
cause diarrhea in some of our audience members who tried it. But I did
suggest that it was good alternative sweetener and could assist in
weight loss efforts. But the same thing happened afterwards--the very
next day Yacon syrup was the subject of countless ads, many with my
name and face with the exact same motus operandi as every ad on every
supplement that had come before it. This taught me that regardless of
how much enthusiasm I show in a segment, and whether I use forceful
words like ``miracle,'' and ``magic'' or more conservative language
like ``breakthrough,'' or ``promising'' the result is the same--my
viewers are still victims of fraud and false claims by a sophisticated,
large scale organized criminal enterprise that is being allowed to
operate fully and without any enforcement effort. This concerned me
greatly.
Now completely confounded by this rampant problem, my next solution
was to develop a show in which we found one of these perpetrators and
confronted them. I thought if I made an example out of a company that
was hard at work deceiving viewers that I would be protecting my
audience and scaring others doing the same. We aired a show on May 2014
where I staked out and confronted a company in San Diego that was
selling Garcinia Cambogia under the name ``Miracle Garcinia''. Sadly,
this had little impact on the proliferation of the ad scams as well.
So I stand before you today as a someone who has done everything
possible to try to protect my audience against those who attempt to
hijack the conversation between viewer and doctor. I have collected
close to 35,000 complaints, each one representing a real person--your
constituents--who have been the victim of some type of fraud.
When we write a script, we need to generate enthusiasm and engage
the viewer. Viewers do not watch our show because they are seeking our
dry clinical language. Viewers watch because we use language that is
familiar to them which they would use when speaking to friends and
loved ones. We are a guest in their home every afternoon. To treat that
privilege like an academic lecture in medical school would be a
miscalculation. As a television show, unlike a scientific conference,
we have both the luxury and necessity to use colloquialisms and
vernacular that you probably won't hear at your doctor's office. This
is the essence of why we break through to viewer--we meet them where
they are instead of demand they traverse a river of dry, confusing
terms that are sure to alienate them. Remember--people act on emotion
and how they feel, so a main principle in building our scripts is to
illicit a visceral, emotional reaction from the viewer.
Trademark Infringement and Illicit Advertising of Products Involving
the Dr. Oz Show
Let me be very clear on the following: I do not endorse any
products or receive any money from any products that are sold. I have
never allowed my image to be used in any ad. If you see my name, face
or show in any type of ad, e-mail or other circumstance, its illegal.
I have been grappling with the problem of illicit use of my name
connected to weight-loss scams and other products since before The Dr.
Oz Show even launched. In the years that I was a regular guest on The
Oprah Winfrey Show, I covered two products--Acai Berry and Resveratrol,
which lead to a tsunami of illegal banner ads on the internet. That
began my long battle with this complicated and insidious problem. Below
is a timeline and explanations on the effort the Dr. Oz Show has
undertaken since that time.
9/12/2009: Dr. Oz and Oprah Winfrey file civil suit against merchants
using their likeness to sell and promote acai berry.
Working with attorneys general form six states combined with our
civil suit, we shut down 40 companies that were responsible for the
false advertising. The effort received enormous news coverage. Sadly,
after many were shut down, an equal amount re-appeared soon after and
within a year the amount of perpetrators had more then tripled. In the
five years since that lawsuit the amount of businesses responsible for
the illicit scams is without measure.
9/03/2012: Dr. Oz Announces Oz Watch ``If you see something, send
something''
Stymied by the uncontrolled proliferation of Internet scams
involving our stoled trademark, we created a web based reporting system
for viewers to turn in a URL, spam e-mail, commercial, or any use of my
likeness or of the show. We told the audience to share anything they
find while reminding them never to purchase a product that uses my
likeness or the show. Since its launch in 2012, we have collected
35,000 complaints. Many of the reports are viewers who are the victims
of overt crimes and have had their credit cards billed repeatedly
despite efforts to discontinue purchasing. These complaints are
available to the Committee today and to any state or Federal agency
that wishes to review them in order to take action.
9/12/2012: ``Dr. Oz Fights to Reclaim His Name'' Show
We devoted a show to explaining to the viewer the exact nature of
how these scams work and how easy it is for the companies to operate.
We used this broadcast time which otherwise would have been spent on
useful health editorial content teaching the audience how to navigate
what had become a treacherous environment as the illicit ads and scams
continued to increase.
5/06/2013: Dr. Oz Announces the ``It's Not Me'' Campaign
With the illicit ads and scams now at fever pitch and growing
exponentially, we launched a very public campaign with various media
outlets to remind the public not to buy any products using my likeness.
The campaign devoted a portion of each broadcast to remind viewers that
I sell no products and have no relationship with any vitamin,
supplement or weight loss manufacturers and to NEVER buy anything they
see using my name. That campaign is still underway and will continue in
perpetuity as a consumer protection measure.
4/29/2014: ``Dr. Oz Takes Down the Scammers'' Show
Using the power of the show platform, and frustrated by the scale
of the problem we developed a show that investigated, staked out and
finally confronted a company that was an egregious example of the
Internet scams. This dramatic show can be reviewed on www.doctoroz.com
and was an attempt to send a message to compaies that if they choose to
skirt the law, we will find them and we will expose them.
The breakdown of content collected in the Ozwatch effort is as
follows:
Total Cases Reported to Oz Watch through 5/31/2014: 35,000+
``High Value'' Targets (image/logo/video infringements)
identified: 9,000+
Many reported offenses (thousands) are duplicates. This number
excludes social media.
C&Ds sent to date: 600 (not including YouTube and Facebook
takedowns) to 450+ sites.
Sites taken down + Infringements removed in response to C&D: 300+
C&Ds sent that produced no result: 78
Average Claims Submitted to Oz Watch Per Day: 50
Total YouTube Takedowns to Date: 4,700+ videos
Total SPAM Messages Reported: 28,000+
General breakdown by claim type (not exact):
Online: Website, Facebook, Amazon: 62 percent
E-mail/Text: 28 percent
Other (Television/Radio/Print): 9 percent
In-store: 1 percent
Analysis of a Scam
The following are the types of scams and the mechanisms that we
have identified:
ONLINE DIRECT MARKETING
Online direct marketers design and leverage unscrupulous
business tactics that are intended to elicit an immediate
response or action from prospective consumers.
To reach potential buyers, direct marketers employ a variety of
proven tactics including: display/banner advertisements,
targeted ad words (via Google/Facebook, etc), direct marketing
via e-mail and text message and traditional broadcast media.
Each method typically features an unauthorized image or video
of a celebrity and a number of trusted consumer facing brands
that are intended to establish a sense of trust and familiarity
in the prospective buyer.
ADVERTORIALS + FREE TRIALS
The celebrity images and trusted brands are presented alongside
consumer and celebrity ``testimonials'' on pages that are
considered ``Advertorial''. They display celebrity images and
selectively edit trademarked media in the style of an editorial
or objective journalistic article. To entice prospective buyers
into purchasing a product, direct marketers present offers they
bill as ``free trials''. In order for a prospective buyer to
receive a ``free trial'' they are required to submit their
personal information and as well as credit card to handle
``shipping and handling'' of the free product they are
expecting to receive.
DATA COLLECTION AND ORDER PROCESSING
Once the consumer enters their personal and credit card
information, the order is processed and sent to a fulfillment
center for shipping. In addition to the standard $4.95 shipping
rate consumers believe they are paying for, they are typically
auto-enrolled in a product subscription program wherein their
credit card is billed monthly or until they contact the seller
to cancel. Another malicious tactic used by sellers charges the
consumers credit card for a 3-month supply of a product when
the free-trial transaction is processed. The 3-month supply
often exceeds $150 in cost, which goes directly to the buyer's
credit card. In order to cancel the order, the consumer must
contact the seller to dispute the charge. Some high volume
sellers employ call centers whose sole responsibility is credit
card disputes and mitigation. This is to ensure that their
phone lines are not clogged when new customers phone in to
process new product orders.
WHITE LABEL PRODUCTS AND FULFILLMENT
It is easy to create and distribute a unique brand of health
supplements, as the industry is largely unregulated. There are
a number of companies that manufacture health supplements to
seller specification. The bottles can be prepared without
labels and in any bottle the seller specifies. This means that
sellers have tremendous flexibility with the offers they
present. If one brand of product isn't moving, they can simply
change the name of the product and reprint new labels. The
fulfillment companies that process the orders and ship the
orders often ship from off-site UPS shipping centers. This is
often the return address listed on the mailing labels used in
place of any authentically registered business address.
TRUSTED PARTNERS AND AFFILIATED COMPANIES
This vicious and deceptive consumer cycle is perpetuated by
people and companies that with innate knowledge of ongoing
regulation efforts and a firm understanding of where the gaps
in online governance and compliance are. Techniques and
business models that prove lucrative quickly become industry
standard. Competitors in the direct marketing space will
blatantly steal the media and design elements that are
successfully deceiving consumers and converting new buyers on
competitive sites for use on their own landing pages and
offers. Expert direct marketers easily identify which players
and resources are essential to a product offer that is
successful and lucrative.
When someone proves proficient or technically skilled in one
element of the operation, they are revered and sought after.
Their ideas become new standards for online direct marketers.
EVADING ENFORCEMENT
Marketers can register a fly-by-night LLC in Delaware,
establish a drop shipment address at a UPS shipping center,
update digital marketing materials, print new product labels
and invest considerable financial resources into marketing a
new product offer in a matter of days. The illegal aspect of
their operation that first got our attention is unwarranted use
of our trademark in their marketing materials, but we are most
concerned with the consumer being misled. Most direct marketers
will only leverage our trademark in the advertorial page that
appears before a consumer submits their personal and credit
card information. The advertorial pages are often hosted on
``bulletproof'' servers with private domain registration in
place. Because marketers are able to evade enforcement by
concealing their identity when a domain host sends a trademark
claim to their attention, they simply repeat the process.
In summary, a direct marketer establishes a connection with a
potential buyer via traditional advertising or direct
marketing. When the potential buyer clicks a link, they are
funneled into a conversion cycle that is laden with
unauthorized trademarked material on advertorial pages designed
to elicit an immediate action from the buyer. All links on the
advertorial page link directly to a product landing page and
data capture form.
Proposed Solutions and Suggestions
The uncontrolled proliferation of illicit advertising of weight-
loss scams on the Internet is a large scale orchestrated criminal fraud
that amounts to hundreds of million of dollars in illegal profits and a
grave threat to the health of any person buying and ingesting products
from a dishonest seller. There has been a paucity of enforcement of
existing laws on the quality and safety of the products, the method of
billing which results in fraud or theft by deception, and the rampant
and constant trademark infringement. If ever there were an opportunity
and an urgency to protect the consumer, this is it.
I believe that we have existing laws that allow for the enforcement
of these scams. I believe the power of this committee is critical in
shedding light on the situation and raising its level of priority with
the appropriate enforcement agencies. I do not think additional
regulation or oversight is necessary.
Here are my suggestions as a starting point to deal with this
problem:
Initiate greater intra-agency cooperation between the FTC,
FDA, FBI, Congress and State Attorney General offices and the
private sector companies (via trade organizations) to identify
offenders and shut them down.
Development of a ``master list'' of celebrity endorsements
retained by the FTC for quick identification of violators. This
would be of great assistance to the celebrities who have no
practical recourse for trademark infringement and enable the
FTC and law enforcement to look in the obvious places in an
effort to protect the consumer.
Web hosting and Internet advertising platforms must bear
some responsibility for hosting egregious and obvious false ads
or criminal content. A master list would be a useful tool and
if developed, ad hosting services could be expected to cross
reference celebrity content and expected to refuse purchases
for violators as well as report the purchaser.
It's my hope that we leave today with a commitment to cooperate in
protecting the consumer. You have my absolute commitment to provide
whatever I can that will be of assistance in any of your efforts or
with any of the agencies you deem appropriate. I also will continue my
earnest efforts to be a public advocate on this issue and use the power
of my show and various media platforms to keep it in the public eye.
Thank you for the opportunity to testify.
Senator McCaskill. Thank you, Dr. Oz.
Mr. Peeler
STATEMENT OF C. LEE PEELER, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, ADVERTISING SELF-REGULATORY
COUNCIL; EXECUTIVE VICE PRESIDENT, ADVERTISING SELF-REGULATION,
COUNCIL OF BETTER BUSINESS BUREAUS
Mr. Peeler. Thank you, and good morning. I appreciate the
opportunity to testify on the ongoing work of the advertising
industry's self-regulatory system, particularly as it applies
to weight-loss advertising.
This system was created in 1971 by the Nation's leading
advertising trade associations, in cooperation with the Council
of Better Business Bureaus. Since that time, we have pioneered
a rigorous form of self-regulation that is impartial--it is
administered by the Council of Better Business Bureaus. It is
comprehensive--it applies to all national advertisers in all
media. It's transparent--all of our decisions are publicly
reported. And it's effective--companies that do not participate
in the process, or don't follow our recommendations, are
publicly referred to the appropriate government agency, usually
the Federal Trade Commission.
We work on a case-by-case basis, actively monitoring
national advertising for questionable claims and practices, and
we apply FTC-type standards to those claims. Each year, we
issue almost 200 decisions on a wide variety of advertising
issues, including about a dozen last year that addressed
advertising of weight-loss claims and required the company to
stop or modify the ads in question.
Self-regulatory claims for weight-loss products include
issues ranging from technical, easy-to-remedy disclosure
questions to questions about the validity of complex underlying
studies that support the advertiser's claim. For example, one
recent NAD decision addressed advertisements for a product
called ``Garcinia Cambogia,'' including claims it had been
clinically proven to promote four times more weight loss than
diet and exercise. Some of the claims were contained in a
special report on how to lose 28 pounds in 1 month with two
healing cleanses recommended by Dr. Oz. Other claims cited
results of specific studies as support for the weight-loss
claims. In this case, the advertiser told us that that special
report that I referred to earlier was posted by an unauthorized
third party, and the advertiser immediately took steps to take
the report off the Internet. The NAD determined that the
remaining specific product performance claims and ingredients
claims should be discontinued in their current form. The
advertiser fully cooperated with the review and agreed to
discontinue the claims, as do about 90 percent of the companies
that participate in the process. We had a very similar case
with one of the other ingredients that's popular in this area,
Raspberry Ketone.
Our casework complements that of the Better Business Bureau
system in protecting consumers. BBBs handle hundreds of
advertising review cases locally, including claims associated
with weight-loss products and services. BBBs also work to
resolve complaints about business practices, and are uniquely
positioned to identify local and national scams as they emerge,
and warn consumers about them. We are a major outlet for the
educational material that the FTC witness described earlier,
because we have over 100 Better Business Bureaus located around
the country.
Last year, Better Business Bureaus handled thousands of
complaints about weight-loss products and services, including a
growing number of complaints about weight-loss clinics. BBBs
often find that unsubstantiated weight-loss claims are also
associated with problematic billing practices and ``autoship''
programs, underscoring the adage that misleading weight-loss
claims frequently lighten only the consumer's wallet.
These overall results are consistent with those observed by
our St. Louis BBB that serves eastern Missouri and southern
Illinois, except that the St. Louis BBB has not seen the rise
in the number of weight-loss clinic ads in that particular
jurisdiction.
Self-regulation works only if it has the support of the
industry and the government. In the area of weight loss, two
associations in particular, the Electronic Retailing
Association and the Council for Responsible Nutrition, have
stepped forward to provide the types of no-strings-attached
funding that allows us to do our impartial monitoring and
decisionmaking work. Similarly, although there is no formal
relationship between the advertising self-regulation process
and the government, decades of support by the Federal Trade
Commission have been absolutely critical in the success of the
process.
Although there have been significant efforts by the Federal
and State government to control unsubstantiated and exaggerated
claims, more can be done. One of the things that I think
everybody agrees on is, the type of State and Federal
enforcement actions that the FTC has been bringing. Those are
critical to controlling this type of advertising.
In addition, trade associations whose members include
representatives of weight-loss industries need to follow the
example set by the Electronic Retailing Association and the
Council for Responsible Nutrition, and step up and support
increased self-regulatory monitoring of the marketplace. It's
good for businesses. It's good for consumers.
Finally, the FTC's renewed effort to enlist consistent
support of the media in guarding against the most egregious
types of weight-loss claims is a key step. Network
broadcasters, for example, have fairly sophisticated processes
for network ads. And similarly, in the new media, Google has
recently introduced a new approach to ad screening that's
tailored to that specific new media. But, there are lots of
other media outlets--independent TV channels, cable television,
satellite radio, and radio--that are not doing as much.
And finally, I guess I'd just close with an anecdote. Just
this weekend, I got a spam e-mail. It was for a product called
``Forskolin.'' It said if I took the product, I would never
have to diet again. And when I went on the Internet and used
Google Earth, I found that the return address was for a post
office box. So, it was sort of a regulatory trifecta. It was a
spam e-mail, for a ``red flag'' claim that no one can
substantiate, with a seller that nobody could find.
Thank you.
[The prepared statement of Mr. Peeler follows:]
Prepared Statement of C. Lee Peeler, President and CEO, Advertising
Self-Regulatory Council Executive Vice President, Advertising
Self-Regulation Council of Better Business Bureaus (ASRC)
I appreciate the opportunity to describe for the Subcommittee the
ongoing work of the advertising industry's system of self-regulation,
particularly as it applies to weight-loss advertising.
According to a recent Gallup poll,\1\ 51 percent of American
consumers want to lose weight. Weight-loss products come in all sizes
and flavors: pills, creams, patches, diets and devices--to name a few.
Weight-loss products and fads have long been ubiquitous and popular
with consumers. They are, therefore, a primary subject of advertising
self-regulatory review proceedings. Current concerns about the Nation's
spiraling obesity rates can make unsubstantiated or exaggerated claims
of effortless weight loss even more appealing to consumers than in the
past. And that means it is even more important to have a process for
separating truthful claims about effective products from exaggerated,
unsupported or outright false claims about products that don't work.
---------------------------------------------------------------------------
\1\ Americans' Desire to Shed Pounds Outweighs Effort
http://www.gallup.com/poll/166082/americans-desire-shed-pounds-
outweighs-effort.aspx
---------------------------------------------------------------------------
Advertising Self-Regulatory Council (ASRC)
The advertising industry's self-regulatory system was created in
1971 when three leading advertising trade organizations--the 4A's,
American Advertising Federation (AAF) and Association of National
Advertisers (ANA)--together with the Council of Better Business Bureaus
(CBBB), announced a new alliance to promote truthful and accurate
advertising. That alliance, now called the Advertising Self-Regulatory
Council or ASRC, sets policies and procedures for advertising industry
self-regulation. In addition to the founding partners, the ASRC Board
now includes the chief executives of the Electronic Retailing
Association (ERA) and Interactive Advertising Bureau (IAB), giving ASRC
significant reach throughout the advertising and marketing community.
Advertising Self-Regulation
ASRC has pioneered a unique form of self-regulation. Our programs,
described in Appendix A, are:
Impartial and administered by a third party--the Council of
Better Business Bureaus.
Comprehensive--they apply to all national advertisers in all
media
Transparent--all decisions are public both for guidance to
the industry and to ensure public accountability.
Effective--although the self-regulatory system is voluntary,
there are consequences for non-participation or non-compliance,
including public referral to the appropriate government agency,
usually the Federal Trade Commission (FTC).
Administration by the Council of Better Business Bureaus (CBBB)
To ensure the impartiality and independence of the self-regulatory
process, the system is administered by the CBBB. The CBBB is the
network hub for the Better Business Bureau system in the United States
and Canada, which works to promote trust in the marketplace.
Operation of the Self-Regulatory System
All ASRC programs operate on a standard model. While the programs
accept challenges and resolve disputes between competing advertisers,
they also actively monitor national advertising for questionable claims
or practices that may violate industry guidelines \2\ or principles.\3\
---------------------------------------------------------------------------
\2\ Self-Regulatory Program for Children's Advertising
http://www.asrcreviews.org/wp-content/uploads/2012/04/Guidelines-
FINAL-FINAL-REVISED-20142.pdf
\3\ The DAA Self-Regulatory Principles
http://www.aboutads.info/principles
---------------------------------------------------------------------------
Active monitoring is particularly important in the weight-loss area
where consumers are often reluctant to complain and may attribute poor
results from the products to themselves, rather than to the product.
Staff monitoring is supplemented by a robust competitor challenge
process. As the United States Supreme Court observed last week:
``Competitors who manufacture or distribute products have detailed
knowledge regarding how consumers rely on certain sales and marketing
strategies. Their awareness of unfair competition practices may be far
more immediate and accurate than that of agency rulemakers and
regulators.'' \4\
---------------------------------------------------------------------------
\4\ Pom Wonderful LLC v. Coca-Cola Co.
Supreme Court of the United States, Slip Opinion at page 11-12,
June 12, 2014
---------------------------------------------------------------------------
By providing a fast, expert forum to resolve these complaints and a
transparent public record of the resolution, ASRC programs harness this
expertise to serve the interests of the public.
Self-regulatory cases for weight-loss products may involve a range
of issues from technical and easy-to-remedy disclosure questions, to
questions about the validity of complex underlying studies. In some
cases, we recommend that the advertiser make certain modifications to
the advertising. In others, we may recommend discontinuance of the
entire ad. If an advertisement is the subject of an FTC order, court
order or ongoing litigation we will advise the parties that the
complaint is not, or is no longer, appropriate for investigation in
this forum.
When a self-regulatory inquiry is opened, the advertiser is asked
to provide its support for a questioned claim. The advertiser's support
for the claim is reviewed by skilled attorney staff, who then issue a
decision that analyzes the claims made in the ad, the advertiser's
support (substantiation) for the claims and the fit between the two.
The advertising self-regulatory process is both similar to and
different from government enforcement. It applies the same standards
for claim substantiation as the FTC, but it does not have subpoena
power to compel the production of documents and relies on evidence
voluntarily produced by the parties. The self-regulatory process is
comparatively short. Both the National Advertising Division (NAD) and
Electronic Retailing Self-Regulation Program (ERSP) strive to resolve
cases in 60 to 90 days.
Overall, the self-regulatory system issues roughly 200 decisions
each year. While there are no sanctions (penalties, redress, etc.)
beyond requiring discontinuance or modification of advertising, the
relative time-to-decision makes self-regulation a very valuable
addition to the existing government regulatory framework for
advertising. It helps ensure that industry members comply with strong
standards and frees government resources to focus on the most egregious
cases. Overall, more than 90 percent of advertisers voluntarily
participate in the program and make recommended changes to their
advertising.
Funding for Self-Regulation
The advertising-self regulatory system is funded entirely by the
advertising industry through the sales of products and services--
including dispute resolution services and online access to self-
regulatory decisions--national partnerships with the CBBB and direct
funding of programs through trade associations.
FTC Support for Self-Regulation
During more than 40 years of practice, the advertising self-
regulatory system has received strong support from the FTC.\5\
---------------------------------------------------------------------------
\5\ ``Truth or Consequences: The FTC Approach to Advertising''
Remarks of Commissioner Jon Leibowitz at The National Advertising
Division Annual Conference--September 24, 2007
``All of us at the FTC appreciate the NAD's advertising review
work. It is more important today than it has ever been.. . .It really
helps to have an alternative procedure that is quick, fair, and well-
respected.'' http://www.ftc.gov/speeches/leibowitz/070924bbbremarks.pdf
The Federal Trade Commission at 100: Into Our Second Century
The Continuing Pursuit of Better Practices: A Report by Federal
Trade Commission Chairman William E. Kovacic--January 2009.
``Meaningful self-regulation is an important complement to the
Commission's law enforcement efforts--particularly in the area of
deceptive marketing practices. For example, the program administered by
the National Advertising Division/National Advertising Review Council
(``ASRC'') arm of the Council of Better Business Bureaus (``CBBB'') has
worked well to obviate the need for Commission action in some
instances.'' http://www.ftc.gov/ftc/workshops/ftc100/docs/
ftc100rpt.pdf.
Self-Regulation in the Infomercial Industry:
Deborah Platt Majoras, Chairman, Federal Trade Commission
Before the Electronic Retailing Self-Regulation Program--April 2006
(Footnote No. 3, listing FTC statements in support of self-
regulation since 1978.)
http://www.ftc.gov/speeches/majoras/060503eraspeech.pdf.
---------------------------------------------------------------------------
Although there is no formal relationship between the government and
the self-regulatory system, the FTC's ongoing support for self-
regulation contributes meaningfully to the success of the process.
Referrals to the FTC of advertisers that refused to participate in the
self-regulatory process have resulted in FTC lawsuits and significant
monetary penalties.\6\
---------------------------------------------------------------------------
\6\ Court Orders Spammers to Give Up $3.7 Million
http://www.ftc.gov/opa/2009/07/spear.shtm ;
---------------------------------------------------------------------------
Further, FTC guidance on advertising issues, including the ``FTC
Guides Concerning the Use of Endorsement and Testimonials in
Advertising,'' ``Dietary Supplement Advertising Guidelines'' and its
recently published ``Gut Check: A Reference Guide for Media on Spotting
False Weight Loss Claims,'' provides valuable counsel for advertisers
and self-regulatory bodies. The FTC's guidance is further enforced
through the decisions of the self-regulatory system, which applies FTC
standards to its review of specific ads.
Better Business Bureau Advertising Reviews
The work of the national advertising self-regulatory programs
complements the role of the Better Business Bureau (BBB) system in
protecting consumers. BBBs maintain active advertising monitoring
programs in their communities under the BBB Code of Advertising. BBBs
handle hundreds of advertising review cases, including pricing claims,
inadequate disclosures and qualifications, superiority claims, rebates
and warranty and guarantee claims.
BBBs also work to resolve complaints about business practices and
are in a unique position to identify potential scams--both locally and
nationally--and warn consumers about fraud. BBBs also have excellent
access to the media outlets in their communities.
The BBB notes that more than 4,300 complaints about weight-loss
supplements were filed nationwide in 2013, including complaints about
paying for but not receiving merchandise, refund and exchange issues
and potentially misleading claims.
The BBB system, which makes its ratings and business reviews
available to all consumers, can provide consumers a resource by
allowing them to check a company's complaint history before making a
purchase.
Complaint data from the BBB system is shared with both Federal and
state law enforcement agencies. In fact, complaints from the BBB system
makes up more than 20 percent of the data in the FTC Consumer Sentinel
fraud detection database and information from complaints filed with
BBBs is often used by Federal and state law enforcement agencies to
build cases, including cases against companies that sell bogus weight-
loss products.
Advertising Self-Regulation and Weight-loss Claims
Truthful and substantiated advertising for weight-loss products,
diets and exercise devices that work can be of substantial assistance
to consumers seeking to achieve and maintain a healthy weight.
Misleading, unsubstantiated or exaggerated advertising claims--
often for products promising quick, effortless weight loss--have the
opposite effect, causing both health and economic injury to consumers.
In addition to harm done to consumers, these types of claims also
injure honest competitors who promote effective products and whose ads
acknowledge the difficulty consumers may face in losing weight and
sustaining weight loss.
Misleading advertising both misappropriates sales that would
otherwise go to legitimate products and services and undermines the
credibility of advertising generally, making it more expensive for
honest advertisers to reach their audiences. Recognizing these twin
harms, two industry trade associations--The Electronic Retailing
Association (ERA) and the Council for Responsible Nutrition (CRN)--have
stepped forward to fund impartial monitoring and oversight of
advertising claims, including a substantial number of weight-loss
claims.
In 2004, the ERA funded the development of the ERSP program, which
provides independent monitoring of all direct-response advertising for
a wide range of products, including weight-loss products.
Since its founding, the ERSP program has issued more than 350
decisions, often requiring modification or discontinuance of the
challenged advertising. Almost one-third of all ERSP cases have
involved weight-loss claims.
In 2006, CRN provided the National Advertising Division with
funding for an attorney who would concentrate on monitoring advertising
claims for dietary supplements. Since 2006, NAD, through this
initiative, has examined advertising claims made for 164 separate
supplements, including 30 weight-loss products.
Although the majority of advertisers comply with the
recommendations of the self-regulatory system, those who decline to
participate in an ERSP or NAD review or refuse to implement recommended
changes are referred to the most appropriate Federal regulatory agency,
most often the FTC.
Current Issues in Weight-Loss Advertising
While diet fads come and go, certain troublesome claims regularly
appear, including claims that a supplement is ``clinically proven'' to
work or is ``doctor recommended.'' Claims that state or imply that
products will provide fast, effortless weight loss without any changes
to diet or exercise are published over and over again. (Appendix B:
Weight-Loss Claims Digest)
It is not uncommon to find that a product has not been tested or
that the results of testing on a product's ingredients do not support
the advertiser's claims. Although the FTC's 2009 revisions to the
``Endorsements and Testimonial Guides'' have improved compliance,
unsupported testimonials from ``real users'' and misleading ``before''
and ``after'' pictures remain a significant concern.
Some media, like the major national broadcast television networks,
and some new media like Google, have relatively sophisticated
advertising clearance and screening processes. Others do not, and
should be called upon to implement effective screening protocols,
particularly for weight-loss products. Such screening is good for
consumers, for honest advertisers and for the media in general.
Meanwhile, the volume of media channels available to promote
products has exploded, along with the use of ``affiliate marketing'' in
which multiple sellers make--and often elaborate on--claims made for
weight-loss products like acai berry and green coffee products.
Products promoted by unsubstantiated or exaggerated claims are often
marketed through spam e-mails and all marketers are increasingly using
social media -Pinterest, for example--to promote their products.
For example, a recent NAD decision addressed claims made for a
product called Garcinia Cambogia Formula, including claims that the
product had been clinically proven to promote four times more weight
loss than diet and exercise.
Some of the claims were contained in a ``Special Report'' on how to
lose 28 lbs. in one month with products recommended by Dr. Oz.
Other claims included:
``It's scientifically proven to tear away fat from your
body. In studies taken out by renowned health research
institution Queens University in Canada, Garcinia Cambogia was
proven to ignite your metabolism and therefore fat burning
capabilities by around 300 percent when taken regularly.''
The advertiser asserted that the ``Special Report'' and claims made
in that report were posted by an unauthorized third party and
immediately took steps to have the report taken off the
Internet.
This now deleted ``Special Report'' appeared to be a ``fake'' news
report similar to advertisements by acai berry supplement manufacturers
promising rapid and dramatic weight loss that were the subject of FTC
enforcement actions in recent years.
NAD determined that the remaining product performance and
ingredient claims promising weight and fat loss should be discontinued
based on the lack of reliable scientific evidence demonstrating that
the product, or its ingredients, elicit the claimed benefits. The
advertiser fully cooperated in the review and agreed to discontinue the
claims reviewed by NAD.
Additionally, we have seen--and taken action against--the use of
seemingly independent diet product review sites that are in fact
controlled by marketers. (For example, one marketer operated a diet-
review site that stated: ``there are now literally thousands of weight-
loss products and diet programs available to choose from . . . Our goal
is to give you a quick snapshot of what options are available to
you.'')
Finally, BBB advertising review programs from around the country
indicate consumer complaints and ad review issues focusing on weight-
loss clinics.
The BBB notes that weight-loss products and programs (like weight-
loss clinics) marketed with exaggerated or unsubstantiated claims are
often also associated with problematic billing practices, poorly or
entirely undisclosed negative option ``auto ship'' plans and a failure
to make refunds for returned products.
While BBB notes that overall complaints about negative-option
shipping issues are decreasing and are not limited only to weight-loss
supplements, complaints regarding the practice remain significant.
Recommendations
Although there have been significant efforts by federal, state and
self-regulatory organizations to control unsubstantiated, exaggerated
and misleading claims in the weight-loss marketplace, more can done.
State and Federal enforcement actions are critically important and
support the self-regulatory system by underscoring for companies
working in the weight-loss marketplace the seriousness of these claims.
Trade associations whose members include representatives of weight-
loss industries should follow the example set by ERA and CRN and step
up to support self-regulation of the marketplace. Experience shows
self-regulation can be an effective tool in producing prompt, voluntary
compliance by many advertisers. That is good for honest competitors in
the weight-loss industry and it is good for consumers.
The FTC's renewed effort to enlist the consistent support of the
media in guarding against the most egregious weight-loss claims is key,
as well. Guidance from both the FTC and the self-regulatory system is
public and available for review.
Small- and medium-sized media outlets may not be able to conduct
the detailed review of weight-loss advertising claims that NAD and ERSP
apply, but they can 5 and should check the advertisements they accept
for publication against the very straightforward screening criteria
suggested by the FTC, review the ads against self-regulatory decisions
already published by the ASRC and check the advertiser's complaint
history with the BBB.
These steps aren't foolproof, but collectively they help bleed
false and misleading claims from the weight-loss marketplace, level the
playing field for honest advertisers and help bolster consumer
confidence in advertising.
Appendix A: Advertising Industry Self-Regulation In Brief
Advertising Industry Self-Regulation
Advertising Industry Self-Regulation has pioneered the use of
independent, transparent oversight to assure compliance with industry
standards. More than 90 percent of advertisers who participate in the
advertising industry's system of self-regulation voluntarily comply
with its decisions. Failure to participate or to comply with decisions
results in public referral to the appropriate government agency.
The Advertising Self-Regulatory Council is the governing body for
advertising self-regulation. ASRC's 11-member Board of Directors is
comprised of the top leadership of the 4A's, American Advertising
Federation (AAF), Association of National Advertisers (ANA), Council of
Better Business Bureaus (CBBB), Electronic Retailing Association (ERA)
and Interactive Advertising Bureau (IAB).
The Self-Regulatory Programs:
NAD--The National Advertising Division (NAD) monitors
national advertising in all media, enforcing high standards of
truth and accuracy. NAD examines advertising claims made for
goods and services as diverse and critical as
telecommunications, infant nutrition, over-the-counter
medications and dietary supplements and ``green'' products. NAD
accepts complaints from consumers, competing advertisers and
local Better Business Bureaus. NAD's decisions represent the
single largest body of advertising decisions in the U.S.
In addition to its own monitoring, NAD provides a fast, expert
forum for the resolution of competitors' disputes. NAD handles
about 150 cases each year and publicly reports its formal
decisions.
NAD/CRN--Created in cooperation with the Council for
Responsible Nutrition, the NAD/CRN program has expanded NAD's
review of advertising for dietary supplements, a nearly $35
billion industry.
Accountability Program--Developed in cooperation with the
Digital Advertising Alliance (DAA), the Online Interest-Based
Advertising Accountability Program is charged with ensuring
industry compliance with the Self-Regulatory Principles for
Online Behavioral Advertising (Principles). The Principles
require third parties to provide consumers with an easy-to-use
mechanism that allows the consumer to exercise choice regarding
the collection and use of data from their device for online
behavioral advertising (OBA) purposes. The Accountability
Program announced its first formal decisions in November 2011.
CARU--Recognizing the special vulnerability of young
children, the Children's Advertising Review Unit (CARU) holds
advertisers to a high standard of truth and appropriateness
when they direct advertising to young children. Among other
things, CARU's guidelines provide that advertisers can not
state or imply that their products will make children more
popular with their peers, advertise vitamins or other products
that carry ``keep out of reach of children'' labels, or
advertise products that are unsafe for young children to use.
CARU examines advertising in all media, including electronic
media, and monitors Websites to assure that they are compliant
with CARU's guidelines.
The Initiative--The Children's Food and Beverage Advertising
Initiative (Initiative) is an ASRC-endorsed program, run by the
CBBB. The Initiative responds to concerns regarding food
advertising to young children. It is comprised of 17 leading
food and beverage companies. It promotes the advertising of
healthier products in children's media and publishes regular
reports on compliance with its principles.
ERSP--Developed with the Electronic Retailing Association,
the Electronic Retailing Self-Regulation Program (ERSP)
examines the truth and accuracy of core claims made in
electronic direct-response advertising. ERSP monitors the $170
billion direct-response marketplace, providing a strong self-
regulatory presence on the frontier of electronic commerce.
NARB--The National Advertising Review Board is the appellate
body of the self-regulatory system. It is made up of industry
professionals who hear appeals of decisions by NAD and CARU.
NARB panel members are nominated by the ASRC Board of
Directors.
ASRC programs are funded through a variety of sources, including
through the support of industry associations (ERA, CRN, Digital
Advertising Alliance), the direct support of children's advertisers and
child-directed media and revenue from the sale of products and
services. National Partnerships with the CBBB makes up the remainder.
Self-regulation is good for consumers. The self-regulatory system
monitors the marketplace, holds advertisers responsible for their
claims and practices and tracks emerging issues and trends.
Self-regulation is good for advertisers. Rigorous review serves to
encourage consumer trust; the self-regulatory system offers an expert,
cost-efficient, meaningful alternative to litigation and provides a
framework for the development of a self-regulatory solution to emerging
issues.
To learn more about supporting advertising industry self-
regulation, please visit us at: www.asrcreviews.org.
Appendix B: Weight-Loss Claims Digest
Weight-Loss Claims Digest
The National Advertising Division (NAD) and Electronic Retailing
Self-Regulation Program (ERSP) are investigative units of the U.S.
advertising industry's system of self-regulation.
NAD seeks to ensure that claims made in national advertising are
truthful, accurate and not misleading. NAD requires that objective
product performance claims made in advertising be supported by
competent and reliable evidence. NAD cases can be initiated through
staff monitoring of advertising claims or through ``challenges'' to
advertising claims filed by competitors, consumers, or public-interest
groups. NAD also receives a significant number of dietary supplements
cases from the Council for Responsible Nutrition (CRN) initiative. CRN,
a trade association representing dietary supplement manufacturers,
files challenges with NAD to encourage manufacturers to provide
substantiation for their advertising claims to ensure that claims are
truthful, not misleading and are substantiated with credible scientific
evidence.
Since 2006, NAD and the National Advertising Review Board--the
appellate arm of the self-regulatory system--have issued more than 30
decisions that specifically addressed claims made for ``weight-loss''
supplements.
ERSP is responsible for evaluating the truth and accuracy of core
claims made in direct response advertising. ERSP inquires about the
evidentiary support that a marketer possesses for claims made in
direct-response advertising, and determines whether the marketer has
provided a reasonable basis for the representations. Advertising comes
to the attention of ERSP through its monitoring program, consumers, and
challenges from competitors.
While diet fads come and go, certain claims regularly appear in
advertising for weight-loss products, including claims that a product
is ``clinically proven,'' ``doctor recommended,'' or works without any
changes in diet or exercise.
It is not uncommon to find that a product has not been tested or
that the results of testing on a product's ingredients do not support
the claims made. Unsupported testimonials from ``real users'' and
``before'' and ``after'' pictures remain consistent issues in weight-
loss advertising.
Safety Claims
Healthy Life Sciences, LLC
Healthe Trim Weight Loss Dietary Supplements
Case #5641 (10.10.13)
Claim at Issue:
Healthe Trim is perfectly safe.
NAD Findings: The advertiser submitted a 12-week study that
demonstrated that, for the duration of the study, the supplement was
well-tolerated by the participants. However, the advertiser did not
have any long-term studies demonstrating the safety of Healthe Trim
after twelve weeks. Further, study participants were required to limit
their caffeine consumption to one serving a day or less. NAD
recommended that the advertiser modify its safety claim that ``Healthe
Trim is perfectly safe'' to include a reference to the length of time
that the safety of Healthe Trim was studied and also that the safety
study was conducted on participants who limited their caffeine intake
to one serving a day or less. Such disclosures should be prominent and
appear in close proximity to the safety claim.
Clinically Proven Claims
Zylotrim, LLC
Zylotrim Weight Loss Supplement
Case #207 (3.4.09)
Claims at Issue:
``Clinically proven to more than double the activity of fat
burning enzymes''
`` ``80 percent of each pound that was lost was pure body
fat''
``Rated #1 weight loss active ingredient!''
ERSP Findings: ERSP concluded that the marketer's evidence did not
adequately support its claim that Zylotrim is ``clinically proven to
more than double the activity of fat burning enzymes'' or that ``80
percent of each pound that was lost was pure body fat'' and recommended
that these claims be either modified or discontinued. ERSP also
determined that the ``Rated #1 Weight Loss Active Ingredient'' claim is
inaccurate and should be either modified or discontinued in the current
context in which the claim is presented in the advertising and on the
product packaging.
``Before and After'' Depictions
Wellnx Life Sciences, Inc.
NV Hollywood Weight-Loss Supplements
Case # 5629 (9.10.13)
The evidence offered in support of advertising claims must mirror
the claims in scope and nature.
Claims at issue:
Lose weight fast!
Incredible weight-loss power!
Claims accompanied by photograph of model Holly Madison, who
had lost two jean sizes.
NAD findings: NAD determined that the two clinical trials offered
in support of the advertiser's weight-loss claims were methodologically
sound in that both of the studies were randomized, double-blind,
placebo-controlled studies that utilized the same dosage and form of
the two active ingredients found in NV Hollywood. The study
participants were obese women.
However, there was no evidence in the record that the model in the
advertising--who had not been obese when she began taking NV
Hollywood--would achieve the same results in the same time frame.
Further, the advertisement did not make reference to the diet and
exercise changes that the study participants also underwent to achieve
their weight-loss goals. Consequently, NAD recommended that advertiser
discontinue its clams that NV Hollywood causes ``fast'' weight loss or
has ``incredible weight-loss power.''
Vital Pharmaceutical, Inc.
Meltdown Fat Assault Beverage & Fat Incinerator Capsules
NARB Panel #171 (7.18.11)
``Before'' and ``after'' pictures depicting weight and fat loss are
advertising claims that must be supported by competent and reliable
evidence demonstrating that they are results a consumer could typically
expect to achieve.
Claims at Issue:
Product packaging shows (a) ``before'' and ``after''
pictures of a woman who lost 21 pounds and reduced her body fat
from 23.1 percent to 14.8 percent and (b) ``before'' and
``after'' pictures of a man who lost 28 pounds and reduced his
body fat from 12.5 percent to 5.27 percent.
NAD/NARB Findings: The ``before'' and ``after'' comparisons
reasonably conveyed the message that the depicted weight/fat losses
were typical results that consumers could expect to achieve through use
of the product.
However, there was nothing in the record to show that the weight/
fat losses depicted were what could typically be achieved. Further,
there was no evidence to provide a reasonable basis to support a
message that use of Meltdown Fat Assault would result in any visible
weight or fat loss. NAD/NARB recommended that the advertiser
discontinue these ``before'' and ``after'' pictures.
Endorsements, Testimonials, Disclosures
Nutrisystem, Inc. (Pinterest)
``Real Consumers. Real Success.''
Case # 5479 (6.29.12)
NAD, following its review of ``Real Consumers. Real Success.''--a
Pinterest board maintained by Nutrisystem, Inc.--determined that the
weight-loss success stories ``pinned'' to such boards represent
consumer testimonials and require the complete disclosure of material
information.
Nutrisystem's ``Real Consumers'' pinboard featured photos of
``real'' Nutrisystem customers and highlighted their weight-loss
successes. The customer's name, total weight loss and a link to the
Nutrisystem website appeared below each photo.
Claims at issue in NAD's review included:
``Christine B. lost 46lbs on Nutrisystem.''
``Michael H. lost 125 lbs. on Nutrisystem.''
``Lisa M. lost 115 lbs. on Nutrisystem.''
``Christine H. lost 223 lbs. on Nutrisystem.''
Upon receipt of NAD's inquiry, the company asserted that necessary
disclosures were inadvertently omitted from Pinterest. The advertiser
stated that the testimonials at issue had appeared on Pinterest for
less than two months, and said the disclosures were added immediately
upon receipt of NAD's opening letter. NAD noted its appreciation that
Nutrisystem took immediate steps to provide such disclosures.
Liquid HCG Diet, LLC
Liquid HCG Diet
Case #246 (6.16.10)
Claims at Issue:
``Lose 30lbs. in a month, it's easy and quick!''
``Burns fat fast''
``Lasting results! Keep it off!''
Becky and husband lost 14lbs in 2 days!''; website claim
``Today is my second day on P2 and I lost 5.9lbs. and my
husband lost 8lbs.!''
ERSP Findings: ERSP recommended that the marketer discontinue its
weight loss claims in the context in which they are currently
communicated and that it modify its use of consumer testimonials in a
way that complies with Section 255 of the FTC's revised Guides
Concerning the Use of Endorsements and Testimonials in Advertising.
Urban Nutrition, LLC
WeKnowDiets.com (and affiliated websites)
Case #219 (8.11.09)
Claims at Issue:
``. . . there are now literally thousands of weight loss
products and diet programs available to choose from--that can
be a little confusing.''; ``Our goal is to give you a quick
snapshot of what options are available to you.''
``We have compiled the most comprehensive database of
information for people who are looking for a trimmer body and
healthier lifestyle.''; ``We have the largest weight loss
database in America.''
ERSP Findings: ERSP determined that the representations made on
WeKnowDiets and affiliated websites constituted an advertising message
(i.e., a paid commercial message that has the purpose of inducing a
sale or other commercial transaction or persuading the audience of the
value or usefulness of a company, product or service) and that certain
individuals writing favorable product reviews on the website may be
considered endorsers. Because Urban Nutrition owned not only the
websites at issue, but several products being reviewed on the websites,
ERSP concluded that this relationship constituted a ``material
connection'' that would not be reasonably expected by the audience and
one that would have a significant effect on the weight or credibility
given to the endorsement by that audience.
Iovate Health Sciences International
Hydroxycut Nutritional Supplement
Case #70 (1.17.06)
Claims at Issue:
``I've reviewed the research. You can lose weight fast,
increase energy, and control appetite with Hydroxycut. In my
opinion nothing works better or faster.'' (Dr. Lydon)
``With the science of Hydroxycut, you can lose up to 4.5
times the weight than with diet and exercise alone.''
``I lost 29 pounds with Hydroxycut--Hydroxycut can get you
in peak shape. With diet and exercise only, you can't really
get where you want as quickly. You really need Hydroxycut to
speed things up and tighten you up. I quickly lost 29 pounds
[in 8 weeks] and 5\1/2\ inches off my weight using
Hydroxycut.*'' (Dr. Marshall)
ERSP Findings: ERSP concluded that Dr. Lydon's claim communicated
an unqualified parity claim that was not supported by Iovate. Although
Dr. Marshall's testimonial was literally accurate, the fact that two
muscle building products supplements were used in addition to
Hydroxycut to achieve the results communicated in the advertisement was
material information with respect to consumers interpretation of the
claims that needed to be more prominently disclosed in the advertising.
Performance Claims
Hollywood Health & Beauty, LTD.
Trimbal-EXP200
Case #5112 (4.07.10)
Claims suggesting that you can lose weight without diet and
exercise were not supported by reliable scientific evidence.
Claims at Issue:
In a few minutes, this amazing capsule expands to become a
100 percent natural gastric balloon.
It attracts, surrounds and absorbs some of the fat,
carbohydrates and sugars that you've eaten and they are
naturally flushed out without having a chance to be absorbed by
your body and converted to excess fat.
``This weight loss plan is 100 percent safe.''
The effects were immediate.
I ate everything I liked and as much as I liked.
The first month, I lost exactly 33 pounds without any
effort.
The most incredible thing was that my stomach quickly became
flat and firm.
I could eat all the foods I like and as much as I wanted.
I lost a total of 48 pounds in 7 weeks.
When you use the Trimball-EXP200 capsule, you are going to
eat 2, 3 or even up to 4 times less, as you feel that your
stomach is FULL.
You will not experience any feelings of hunger.
You will then automatically lose weight.
These two properties have been confirmed by many clinical
studies conducted in the USA by leading dietary researcher,
Professor Walsh from the University of Minnesota.
NAD Findings: The advertiser's supplement contained glucomannan, an
ingredient that forms a ``bulk'' in the stomach by absorbing water and
possibly reducing hunger pangs.
The advertiser submitted one small study of 20 obese subjects who
took glucomannan fiber and were instructed not to change their eating
or exercising habits. Over an 8-week period, the treatment group lost
5.5 pounds.
NAD determined that it was necessary and appropriate for the
advertiser to discontinue all of its claims because the study did not
support the claims that glucomannan was as effective as gastric bypass
surgery, that consumers could eat whatever they liked and still lose
weight or that a consumer would typically lose large amounts of weight
as claimed.
Further, NAD concluded that this advertising included several
claims that have been identified by the FTC ``red flags'' as bogus
weight loss claims, including claims that the product can cause weight
loss of more than two pounds a week; works without dieting or exercise;
causes substantial weight loss no matter what or how much the consumer
eats; blocks the absorption of fat or calories to enable consumers to
lose substantial weight; and can safely enable consumers to lose more
than three pounds per week for more than four weeks.
Smart for Life Weight Management Centers
Smart for Life Cookies
Case #242 (6.1.10)
Claims at Issue:
``Eat Cookies. Lose Weight. It's that simple.''
``I lost 105 lbs'' [Lost 105 lbs in 12 months]
``I lost 115 lbs in 6 months'' [Lost 115 lbs in 6 months]
``Lost 25 lbs in 5 weeks''
ERSP Findings: ERSP determined that it would not be unreasonable
for consumers to take away the message that besides eating the Diet
Cookies, they need not take any further action in order to lose weight.
ERSP found that eating a low calorie dinner was a material condition to
obtaining the claimed weight loss and must be prominently, clearly and
conspicuously disclosed. ERSP also recommended that the marketer
properly qualify the limitations of the applicability of consumer
testimonials in future advertising.
Emson, Inc.
Ab Rocket Twister System
Case #268 (6.13.11)
Claim at Issue:
``Lose up to 2 inches off your waist in just 12 days
guaranteed or your money back,''; ``. . .in as little as 5
minutes a day with the Ab Rocket Twister, you're on your way to
tighter, sexier abs guaranteed.''; ``I've lost over 50 pounds
and 21 inches.''
ERSP Findings: ERSP determined that when certain versions of the Ab
Rocket Twister advertising are viewed in their entirety, it would not
be unreasonable for consumers to interpret the advertising as
communicating that the stated results were based on use of the Ab
Rocket Twister alone.
ERSP recommended that the marketer should modify such advertising
to clearly communicate that the weight and inches lost depicted in the
advertising were based upon adherence to all components of the Ab
Rocket Twister System, not just use of the machine itself.
MZ Direct Response, LL&C
Velform Sauna Belt
Case #75 (2.21.06)
Claims at Issue:
Immediately see real results with no effort.''
``Lose an in inch in fifty minutes.''
``A safe sure way to lose weight.''
``We are able to target specific areas such as the abdomen,
hips, and thighs.''
ERSP Findings: ERSP concluded that any performance claims
characterized in an ``instant'' or ``immediate'' context that are
inconsistent with results obtained after 50 minutes of product usage
should be either adequately qualified or discontinued. ERSP also
recommended that the marketer refrain from suggesting that consumers
will lose meaningful (i.e., ``real results'') weight with ``no
effort.'' ERSP also determined that the marketer's claims to ``Lose an
inch in 50 minutes'' as well as the on camera demonstrations of people
losing more weight and inches in 50 minutes than reported by in the
study should be discontinued or modified. Lastly, it was recommended
that the marketer should also modify its computer-generated ``slim-
down'' depiction to accurately reflect the evidence and not overstate
the amount and areas of weight/inches loss that can be realized by use
of the Velform Sauna Belt.
``Dr. Recommended'' Claims
iSatori Technologies. LLC
Lean System 7
Case #4324 (4.22.05)
``Doctor Recommended'' claims can carry great weight with consumers
and, consequently, require strong evidence.
Claim at Issue:
Doctor Recommended
NAD Findings: In addition to making unsupported ``clinically
proven'' claims such as Lean System 7 will burn up to 930 extra
calories a day, the advertiser also claimed that its product was
``doctor recommended.'' In support of this claim, the advertiser
submitted a testimonial from one doctor. NAD has recognized that
``Doctor Recommended'' claims can carry great weight with consumers
and, consequently, require strong evidence. It is well-established that
``doctor recommended'' claims must be supported by well-conducted
physician surveys based on doctors' actual experience in their daily
practice. Here, the advertiser did not produce any evidence regarding
its doctor recommended claim other than an unsupported testimonial from
one doctor.
Senator McCaskill. Thank you.
Mr. Mister.
STATEMENT STEVEN M. MISTER, PRESIDENT
AND CHIEF EXECUTIVE OFFICER, COUNCIL FOR RESPONSIBLE NUTRITION
Mr. Mister. Good morning. My name is Steve Mister, and I'm
the President and CEO of the Council for Responsible Nutrition.
CRN is the leading trade association representing the
manufacturers and marketers of dietary supplements, functional
foods, and their nutritional ingredients. We empathize with the
many Americans who are vulnerable to false promises for losing
weight fast, with everything from rubber pants and bracelets to
sprays, creams and exercise gadgets, and, yes, dietary
supplements. Collectively, Americans spend over $40 billion a
year trying to lose weight. The Nutrition Business Journal
reports that dietary supplements and meal replacements
formulated for weight loss are a $5.3-billion-a-year industry,
a small fraction of the total, but a significant sum
nevertheless.
But, before the Committee throws the baby out with the bath
water, we want to be clear that there are a number of dietary
ingredients used in weight-loss supplements, when combined with
moderate exercise programs and sensible eating, that have been
shown in well-conducted clinical trials to be safe and
beneficial for weight management. The Dietary Supplement Health
and Education Act requires that all supplements must have
substantiation for their claims, and that includes weight-loss
claims.
The FDA's regulations for labeling establish a detailed
approach for what constitutes adequate substantiation for these
``structure/function'' claims, which requires the claims be
supported by well-conducted human trials with statistically
significant benefits.
Along with the consumers who are duped by these false and
misleading claims, the responsible supplement industry who
complies with these standards also stands to lose when
unscrupulous marketers take advantage with misleading and
unsupported ads. I'm here today to reinforce the commitment of
CRN's members to help address these scams and frauds in the
weight-loss marketplace.
But, unfortunately, the reality of the current weight-loss
market is that it is a tale of two industries: legitimate
manufacturers who responsibly produce products that work and
make claims for their products that are within the bounds of
the law, and then, on the other hand, the unscrupulous players
who prey on consumer desperation and their insatiable desire to
be thin, and will say almost anything to make a quick profit.
The Federal Trade Commission has the authority to enforce
the prohibition on false, misleading, and deceptive claims made
in the advertising of weight-loss products. CRN has publicly
supported, and will continue to applaud, the numerous
enforcement actions brought by the FTC in recent years, and the
more than $438 million in restitution and civil penalties
assessed by the Commission against deceptive advertising with
respect to weight-loss products since 2004.
Enforcement sweeps like the FTC's ``Operation Waistline''
and, more recently, ``Failed Resolution,'' and its media
awareness campaigns like ``Gut Check,'' help to remove
misleading claims, but they also alert the public while sending
a message of deterrence through the industry. And CRN applauds
them for that. However, the reality is that, in this Internet
Age, along with a proliferation of cable television, talk
radio, and various online media, and the increasing pressures
for ad revenue among shrinking print media, both the FTC and
the FDA have insufficient resources to combat the number of
deceptive claims in the market. Some media outlets, eager to
accept advertising dollars, will turn a blind eye to
advertising copy that clearly violates the law and deceives
consumers.
So, in 2006, CRN began an industrywide self-regulatory
program with the National Advertising Division (NAD), as you've
heard, to help self-police the advertising claims of dietary
supplement marketers. CRN has committed over $2 million to
underwrite this program, which has already investigated almost
200 challenges of the claims made by supplement marketers, many
of which involve weight-loss claims. I am proud of the track
record of this program for providing fair, thoughtful, and
transparent decisions, for achieving a high rate of industry
participation, and for the precedents that it sets with these
decisions to deter others in the industry from making similarly
fraudulent claims.
CRN's members are committed to manufacturing and marketing
high-quality, safe, beneficial products and to ensure that our
consumers receive truthful, accurate, nonmisleading information
on supplements and nutritional products.
We believe the challenge for legitimate weight-loss
products is essentially this: American consumers
unrealistically yearn for a magic bullet, and unscrupulous
marketers will take advantage of these desires with hollow
promises. Like a successful weight-loss program, though, the
solutions are not easy. Significant first steps should include:
increasing resources and priorities for enforcement of the
existing legal requirements by both the FTC and the FDA;
expanding and strengthening self-policing programs among
manufacturers and marketers in the industry, like our
initiative with the NAD; calling on media outlets and online
retailers to conduct their own advertising clearance before
accepting ads with claims that are illegal and simply too good
to be true; and finally, educating consumers to be realistic
about their weight-loss strategies and their expectations, to
make them less vulnerable to outrageous and unsupported claims.
Thank you for the opportunity to share our views with the
Committee.
[The prepared statement of Mr. Mister follows:]
Prepared Statement of Steven M. Mister, President and Chief Executive
Officer, Council for Responsible Nutrition
Good morning. My name is Steve Mister, and I am the President and
CEO of the Council for Responsible Nutrition.
The Council for Responsible Nutrition (CRN) appreciates this
opportunity to provide testimony to the Senate Subcommittee on Consumer
Protection, Product Safety and Insurance. We want to reassure you and
your colleagues, your constituents and our customers that CRN's members
are committed to manufacturing and marketing high quality, safe and
beneficial products that have a valuable and appropriate role in weight
management regimens. CRN is also committed to ensuring that consumers
receive truthful, accurate and non-misleading information about dietary
supplements on the label and in advertising.
CRN, founded in 1973 and based in Washington, DC, is the leading
trade association representing dietary supplement manufacturers and
ingredient suppliers. CRN companies produce a large portion of the
dietary supplements and nutritional products marketed in the United
States and globally. Our member companies manufacture popular national
brands as well as the store brands marketed by major supermarkets, drug
stores and discount chains. These products also include those marketed
through natural food stores and mainstream direct selling companies.
CRN represents nearly 150 companies that manufacture or market dietary
supplements, functional foods and their nutritional ingredients, or
supply products and services to those suppliers and manufacturers. Our
member companies comply with a host of Federal and state regulations
governing dietary supplements in the areas of manufacturing, marketing,
quality control and safety. Our supplier and manufacturer member
companies also agree to adhere to additional voluntary guidelines as
well as to CRN's Code of Ethics.
Weight management is a serious issue. According to the 2013 Gallup-
Healthways Well-being Index, the number of adults in the U.S. who need
to be more conscious of their weight continues to climb: 27 percent are
classified as obese, and another 35 percent are considered
overweight.\1\ At the same time, a Gallup poll from last November
indicates that 51 percent of Americans say they want to lose weight,
but just under half of them--only 25 percent--say they are seriously
trying to lose weight.\2\
---------------------------------------------------------------------------
\1\ U.S. Obesity Rate Climbing in 2013, Gallup, Nov. 1, 2013 http:/
/www.gallup.com/poll/165
671/obesity-rate-climbing-2013.aspx.
\2\ Americans' Desire to Shed Pounds Outweighs Effort, Gallup, Nov.
29, 2013, http://www
.gallup.com/poll/166082/americans-desire-shed-pounds-outweighs-
effort.aspx.
---------------------------------------------------------------------------
So it's not surprising that these statistics translate into many
Americans who are eager to drop a few pounds. We empathize with the
many Americans who are vulnerable to false promises for losing weight
fast with everything from rubber pants and bracelets, to sprays,
creams, exercise gadgets and dietary supplements. Collectively,
Americans spend about $40 billion a year trying to lose weight.\3\ The
Nutrition Business Journal reports that dietary supplements and meal
replacements that are formulated for weight loss are a $5.3 billion
industry \4\ in the U.S., only a fraction of the total, but still a
significant sum.
---------------------------------------------------------------------------
\3\ Weight Management Trends in the U.S., 2nd ed. (March 15, 2013)
http://www.pack
agedfacts.com/Weight-Management-Trends-7429799/.
\4\ Unpublished data from Nutrition Business Journal, provided June
12, 2014.
---------------------------------------------------------------------------
Now let's be clear: a number of dietary ingredients in weight loss
supplements, when combined with moderate exercise programs and sensible
eating, have been shown in well-regarded clinical trials to be safe and
effective for weight management. The truth is that many dietary
supplements, meal replacement programs and specially formulated foods
can be beneficial as part of a weight management program. They can
increase weight loss over diet and exercise alone, and can help people
lead more active lifestyles that help to keep the pounds off.
At the same time, however, other products make outrageous claims
that promise the weight will fall off without changing what you eat,
and without exercise. Some products tout the latest ``miracle''
ingredients, falsely claim to be ``clinically proven'' and may not even
contain the levels of ingredients they promote. Some scammers trap
consumers in fraudulent credit card programs or offer money-back
guarantees but become impossible to track down when the product doesn't
work. And that is the reality of the current weight loss market: it is
a tale of two industries--with legitimate manufacturers who responsibly
produce products that work and make claims for their products within
the bounds of the law, and unscrupulous players who prey on desperation
and the insatiable desire to be thin, and will say almost anything to
make a quick profit. Along with consumers who are duped by false and
misleading claims, the responsible supplement industry, who complies
with these standards, also stands to lose when unscrupulous marketers
take advantage with misleading and unsupported ads.
The Dietary Supplement Health and Education Act (``DSHEA'')
requires that all supplements must have substantiation for the claims
they make, and that includes weight loss claims. The Food and Drug
Administration's (FDA) regulations establish detailed requirements for
what constitutes adequate substantiation for these ``structure/function
claims,'' which are modeled after Federal Trade Commission (FTC)
standards for truthful and non-misleading advertising claims. These
requirements can be found in the FDA's ``Guidance for Industry:
Substantiation for Dietary Supplement Claims Made Under Section
403(r)(6) of the Federal Food, Drug and Cosmetic Act'' \5\ and its
``Guidance for Industry: Structure/Function Claims, Small Entity
Compliance Guide.'' \6\ The generally accepted standards for the
substantiation of weight management claims include requirements that
there must be research on humans showing demonstrable weight loss; that
the studies use the same ingredients at the same levels as contained in
the products; and that the research shows a statistically significant
benefit over placebo in double-blinded, placebo-controlled studies.
---------------------------------------------------------------------------
\5\ http://www.fda.gov/food/guidanceregulation/
guidancedocumentsregulatoryinformation/ucm073200.htm.
\6\ http://www.fda.gov/food/guidanceregulation/
guidancedocumentsregulatoryinformation/ucm103340.htm.
---------------------------------------------------------------------------
CRN is also greatly concerned about the ingredients found in some
weight loss products that masquerade as dietary supplements for weight
loss. Despite their labeling claims of being ``all natural'' and
``completely safe,'' some of these products contain prescription drug
ingredients and are illegally and erroneously marketed as dietary
supplements. FDA has taken enforcement actions with respect to no less
than 250 products in the past six years. These products have contained
ingredients like sibutramine, a powerful weight loss pharmaceutical
ingredient that was removed from the market by FDA for safety reasons.
These weight loss products are potentially dangerous to consumers
because they may cause side effects or adverse interactions with other
drugs, and because the product labeling fails to disclose the presence
of these powerful substances, consumers are unaware of their presence.
Although FDA has brought civil and criminal actions against some of the
marketers of these illegal products, the agency must do more to protect
consumers, including working more closely with the U.S. Justice
Department to bring criminal charges against those who introduce these
dangerous products into the market.
Just as DSHEA calls on FDA to oversee claims made in dietary
supplement labeling, the Federal Trade Commission Act authorizes the
FTC to enforce the prohibition on false, misleading and deceptive
claims made in the advertising of weight loss products. The FTC's
``Dietary Supplements: An Advertising Guide for Industry'' \7\
describes in detail how the general principles of the statute apply
specifically to the health-related claims made for dietary supplements,
namely that advertising claims must be truthful, not misleading and
substantiated with credible scientific evidence.
---------------------------------------------------------------------------
\7\ http://business.ftc.gov/documents/bus09-dietary-supplements-
advertising-guide-industry.
---------------------------------------------------------------------------
CRN has publicly supported--and will continue to applaud the
numerous enforcement actions brought by the FTC in recent years and the
more than $438 million in fines and penalties assessed by the
Commission since 2004 against deceptive weight loss advertising.
Enforcement sweeps like the FTC's ``Operation Waistline'' \8\ and its
media awareness programs, like ``Gut Check: A Reference Guide for Media
on Spotting False Weight Loss Claims,'' \9\ help to remove misleading
advertising, and also alert consumers and send a message of deterrence
throughout the industry.
---------------------------------------------------------------------------
\8\ http://www.ftc.gov/news-events/press-releases/1997/03/ftc-
announces-operation-waistline-law-enforcement-and-consumer.
\9\ http://www.business.ftc.gov/documents/0492-gut-check-reference-
guide-media-spotting-false-weight-loss-claims.
---------------------------------------------------------------------------
For example, FTC's recently released ``Gut Check'' Guide offers
tips for media to help identify weight loss claims that are likely to
be too good to be true. It cautions media to review advertising before
accepting it because certain claims from advertisers may be a tip-off
to deception if the product claims to:
1. cause weight loss of two pounds or more a week for a month or
more without dieting or exercise;
2. cause substantial weight loss no matter what or how much the
consumer eats;
3. cause permanent weight loss even after the consumer stops using
the product;
4. block the absorption of fat or calories to enable consumers to
lose substantial weight;
5. safely enables consumers to lose more than three pounds per week
for more than four weeks;
6. cause substantial weight loss for all users; or
7. cause substantial weight loss by wearing a product on the body or
rubbing it into the skin.
FTC also provides similar tips in its consumer information article
``Weighing the Claims in Diet Ads,'' which warns consumers about ads
promising quick and easy weight loss without diet or exercise and what
claims are most likely to be untrue.
However, the reality is that in this Internet age, along with the
proliferation of cable television, talk radio and various online media,
and increasing pressures for shrinking ad revenue among print media,
both the FTC and FDA have insufficient resources to combat the number
of deceptive claims in the market. Some media outlets, eager to accept
advertising dollars, turn a blind eye to advertising copy that clearly
violates the law. Like the carnival game ``whack-a-mole,'' it seems
that every time the FTC targets one company for deceptive advertising,
two more pop up. Responsible firms, like CRN's members, suffer along
with consumers as legal, reasonable and defensible advertising for
weight management gets dwarfed by outlandish claims that violate the
law and deceive consumers.
In 2006, CRN began an industry program with the Council of Better
Business Bureaus to help self-police the advertising claims of dietary
supplement marketers. Over the past seven years, the National
Advertising Division (NAD) has conducted almost 200 challenges of the
claims made by supplement marketers, many of which involve weight loss.
CRN has committed over $2 million to underwrite the program at the NAD
devoted to the investigation of supplement claims. CRN is proud of the
track record this program has for providing fair, thoughtful and
transparent decisions, for achieving a high rate of participation with
those decisions, and for the precedential effect these decisions have
to deter others in the industry from making similarly fraudulent
claims.
Almost 20 percent of all the cases the CRN-funded program with the
NAD has considered involve claims for weight loss. Commonly recurring
problems with these claims include promoting that the ingredients are
``clinically proven'' or ``doctor recommended'' when they are neither;
claiming clinical research for a product when the study did not examine
the same ingredients or ingredients at the same levels as they appear
in the product, and test results that are wildly overstated in the
advertising. While participation by the advertiser is voluntary, in
cases where the advertiser refuses to participate, or where the NAD
becomes aware that the advertiser fails to implement the changes
recommended in the decision, those cases are referred to the FTC for
review and possible legal action.
CRN has also developed a Roadmap for Retailers,\10\ a six-page
brochure to assist those who interact with our consumers, which reminds
them that unsupported personal testimonials, promises of cures and
treatments, and exaggerated claims that are not supported by the
research are both illegal and detrimental to keeping the trust of their
customers. CRN also provides ``A Dozen Tips for Consumers,'' \11\ to
help educate the public how to make savvy purchasing decisions.
Separately, we have developed guidelines for the industry for the
labeling of caffeine content in dietary supplements and functional
foods, a common concern especially among weight loss products,\12\ and
we maintain a Code of Ethics for CRN members.\13\
---------------------------------------------------------------------------
\10\ http://www.crnusa.org/roadmap/.
\11\ http://www.crnusa.org/CRNfactsheetconsumertips.html
\12\ http://www.crnusa.org/caffeine/guidelines.html.
\13\ http://crnusa.org/who_ssr_code.html.
---------------------------------------------------------------------------
CRN's members are committed to manufacturing and marketing high
quality, safe and beneficial products. We are likewise committed to
ensuring that consumers receive truthful, accurate and non-misleading
information on dietary supplements. We believe that the challenge with
weight loss products--whether they are dietary supplements, meal
programs, clothing or gadgets--is that American consumers' unrealistic
yearnings for a magic bullet align with the temptation for unscrupulous
marketers to take advantage of these desires with hollow promises.
Like a successful diet, the solutions are not simple or easy;
however, we believe there are four significant steps that can be taken
to help address these issues:
1. Expanding and strengthening voluntary programs among
manufacturers and marketers of weight loss products, like our
initiative with the NAD. These self-regulatory programs help
consumers identify products that are likely to work and avoid
those that aren't. Third-party certification programs that
audit manufacturing practices and test ingredients against
label claims can also help responsible marketers to distinguish
their products from ones that don't measure up.
2. Increasing resources and priorities for the enforcement of
existing legal requirements by both the FTC and FDA. The legal
standards for substantiation of claims made in product labeling
and advertising, including Internet websites, are sufficient to
protect consumers while balancing the rights of marketers to
make truthful statements about their products and to present
emerging science. However, more needs to be done to target bad
actors and remove untruthful claims. We urge Congress to
provide adequate resources to both FDA and FTC with direction
to the agencies to make prosecution of untruthful advertising
and labeling a priority.
3. Calling on media outlets and online retailers to conduct their
own advertising review before accepting advertising with claims
that are illegal and simply ``too good to be true.'' Claims of
dramatic weight loss that don't require any change in diet or
exercise, that promise permanent fat reduction or that offer
overnight results are inherently suspect. Media outlets,
including newspapers, magazines, radio and television stations,
Internet websites and social media sites, all have a role in
helping to prevent consumer fraud. Incentives for these venues
to screen advertising and reject ads that are blatantly
deceptive must be strengthened.
4. Educating consumers to be realistic about weight loss strategies
and expectations to make them less vulnerable to outrageous and
unsupported claims. When consumers better understand that
meaningful weight loss occurs slowly and steadily, and that so-
called ``miracle'' products are non-existent, unscrupulous
marketers will find less demand for their potions and gimmicks.
CRN shares this Committee's concerns about bad actors in the
industry and we denounce false, misleading or deceptive marketing
practices--activities engaged in by a few who have damaged the
reputation of the responsible industry. We look forward to cooperating
with the other witnesses at today's hearing to develop solutions that
strengthen the trust of consumers in dietary supplements.
Thank you for the opportunity to share our views with the
Committee.
Senator McCaskill. Thank you, Mr. Mister.
Mr. Haralson.
STATEMENT OF ROBERT H. HARALSON IV, EXECUTIVE DIRECTOR,
TrustInAds.org
Mr. Haralson. Chairman McCaskill, Ranking Member Heller,
and distinguished members of the Subcommittee, thank you for
the opportunity to testify today about TrustInAd.org's member-
companies' efforts to combat fraudulent online advertising for
weight-loss products. My name is Rob Haralson, and I am the
organization's Executive Director.
In my testimony, I will highlight how our member companies
are incentivized to keep bad ads out of our systems. I will
also note how they are investing significant resources in this
area and have already removed millions of bad ads from their
services.
TrustInAds.org includes Internet industry leaders AOL,
Facebook, Google, Twitter, and Yahoo!. We founded this
organization to work together toward a common goal: protect
people from malicious online ads and deceptive practices. With
this effort, we are bringing awareness to consumers about
online ad-related scams, working collaboratively to identify
both trends in deceptive ads and best practices, and sharing
our knowledge with policymakers and consumer advocates around
the country.
TrustInAds.org offers guidance to consumers on how to avoid
scams through the regular release of what we call our ``Bad Ads
Trend Alerts.'' These are consumer-friendly and easily
digestible reports that examine a specific trend or trends we
are seeing, and provides specific examples of bad ads and
websites that the companies have removed from their platforms.
We highlight the steps that the companies have taken to combat
the problem, and give the consumers useful tips on how to make
good choices online. Our website also includes a dedicated page
where people can go to learn how to easily report a suspicious
ad on any of our member companies' websites.
Our first report, released in May, detailed ads for phony
tech-support services. And yesterday, we released our newest
report on fraudulent ads related to weight-loss products and
dietary supplements. Our member companies have allocated
significant resources to keep bad ads off their platforms.
Without question, ensuring a positive user experience for all
users is essential to maintaining a vibrant Internet ecosystem.
Today, the sale of numerous weight-loss products and
dietary supplements through advertising is seen across all
mediums: print, broadcast, radio, and the Web. And, while most
entities selling these kinds of products provide accurate and
truthful information regarding the overall effectiveness, some
bad actors, in an attempt to entice consumers, market products
with outrageous claims and promises of dramatic weight loss.
For the bad actors attempting to use online advertising, these
kinds of claims violate both our member companies' advertising
policies and existing laws aimed at protecting consumers. We
applaud Federal agencies for recognizing the weight-loss scam
problem and their active efforts to educate consumers about
misleading claims.
In addition to its active law enforcement against scammers,
the FTC's Consumer Information Website has an entire section
devoted to weight loss and fitness that outlines many of the
advertisements that users could encounter on the Internet and
other places, and debunks their claims. Stopping these ads is
critical for online advertising companies, as well.
Collectively, our member companies have hundreds of individuals
on their respective teams, spanning policy, engineering,
network security, and legal, that are dedicated to identifying
and preventing this illegal activity.
Fortunately, most of these types of ads never reach the
user and are immediately rejected through automated filtering
processes as soon as they are submitted. For those that are
detected after they are published, they are immediately
removed, and the advertiser account is reviewed. Temporary or
permanent suspension of the advertiser account is then
considered, depending on the severity of the ad's policy
violations.
User feedback also plays an important role in detecting bad
ads, and our companies carefully review user complaints related
to ads, and quickly take action when warranted.
Over the course of the past 18 months, AOL, Google,
Facebook, Twitter, and Yahoo! have collectively removed or
rejected over 2 and a half million ads related to weight loss
and dietary supplements due to numerous ads policy violations.
While all stakeholders are working hard to stop these ads,
weight-loss scammers, some who are incredibly sophisticated,
work maliciously to find ways to avoid detection by agencies,
falling within their guidelines, and circumvent our companies'
automated filters. Working together, AOL, Facebook, Google, and
Twitter, and Yahoo! are fully committed to improving their
systems to help protect users across the Web. We believe that
if we all work together to identify threats and stamp them out,
we can make the Web a safer place for everyone.
Again, thank you for this opportunity to testify.
[The prepared statement of Mr. Haralson follows:]
Prepared Statement of Robert H. Haralson IV, Executive Director,
TrustInAds.org
Chairwoman McCaskill, Ranking Member Heller and distinguished
Members of the Subcommittee:
Thank you for the opportunity to testify today on TrustInAds.org's
member companies' efforts to combat fraudulent online advertising for
weight loss products. My name is Rob Haralson and I am the
organization's Executive Director.
TrustInAds.org includes Internet industry leaders AOL, Facebook,
Google, Twitter and Yahoo, and we founded this organization to work
together toward a common goal: Protect people from malicious online
advertisements and deceptive practices. With this effort, we are:
bringing awareness to consumers about online ad-related scams and
deceptive activities; collaborating to identify trends in deceptive ads
and sharing best practices; and sharing our knowledge with policymakers
and consumer advocates around the country.
TrustInAds.org offers guidance to consumers on how to avoid scams
through the regular release of what we call our Bad Ads Trend Alerts.
These are consumer-friendly and easily digestible reports that examine
a specific trend or trends we are seeing, and provide specific examples
of bad ads and websites the companies have removed from their
platforms. We highlight steps the companies have taken to combat the
problem and give consumers useful tips on how to make good consumer
choices online.
In addition, our website includes a dedicated page where people can
go to learn how to easily report a suspicious ad seen on any of our
member companies' advertising platforms.
Our first report, released in May, detailed ads for phony tech
support services, and yesterday, we released our newest report on
fraudulent ads related to weight loss products and dietary supplements.
I have included this report as an attachment to my written
testimony for the Subcommittee.
Our member companies are committed to protecting people from
malicious online advertisements and deceptive practices and have
allocated significant resources to keep these kinds of bad ads off of
their platforms. Without question, ensuring a positive experience for
all users is essential to maintaining a vibrant and successful Internet
ecosystem.
Today, the sale of numerous weight loss products and dietary
supplements through advertising is seen across all mediums--print,
broadcast, radio and the web. And while most entities selling these
kinds of products provide accurate and truthful information regarding
their overall effectiveness, some bad actors--in an attempt to entice
consumers--market products with outrageous, unrealistic claims and
promises of dramatic weight loss.
For the bad actors attempting to use online advertising, these
kinds of claims violate both TrustInAds.org's member companies'
advertising policies and existing laws aimed at protecting consumers.
We applaud Federal agencies for recognizing the weight loss scam
problem and their active efforts to educate consumers about misleading
claims. In addition to its active law enforcement against scammers, the
FTC's Consumer Information website has an entire section devoted to
weight loss and fitness that outlines many of the advertisements that
users could encounter on the Internet and debunks their claims. In
addition, the Food and Drug Administration's (FDA) website brings
regulatory actions against scammers and also provides consumers with
helpful information about weight loss fraud.
Stopping these ads is critical for online advertising companies as
well. Collectively, TrustInAds.org member companies have hundreds of
individuals on their respective teams spanning policy, engineering,
network security and legal dedicated to identifying and preventing this
illegal activity.
Fortunately, most of these types of ads never reach the user and
are immediately rejected through automated filtering processes as soon
as they are submitted. For those that are detected after they are
published, they are immediately removed and the advertiser account is
reviewed. Temporary or permanent suspension of the advertiser account
is then considered depending on the severity of the ads policy
violation(s).
User feedback also plays an important role in detecting bad ads,
and our companies carefully review user complaints related to ads and
quickly take action when warranted.
Over the course of the past 18 months, AOL, Google, Facebook,
Twitter and Yahoo have collectively removed or rejected over 2.5
million ads related to weight loss and dietary supplements due to
numerous ads policy violations.
While all stakeholders are working hard to stop these ads, weight
loss scammers, some who are incredibly sophisticated, work maliciously
to find ways to avoid detection by agencies, falling within their
guidelines, and circumvent our companies' automated filters. Given
this, each company has allocated substantial technical, financial and
human resources to stop bad advertising practices like these and
protect users on their platforms and across the web.
The steps our member companies have taken aim to complement the
continued efforts by agencies such as the FTC to enforce existing law
to ensure that consumers are presented with truthful and accurate
information in online ads.
Working together, AOL, Facebook, Google, Twitter and Yahoo are
fully committed to improving their systems to help protect users across
the web, contributing research, and facilitating industry initiatives
to combat bad online ads. We believe that if we all work together to
identify threats and stamp them out, we can make the web a safer place
for everyone.
Again, thank you for this opportunity to testify.
______
Senator McCaskill. Thank you, Mr. Haralson.
Dr. Fabricant.
STATEMENT OF DANIEL FABRICANT, Ph.D., CHIEF EXECUTIVE OFFICER
AND EXECUTIVE DIRECTOR, NATURAL PRODUCTS ASSOCIATION
Dr. Fabricant. Thank you. Thank you, Madam Chair, members
of the Committee. Thank you for this opportunity to discuss and
participate in this panel discussion.
I am Dr. Daniel Fabricant, CEO and Executive Director of
the National Products Association, the oldest and largest trade
association in the natural products industry. We represent
thousands of retailers, manufacturers, suppliers, and
distributors of health foods, dietary supplements, natural
personal care, and the millions of Americans who use
supplements each year. While some of our members are household
names, most are small-business owners, many women-owned, who
got into this business because they want to help people live
truly healthier lives.
Our first rule to customers is: Always consult with your
healthcare provider and that dietary supplements are part of a
broader, healthier lifestyle that includes diet and exercise.
Madam Chair, our members fully support efforts to combat
fraud and to rules and regulations the Federal Government has
to protect consumers. Deceptive advertising is illegal and
should not be tolerated, period.
Like you, we are especially concerned about fraud on the
Internet. Our association was founded by brick-and-mortar
independent retailers, not Internet-only or fly-by-night firms.
Our members know that public trust with their customer is one
of the main reasons that natural products are in such high
demand.
No one has more of an interest in weeding out fraud than
our members, because bad actors only tarnish their good
integrity. To support FTC, NPA has its own industry policing
program, where members report questionable ad claims so bad
actors can be disciplined. Our members are empowered to follow
the Homeland Security rule as it relates to questionable ad
claims: If you see something, say something.
Under our Truth in Advertising Program, questionable ad
claims are reviewed by a committee of industry attorneys to
determine if they are over the line, and then we take two
actions. The first is to mail a cease and desist letter to a
company. I've attached an example of that in my testimony. The
second is to refer cases to FTC and FDA, where potentially
fraudulent advertising or disease claims exist. Since this
program began, in 2010, it has resulted in 446 letters to such
firms. Of those, 320 acknowledged the issues and made
corrections. The remainder were submitted to FDA and FTC over
that period of time. So, we do have a strong partnership with
the regulatory agencies, but we do depend on Federal
authorities to provide enforcement action and make all of this
a reality.
And here, while we see positive action, we also see some
areas for consideration and some areas of concern. We've heard
about existing enforcement authorities, but some are finally
very used--being used for the first time. My former job was as
director of Dietary Supplement Programs at FDA, where we used
existing tools, like mandatory recall, administrative
detention, injunctions and seizures, for firms--recidivist
firms failing to meet minimal quality standards in making
disease claims. FTC has, likewise, taken substantial actions
against firms that have deceived consumers with regards to
weight loss.
NPA fully supports those efforts, as they demonstrate FTC's
ample and adequate current authorities, but we're still
wrestling with the Internet advertising today and the fly-by-
night issues, so where are we there with those? We believe FTC
should consider using existing authorities more on the front
end, to be more agile and disciplinary to companies without
regard to their revenues. More aggressive enforcement of the
so-called fly-by-nights needs to be just as important to the
FTC as large-scale enforcement against larger revenue firms.
FTC, in conjunction with Department of Justice and other
agencies, currently use misdemeanor prosecutions, set civil
money penalties for those already under consent orders or those
who have violated other laws. However, we don't see as much use
of these tools. Also, it appears there's a predilection by
regulators to pursue more sizable and protracted cases, perhaps
at the expense of more regulatory muscle on the front end
against companies of any size or revenue stream. If FTC doesn't
act and take down fly-by-nights on the front end early in the
game, more will be tempted to get into the game.
Last, when we support the FTC's mission, we're concerned
with a recent development related to FTC consent orders.
Obviously, consent orders are case-specific and not meant to be
applied industrywide. However, we are seeing some evidence of
this, which could have negative outcomes for consumers, from
both a cost perspective but also potentially reducing the
quality and quantity of information about the products
available to them.
When application of extrastatutory interpretations moves
from consent orders into rules of general applicability, it's
not beneficial to anyone, and particularly to consumers. One
example would be FTC's new requirement--apparent new
requirement that additional studies and research are necessary
prior to advertising, like a requirement to conduct two double-
blind randomized control studies to support lawful structure
function statements, which is not a current legal or statutory
requirement. This is not only outside of the statute, but leads
to unnecessary and inefficient use of resources, which can
chill innovation and disincentivizes the very research needed
to substantiate claims.
This is also happening without any cost benefit on behalf
of consumers or the economy. If such standards are applied
generally, a firm investing in the currently required study
that is well controlled and meets both the competent and
reliable scientific standard would be prohibited from sharing
that information from consumers. This actually results in less
information being available to consumers, not more, and
effectively changes the rules in the middle of the game. This
is a critical concern to our members, as it appears to abridge
protected speech, which could constitute a violation of APA or
present possible First Amendment issues.
We'd like to work with FTC and others to address these
concerns and to help improve the enforcement regime, and
ultimately protect consumers while giving them the widest
access to the information that they need.
Madam Chair, thank you for holding this hearing.
[The prepared statement of Dr. Fabricant follows:]
Prepared Statement of Daniel Fabricant, Ph.D., Chief Executive Officer
and Executive Director, Natural Products Association
Madam Chairperson and Members of the Committee;
Thank you for the opportunity to participate in this very important
panel discussion. I am Dr. Daniel Fabricant, the CEO and Executive
Director of the Natural Products Association (NPA). NPA is a 78-year
old association and is the oldest and largest trade association in the
natural products industry. We represent the interests of more than
10,000 locations, including retailers, manufacturers, suppliers and
distributors of health foods, dietary supplements, natural personal
care and the millions of Americans who use supplements each year.
While some of our members are household names, the majority of our
members are small business owners--many women-owned--who got into this
business because they want to help people live healthier lives through
the use of natural products. And Americans are looking more and more
for natural products each and every day, because they see the
difference natural products can make in their daily lives. In 2012,
Americans spent $2.8 trillion on health care, including $267 billion on
health-related products and services, like dietary supplements, weight-
loss programs and fitness club memberships. Our first rule to all
customers is to always consult with your health care provider, and that
dietary supplements are part of a broader healthy lifestyle that
includes diet and exercise.
Madam Chair, let me say at the outset that our members fully
support efforts to combat fraud and to enforce the range of rules and
regulations that the Federal Government has to protect consumers and to
give them the information they need. Deceptive advertising is illegal
and should not be tolerated, period.
Advertising for weight loss covers a broad jurisdiction that spans
a growing range of the economy, from exercise regimens, to meal
systems, to cosmetic/spa type services and also includes a sector of
the natural products industry in the form of dietary supplements.
At the NPA, we share the concerns expressed by others at this
hearing about the use of deceptive advertising, especially on the
internet. Our association was founded by brick-and-mortar independent
retailers, not Internet only, fly-by night outfits. Our members know
that the public trust with their customers is one of the main reasons
that natural products are so prevalent in the marketplace these days.
In short, no one has more of an interest in weeding out fraud than
our members, because bad actors only tarnish their good integrity.
That's why we strongly support the Federal Trade Commission's (FTC)
efforts.
To support FTC further, NPA has its own industry policing program
where members identify and report questionable ad claims so that bad
actors can be disciplined by Federal authorities, including the FTC. In
short, our members are empowered to follow the homeland security rule
as it relates to questionable ad claims: if you see something, say
something.
NPA's educational foundation, The Natural Products Foundation (NPF)
manages our Truth in Advertising (TIA) program. NPA members report
questionable ad claims to an internal TIA committee of legal counsel.
This special committee reviews claims to determine if they are over the
line and then takes two actions.
The first is to mail a cease and desist letter to a company it
deems has crossed that line. I have an example of that letter here that
I will attach to my testimony. The second is to refer cases to FTC and
FDA where potentially fraudulent advertising persists.
Since the truth in advertising program has begun, The TIA program
has issued a total of 446 of these letters to companies. Of those, 320
acknowledged the issues noted and made immediate changes. If companies
do not take immediate action, the TIA committee refers them directly to
FTC and FDA. Our TIA group also meets regularly with officials at each
agency to help identify and weed out fraud.
Our TIA program shows that NPA members want those who don't play by
the rules brought into compliance or pushed out of any appearance of
being a part of the legitimate industry that so many Americans look to
for their health and wellness.
So we view our role as playing a strong partnership with regulatory
officials, since we share their goals and objectives. But we do depend
on Federal authorities to provide that enforcement action to make all
of this a reality. In this arena, we see positive action, as well as
some areas for consideration and some of concern.
As we have heard this morning, the dietary supplement industry is
regulated both by the FTC as well as the Food and Drug Administration
(FDA), where I served previously as the Director of Dietary Supplement
Programs. FDA can take a substantial number of enforcement actions, and
in the recent past has used some for the first time: including
mandatory recall, administrative detention, and injunctions and
seizures for those recidivist firms failing to meet minimal quality
standards. As we heard earlier, under a Memorandum of Understanding
(MOU) with the FDA, the FTC has primary regulatory responsibility with
respect to the truth or falsity of all advertising (other than
labeling) of foods, devices, cosmetics, and weight loss services. Under
those current authorities, the FTC has taken substantial action against
firms that have deceived consumers with regards to weight loss.
NPA fully supports those efforts, as they demonstrate FTC's ample
and adequate current authority to enforce against deceptive advertising
practices and protect consumers against fraud. But as helpful a
deterrent as these high-profile cases are, we still wrestle with the
Internet advertising and fly-by-night issues we are discussing today,
so what to do about that?
We believe one area for consideration would be to encourage FTC to
use existing authorities more on the front end: to be more agile and
disciplinary to companies without regard to revenues. In other words,
we think that more aggressive enforcement of the Internet fly-by-nights
needs to be just as important a priority for FTC as the large-scale
enforcement actions which we also support.
For example, FTC currently has as part of its enforcement arsenal
very effective tools like misdemeanor prosecutions and civil monetary
penalties which it uses very well for those already under consent
orders or who have violated other applicable laws. But in our view, it
appears that there is a predilection by regulators to pursue these more
sizable and protracted cases, perhaps at the expense of more regulatory
muscle on the front end against companies of any size or revenue
stream.
A more balanced approach would both help curb the deceptive
advertising and also serve as a helpful deterrent for other bad actors
who might think they can get away with it. If FTC doesn't take down any
fly-by-nights, more will unfortunately be tempted to get into the game.
Lastly, while we support the FTC's mission to prevent and punish
unfair and deceptive acts, we are concerned with a recent development
as it pertains to the use of FTC consent orders, which may have
unintended consequences for consumers. Obviously, consent orders are
case specific: they are not designed to be applied across the industry.
However, we are seeing some evidence that this is happening, which we
believe could have negative outcomes for consumers both from a cost
perspective, but also in potentially reducing the quality and quantity
of information about products available to them.
When application of extra-statutory interpretations moves from
consent orders into rules of general applicability, such overreach is
not beneficial to anyone and particularly to consumers. One example
would be FTC's apparent new requirement that additional studies and
research are necessary prior to advertising. Specifically, I'm
referring to a requirement to conduct two double-blind, randomized
control trials to support legal structure/function statements, which is
not a current legal or regulatory requirement.
This is not only outside of the statute, but leads to unnecessary
and inefficient use of resources, which chills innovation and dis-
incentivizes the very research needed to substantiate claims (in an
environment where recouping research dollars on natural products is
very difficult because of the way the patent rules govern our industry,
but that's a subject for another hearing).
Moreover, this is being done without any cost-benefit analysis on
behalf of consumers or the economy. For example, if such standards are
applied generally, a firm investing in the currently-required study
that is well controlled and meets both the competent and reliable
scientific standards would be prohibited from sharing those findings
with consumers. It would actually result in less information being
available to consumers--not more--and effectively changes the rules in
the middle of the game. This is a critical concern, as it appears to
abridge protected speech, which could constitute a violation of the
Administrative Procedure Act (APA) or present possible first amendment
issues.
We would like to work with FTC and others to address these
concerns, to help improve the enforcement regime and ultimately to
protect consumers while giving them the widest access to the
information they need.
Madam Chair, thank you for holding his hearing. We support efforts
to stop illegal consumer fraud. We strongly support resources for
government agencies to enforce the law, in addition to any discussion
on how current programs can be aligned across agencies to better
protect consumers.
We stand ready to work with the Committee, the government, NGO's
and supporting agencies to help identify and remove criminal activity
which is the root cause of this matter, from the system.
Thank you and I look forward to your questions.
Senator McCaskill. Great. Thank you.
We'll have questions. And we have votes that begin in a
little less than an hour, so hopefully we'll have an
opportunity, everyone who is here, to have at least two rounds
of questions.
I can't figure this out, Dr. Oz. I get that you do a lot of
good on your show. I understand that you give a lot of great
information about health, and you do it in a way that's easily
understandable. You're very talented. You're obviously very
bright. You've been trained in science-based medicine.
Now, here are three statements you made on your show. ``You
may think magic is make-believe, but this little bean has
scientists saying they've found the magic weight-loss cure for
every body type. It's green coffee extract.'' ``I've got the
number one miracle in a bottle to burn your fat. It's Raspberry
Ketone.'' ``Garcinia Cambogia. It may be the simple solution
you've been looking for to bust your body fat for good.''
I don't get why you need to say this stuff, because you
know it's not true. So, why, when you have this amazing
megaphone and this amazing ability to communicate, why would
you cheapen your show by saying things like that?
Dr. Oz. Well, if I could disagree about whether they work
or not, and I'll move on to the issue of the words that I used.
And just with regard to whether they work or not, take the
green coffee bean extract, as an example. I'm not going to
argue that it would FDA-muster if it was a pharmaceutical drug
seeking approval, but among the natural products that are out
there, this is a product that has several clinical trials.
There was one large one, a very good-quality one, that was done
the year we talked about this, in 2012. Listen, I give----
Senator McCaskill. No, what I want to know--I want to know
about that clinical trial, because the only one I know is 16
people in India that was paid for by the company. In fact, at
the point in time you initially talked about this being a
miracle, the only study that was out there was the one with 16
people in India that was written up by somebody who was being
paid by the company that was producing it.
Dr. Oz. Well, this paper argued that there was no one
paying for it, but I have the four papers--five papers,
actually--plus a series of basic science papers on it, as well.
But, Senator McCaskill, if I--we can spend a lot of time
arguing the merits of whether green coffee bean extract is
worth trying or not worth trying. Many of the things that we
argue that you do with regard to your diet are likewise
criticizable. I mean, should you be on a low-fat diet, a low-
carb diet? We'd be--I've spent a good part of my career
recommending that folks have a low-fat diet. We've come full
circle on that argument now, and no longer recommend that, many
of us who practice medicine, because we realized that it wasn't
working for our patients.
So, it is remarkably complex, as you know, to figure out
what works for most people, even, in a dietary program. Even in
the practice of medicine, we evolve by looking at new ideas,
challenging orthodoxy, and evolving them.
So, when I hold--you know, these are the five papers. These
are clinical papers. And we can argue about the quality of
them, very justifiably. I can pick part papers that showed no
benefit, as well. But, at the end of the day, if I have
clinical subjects, real people having undergone trials--and, in
this case, I actually gave it to members of my audience. It
wasn't a formal trial, it was just an----
Senator McCaskill. Which wouldn't pass the--the trial you
did with your audience, you would not----
Dr. Oz. No, of course not.
Senator McCaskill.--say that would ever pass scientific
muster.
Dr. Oz. No, I would never publish the paper. It wasn't done
under the appropriation IRB guidance. That wasn't the purpose
of it. The purpose was for me to get a thumbnail sketch, Was
this worth talking to people about, or not? But, again, I don't
think this ought to be a referendum on the use of alternative
medical therapies, because, if that's the case--listen, I've
been criticized for having folks come on my show talking about
the power of prayer. Now, again, as a practitioner, I can't
prove that prayer helps people survive an illness. I know they
had as----
Senator McCaskill. But, you don't have to buy prayer, Dr.
Oz.
Dr. Oz. It's hard to buy prayer. That's the difference.
Senator McCaskill. Prayer is free.
Dr. Oz. Yes, prayer is free. And people--that's a very good
point.
[Laughter.]
Dr. Oz. Thankfully, prayer is free. And so, when--but, I
see, in the hospital, when folks are feeling discomfort in
their life--and a lot of it's emotional--when they have people
praying for them, it lightens their burden.
So, my show was about hope. I wanted--and, as you very
kindly stated, we've engaged millions of people in programs,
including programs we did with the CDC, to get folks to realize
that there are different ways that they get to rethink their
future, that their best years aren't behind them, they're in
front of them, and they actually can lose weight.
So, if I can just get across the big message that I
actually do personally believe in the items that I talk about
on the show. I passionately study them. I recognize that
oftentimes they don't have the scientific muster to present as
fact, but, nevertheless, I would give my audience the advice I
give my family all the time--and I have given my family these
products, specifically the ones you mentioned--then I--I'm
comfortable with that part.
The--where I do think I've made it more difficult for the
FTC is that, in an intent to engage viewers, I used flowery
language, I used language that was very passionate, but it
ended up not being helpful, but incendiary. And it provided
fodder for unscrupulous advertisers.
And so, that clip that you played, which is over 2 years
old--and I've done hundreds of segments since then--we have
specifically restricted our use of words. We--literally not
speaking about things I would otherwise talk about. There's a
product that I've never talked about in the show that I feel
very strongly about, because I know what will happen. I will
say something very--in fact, we did a show with Yakon syrup,
which you did not bring up. It was a--it is a South American
root that had a big study published on it--I think, a very
high-quality study--where they showed, not only did it help
people lose weight, but, more importantly, helped their health.
It was done on women who were diabetic. Done by an academic
center down there. It was not funded by industry. And we talked
about it, and I used as careful language as I could. And still
there were Internet scam ads picking one or two supportive
words, where of course I support them--I wouldn't be talking
about it, otherwise----
Senator McCaskill. Well----
Dr. Oz.--and they still ended up out there.
Senator McCaskill.--listen, I'm surprised that you are
defending--I mean, I've tried to really do a lot of research in
preparation for this hearing, and the scientific community is
almost monolithic against you, in terms of the efficacy of the
three products that you called miracles. And when you call a
product a miracle, and it's something you can buy, and it's
something that gives people false hope--I just don't understand
why you needed to go there. You've got so much you do on your
show that makes it different and controversial enough that you
get lots of views. I understand you're in a business of getting
viewers, but I would ask you to look at the seven claims that
the FTC put out on the Gut Check. It's very simple. ``Causes
weight loss of 2 pounds or more a week for a month without
dieting or exercise; causes substantial weight loss, no matter
how much you eat; causes permanent weight loss,'' like you
said, ``looking for to bust your body fat for good.'' If you
just look at those seven, and if you spend time on your show
telling people that these are the seven things you should know,
that there isn't magic in a bottle, that there isn't a magic
pill, that there isn't some kind of magic root or acai berry or
Raspberry Ketone that's going to all of a sudden make it not
matter that you're not moving and eating a lot of sugar and
carbohydrates. I mean, do you disagree with any of these seven?
Dr. Oz. Senator McCaskill, I know the seven. I say those
things on my show all the time. When I----
Senator McCaskill. Well, then why would you say that
something is a miracle in a bottle?
Dr. Oz. My job, I feel, on the show is to be a cheerleader
for the audience. And when they don't think they have hope,
when they don't think they can make it happen, I want to look,
and I do look, everywhere, including in alternative healing
traditions, for any evidence that might be supportive to them.
So, you pick on green coffee bean extract. With the amount of
information that I have on that, I still am comfortable telling
folks that, if you can buy a reputable version of it--and I say
this all the time--I don't sell it, and these are not for long-
term use--and by the way, with green coffee bean extract as an
example, it's 1 pound a week over the duration of the different
trials that have been done. That happened to be the same amount
of weight that was lost by the 100 or so folks on the show who
came on. And half of them got a placebo. We actually got fake
pills, gave it to half the people, real pills to the other
half. And it's sort of the same thumbnail. I'm looking at--a
rough idea--if you can lose a pound a week more than you would
have lost, doing the things you should be doing already--you
can't sprinkle it on kielbasa and expect it to work. But, if
that trial data is what's mimicked in your life, and you get a
few pounds off, it jumpstarts you and gives you confidence to
keep going, and then you start to follow the things that we
talk about every single day, including all those seven items. I
think it makes sense.
Senator McCaskill. Well, I'm going to give time to my
colleagues now, and hopefully I'll have a chance to visit with
some of the other witnesses in the next round. I will just tell
you that--I know you feel that you're a victim, but sometimes
conduct invites being a victim. And I think if you would be
more careful, maybe you wouldn't be victimized quite as
frequently.
Dr. Oz. Senator McCaskill, it--those topics you mentioned
are over 2 years old. I have not been talking about products in
that way for 2 years. And it has not changed at all what I'm
seeing on the Internet. And, frankly, it's getting worse. So, I
completely heed your commentary, and I realize--to my
colleagues at the FTC--that I have made their jobs more
difficult. That's why I came today.
Senator McCaskill. Good.
Dr. Oz. I'm cheerleading for this process. I want to do
anything I can to help, but taking away those words doesn't
change the problem that's already happened.
Senator McCaskill. Senator Heller.
Senator Heller. Thank you.
You're the popular person, I guess, on the witness stand
today, Dr. Oz.
[Laughter.]
Senator Heller. And I just had a group of students,
outside, and they all knew who you were. So, I asked these
students, who--clearly, their parents or someone watch your
show and pay attention.
Let me ask--let's be real clear. Do you believe that
there's a miracle pill out there?
Dr. Oz. There's not a pill that's going to help you, long
term, lose weight and live your--the best life without diet and
exercise.
Senator Heller. Do you believe there's a magic weight-loss
cure out there?
Dr. Oz. It--the word--if you're selling something because
it's magical, no. If you're arguing that it's going to be like
magic, because if you stop eating carbohydrates, you're going
to lose a lot of weight, that's a truthful statement. You may
not agree with the flowery use of the word ``magic,'' but it is
true that most people cutting out simple carbs will lose
weight.
Senator Heller. Well, tell me what works for most people.
You mentioned that to the Chairman. What works for most people?
Dr. Oz. What works for most people is a diet based on real
food, food that comes out of the ground looking the way it
looks when you eat it, that's not been processed, with some
physical activity. Most of weight loss, I believe, is about the
food choices you make. Most are--keeping your weight low is
about the physical activity you engage in.
Senator Heller. OK. And it is true that you do not endorse
any products or receive any money from any product sold?
Dr. Oz. That is true.
Senator Heller. OK. Now, you've worked--you said you had
some ideas, because you've worked to stop advertisers from
using your names and likeness. And, in your testimony, you
address online advertisements. What would you like to see done?
Dr. Oz. If I can just give three ideas. I'm just trying to
be constructive.
Senator Heller. I'd like to hear them.
Dr. Oz. I think the private sector can help by creating a
Quick Reference Registry that lists celebrities who are
legitimately connected to products. So, I don't happen to have
any products that I sell, but whether the services are being
promised--Ellen Degeneres, Jimmy Fallon, Rachael Ray, and the
list of scam celebrities goes on--if all of us made a list of
what products we actually do work with, it would make it easier
for Web hosting services to say, ``Well, it was--Dr. Oz doesn't
have any products he sells, so then--how can they run an
advertisement saying he's selling this?''
Second idea, we have been--in whistleblower systems that
are, in fact, in workplace safety, we have them for financial
services. I think honest employees deserve compensation and
reward if they help expose illegal behavior by their employers,
and I think we ought to incentivize whistleblowers in this
space, as well. It's that big of a problem. When I busted those
scam artists in San Diego, there were people who worked in that
company who knew what they were doing was wrong and might have
come forward.
And third, I would argue that we can create a private-
sector-funded bounty that would--might help with getting bounty
hunters, effectively, on the Web to engage. People who have
time and desire and knowledge to go after some of these folks.
A lot of times, you know, the people who are victims of these
infringements, myself included, many of the people on this
panel, would love to do anything we can to empower private
citizens to shut down scammers. If it helps the FTC, I think it
might be worthwhile, considering a bounty system--again, funded
by the private sector--not looking for new laws, nor are we
looking for government funding of any of these initiatives.
Senator Heller. Thank you.
Mr. Haralson, what is your organization, TrustInAds.org,
doing to stop these third-parties from placing ads on websites
and perhaps those ads that are less truthful?
Mr. Haralson. Well, again, as I pointed out in my
testimony, you know, our companies are deeply incentivized to
making sure that these ads stay off of our platforms. I think
having user trust in the advertisements that they see is
imperative to making sure that the Internet economy and this
vibrant advertising ecosystem survives.
When we do--I mean, our companies have very sophisticated
automated filtering systems that look for this kind of stuff.
And when we do find these types of ads, they're automatically
removed, even from our systems, in most cases long before
they're actually served by--or seen by users. But, at the same
time, as we are notified or we do see bad ads that are on our
platforms, they are immediately removed, the advertiser account
is reviewed, and appropriate action is taken, when warranted.
Senator Heller. Thank you.
Mr. Chairman, thank you.
Senator McCaskill. Senator Klobuchar.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Chairman. Thank you
for holding this hearing.
Thank you, to all of you.
Yesterday, I looked up the top-selling weight-loss products
on Amazon. And even with the FTC's actions against green coffee
marketers, green coffee is still a product in the top-20
selling products. The rest of the products are currently
Garcinia Cambogia-related products, which I understand was
featured on your show, Dr. Oz, but it also was highlighted as a
product and that advertisers used to scam consumers by creating
a fake website, claiming to be Women's Health magazine.
When it was on your show, did you talk about the side
effects? And I know Senator McCaskill has questioned you at
length about this. You said this was all 2 years ago, and
you're not making these claims anymore. But, what--did you talk
about the side effects then? And did the deceptive practices
then coming out of that change how you've conducted your shows?
Dr. Oz. So, I actually brought transcripts of these
different shows. And we would, in each case, have an expert who
spends their entire life dealing with dietary supplements talk
about the different products. They review pluses and minuses in
most of the--and I just went through and leafed through a few
of these pages. But, as--you know, I look at these scripts, and
I think to myself, ``I wish that they would have just played
another 30 seconds of the little clip they used for the
advertisements, that they--we often see on the Web.''
So, as an example, with the Garcinia show, ``I'm going to
say something for everyone to hear. Please listen carefully. I
don't sell the stuff. I'm not making money on it. I'm not going
to mention any brands to you, either, because I don't want you
to control.'' I bring that up, because--and, by the way,
elsewhere in the segment, I also talked specifically about the
fact that, ``If you don't exercise and diet at the same time,
it's not going to work. You know, folks, it's just--it's a
pill. Don't go home thinking it's just a pill that's going to
help you. But, together with the normal, natural things we tell
you to do with the foods you eat or healthy lifestyle,'' et
cetera. So, we make those points.
You know what the biggest disservice I've done for my
audience? It's not the flowery language that Senator McCaskill
is criticizing me for. It's that I never told them where to go
to buy the products. I wanted to stay above the fray, and I
felt, in my own mind, that if I talked about specific companies
selling high-quality products, it would seem like I was
supporting those companies. And so, I never gave them the--the
audience, an idea of where to go to buy the stuff. So, that
opened up a huge market for folks to just make--take stuff,
real stuff--doesn't, practically, matter--and start to use my
name to try to sell. I left my audience hanging, thinking I was
doing the ethical thing.
And I firmly believe, if I had gone on and called it a
miracle--and again, I'm not--it's not a miracle like it's, you
know, going to work every day for the rest of your life for
every person, but it's miraculous that something like this is
out there, we don't know about it. If I had told them, ``Go buy
these four companies' products, because they're the ones that
are reputable,'' it would have killed this off. And I blame
myself.
Senator Klobuchar. So, what stopped you from doing that,
then?
Dr. Oz. I thought that it was commercial, that if I--a
doctor shouldn't sell products. You wouldn't trust me if you
came to me for advice and I said, ``You know, Senator, you've
got, you know, a stubbed toe, here. Take my version of a
salving cream, here''--it just doesn't sound and feel right to
me. I really feel that--I--in the Internet Age, taking a
bricks-and-mortar approach to it doesn't work. And I should
have been savvy enough to say to myself--and I kick myself,
still--maybe I'll do it in the future--that I should just say,
``Here are the companies I trust. Just go buy their products,
because they're not going to scam you, they're not going to
make illegal claims.'' If I say that it helps you lose a pound
a week for 8 weeks, which is what a trial says, and then
someone on the Web takes that and changes it to, you know, 40
pounds in 3 weeks, which you can only really do through an
amputation, then all of a sudden, you know, it's like I said
those things, and it hurts me and--part of the reason I came
today, this is a huge problem for me.
Senator Klobuchar. OK. And I--as someone that's seen these
ads, they're very, very seductive, when you're looking through
things and trying to figure out what--a good diet plan to go
on. And I--I mean, you're going to have two choices, here.
Either you don't talk about these things at all that are going
to be susceptible to this kind of scam or you're going to have
to be more specific, because right now it isn't working. And
obviously you're not the only celebrity that has had this
happen to them.
And, I guess, Ms. Engle, I'd go back to you on this, is
whether or not you think you have enough resources to go after
this, what you think of Dr. Fabricant's idea that you shouldn't
just be focused on fly-by-nights or--what do we need to do,
here, to get a handle on this?
Ms. Engle. The FTC does put a lot of resources behind our
weight-loss fraud enforcement efforts, and we do pursue both
fly-by-night companies and more established companies. The NPB
Green--Pure Green Coffee case I mentioned was pretty much a
fly-by-night company. We also pursued 11 different companies
that were selling acai berry weight-loss products through fake
news sites and affiliate marketing over the Internet, in
addition to Sensa and some of the other more established
companies.
So, you know, we do look across the board. Unfortunately,
there are a lot of players in this space. These cases can be
time-intensive to investigate. We do look at the studies that
are out there, very carefully. We hire experts. Often, the
defendants will hire experts. We pay a lot of close attention,
because we don't want to--you know, we want to be sure where
the science is. We don't want to challenge something as false
or misleading if, in fact, it has real efficacy, if the claims
are substantiated.
So, the cases are time-intensive, but, you know, we're
trying to bring as many of them as possible and to get as much
money back for consumers as we can.
Senator Klobuchar. Do you think there should be more FDA
regulation of these supplements and these kinds of things?
Would that be helpful, beyond the advertising? I know we've had
some votes on this and discussed this in Congress.
Ms. Engle. Well, I can't--certainly can't speak for the
FDA. I understand that they have their hands full with--in the
case of dietary supplements, with adulterated products. They've
taken number--a number of actions against weight-loss products
that actually contain prescription drugs in them, and they're
putting their resources there.
Senator Klobuchar. But, do you think that we need a bigger
approach to this than just looking at a celebrity list or
advertisements if people are falsely relying on claims that
aren't true?
Ms. Engle. Well, I do think it would be helpful for the--
first of all, I think the approach taken by the TrustInAds.org
organization with Google and the others is quite helpful. I
think if--the media could do a better job of screening out
these facially false claims, and we're hopeful that the BBB
will work with us to better disseminate that and get that
message across. And that can help just, you know, eliminate
these--some of these ads, at least, from running.
Senator Klobuchar. Thank you.
Senator McCaskill. Ms. Engle, I know you've taken a lot of
action against various companies--and some of them, fly-by-
night--but, what about the media outlets that run these ads?
You all have never gone there. Talk about that. Is that an
approach that you've considered? Is that one that you have
authority to do? If you've got a media outlet that is, you
know, particularly using a lot of fraudulent advertising, that
appears to be fraudulent on its face, but yet they're not
screening them out, why no enforcement action there?
Ms. Engle. Well, the media enjoy significant First
Amendment protections, so there are certainly those issues if
we were to attempt to sue a media company for running a
deceptive ad. Section 12 of the FTC Act does actually give us
authority to pursue any entity that disseminates a false or
misleading ad for a food, drug, device, or a cosmetic. But, we
have--really thought it would--make more sense to work with the
media voluntarily, cooperatively to--by issuing--actually, this
Gut Check Guide that we issued earlier this year was a
reissuance of the guidance we first issued back in 2003. We
called it ``Red Flags.'' And we've renamed it. We had good
success at that time, particularly with the magazines, in
getting them to stop running ads containing these seven
facially--false claims. And we think it--you know, it makes
more sense for us to try to work voluntarily with the media.
Senator McCaskill. Mr. Peeler, I know you've said that some
media have done a sophisticated job in screening, and some
haven't. Who's doing a good job, here, and who's doing a bad
job?
Mr. Peeler. It largely varies by the size of the media. The
national broadcast media have historically had very rigorous ad
screening programs, so you would not see the types of ads that
you were showing today on the national advertising part of the
media.
Senator McCaskill. But, the national--the interesting thing
is, those national broadcasting companies own a lot of the
cable stations that these ads are appearing on.
Mr. Peeler. And the----
Senator McCaskill. It's the same ownership.
Mr. Peeler. And the screening that is done for the
affiliates and for the cable channels varies. And then, when
you get down to smaller media--and I think radio is a good
example. It's a local media, the advertising staffs are pretty
small, and I think that's where something like what the FTC has
just done highlighting seven false weight-loss claims, that
even an ad buyer in a very small media could just sit and look
at those seven claims and say ``yes'' for this and ``no'' for
that. A claim that you're never have to diet again or that you
can eat all you want and take this pill and lose weight, those
claims we still see, and they shouldn't be getting on the media
at all.
Senator McCaskill. But, satellite radio is not local, and
they're all over satellite radio.
Mr. Peeler. Yes. There have been a number of changes in the
technology that the industry needs to catch up with, you're
exactly right.
Senator McCaskill. So, you didn't want to say satellite
radio, you just waited for me to say it.
[Laughter.]
Senator McCaskill. I do think that there is a problem
there.
Mr. Peeler. And I would add that there are really two
things to look at in media screening. One is the traditional
type of media screening that the broadcast networks do. The
second is the program that Rob--Mr. Haralson--just talked
about, which is trying to translate that to the new media and
look at these claims really not on a text basis, but almost an
algorithmic basis. And that's an area that has a lot of promise
for real progress.
Senator McCaskill. Talk a little bit about the fly-by-
nights. I think Dr. Fabricant's point that it's easier to go
after L'Occitane and Sensa and companies that you can find that
have buildings and that are actually manufacturing something
and putting their label on it, than these post office boxes.
And that's one of our conundrums in consumer protection in this
subcommittee. So many hearings we've had, whether it's
robocalls or other topics we've had hearings on, finding the
post office box or finding the IP address, and taking action
against those who are responsible, is very complicated in this
world, especially when it--you're looking at technology, in
terms of IP addresses that certainly many of them are not sited
in this country. Tell me about what kind of resources you may
need, or that you don't have, to do a better job after the fly-
by-nights.
Ms. Engle. Yes. So, you're absolutely right. I mean, when
you see an ad on the Internet--so, for us, the first thing is
to try to figure out who's behind that ad. And it's not
actually easy to do. What we're seeing a lot nowadays is that--
you know, that some company will be working with a number of
affiliate marketers through an affiliate network, and so there
is a whole host of different companies that are actually
placing the little ads that you see. And then, when the
consumer clicks on it, you know, one tiny trip--tip to a flat
belly, or something like that--one weird old trick, you know,
to lose weight, something like that--the consumer clicks on
that, and, if they buy the product, then that affiliate gets
paid, but that's not actually the company that's selling the
product. There's another company who's behind the product. And
it requires us to send out multiple rounds of subpoenas to the
Web hosters and to the ad networks to try to figure out who's
behind this, and then--and that was what we did, actually, in
the acai berry sweep. And it--you know, it takes a significant
amount of resources. We're able to do it. We have compulsory
process authority--that is, we can subpoena this information.
But, it is time-consuming.
Senator McCaskill. Well, what about the middleman, here?
Have you gone after the middleman, the ones that are actually--
the affiliates that you talk about that are actually the ones
that are moving these ads around the Internet, and then they
are really a conduit to the actual product company that is
behind the curtain? Have you taken action against those folks
that are actually placing the ``one secret to get rid of your
belly fat''?
Ms. Engle. Yes, we have. We have gone after affiliates. And
one of the issues there is--and we've gone after some large
affiliates--but, one of the issues there is, when we go in, we
never know who--how big the company is. And sometimes it turns
out they're quite small, or they haven't made many sales, and
it's not worth pursuing. But, we have gone after the larger
affiliates, as well. We've gone after every player in the
ecosystem.
Mr. Peeler. And, Senator McCaskill, could I add that, for
all frauds, the BBB system, with 100 offices around the
country, gets about a million complaints and provides a service
for consumers, where you can go and check and see what types of
complaints a company is getting. And, as I said in my
testimony, very often misleading performance of claims are also
accompanied by bad refund policies and negative-option shipping
policies. The St. Louis Better Business Bureau had one of these
companies that was just billing people sort of randomly for the
products. So, if the consumers will go to the BBB website
before they buy and check and see what type of complaint
history this company has, it will help. It won't eliminate the
problem, but it would help, and help protect them.
Senator McCaskill. Senator Heller?
Senator Heller. Thank you.
Ms. Engle, I want to know a little bit more about your
recent consent orders it announced as part of the Operation
Failed Resolution. The FTC is now barring defendants from
making certain claims unless they have at least two adequate
and well-controlled human clinical studies. Is that accurate?
Ms. Engle. Yes. Those cases all required the companies
under order to have at least two well-controlled studies to
support weight-loss claims, going forward.
Senator Heller. It's my understanding that the FTC has also
tried to apply that elsewhere. And even though there are some
current guidelines in the agency that states that determining
whether competent and reliable scientific evidence exists is a
flexible and a fact-specific inquiry, do you have conflicts? Or
are you applying this new standard elsewhere? And is there a
conflict in some of the regulations that you're trying to
enforce?
Ms. Engle. I don't see any conflict. The--so, the basic law
is that companies must have a reasonable basis for the
advertising claims that they make at the time they make those
claims. What constitutes a reasonable basis will depend on the
product and the claim. In the case of products that promise
health benefits, the Commission has required competent and
reliable scientific evidence. And then, again, what constitutes
competent and reliable scientific evidence will vary depending
upon the claim. So, for example, a claim that a product will
prevent cancer or treat cancer, for example, will require a
higher level of evidence than a claim that a product, you know,
will smooth dry skin.
So, in the case of weight-loss products, in particular,
based on the factors we consider, in consultation with experts,
we've determined that randomized controlled clinical studies
are needed in order to substantiate a claim that a given
product will cause weight loss.
The Commission has required two of these studies in its
orders. Now, it's not--I'm not saying that if a company came to
us and had one good study on weight loss, we would say, ``Oh,
that claim is not substantiated.'' But, once we have determined
that a company has violated the FTC Act, has made
unsubstantiated weight-loss claims and they are now under
order, we have put in a requirement that, going forward, they
should have two studies. And these kinds of studies for weight
loss do not need to be particularly long term, they're not
particularly expensive, relative to the amount of money that
can be made for these products. And, given the level of fraud
that we have seen in this area, it's important to have the
extra assurance of a second study to assure that, you know,
this is a real result, that this wasn't due to some fluke or
inadvertent bias or something like that in the study.
Senator Heller. Let's talk about your dietary supplement
guidelines. We have not revised that or repudiated some of
those guidelines, even though there are some parts of those
guidelines that seem or appear to be inconsistent with the
FTC's current stance, as we just mentioned, about competent,
reliable scientific evidence. Do you see it that way?
Ms. Engle. No, I don't see a conflict, because the dietary
supplement guidelines are written broadly to cover the full
range of dietary supplements that may be offered and the full
range of claims that may be made for them. So, the guidance is
written more broadly. And then, again, when we're in the
context of a specific case in a specific investigation of a
product, we know what claims were made for them, what the
ingredients are, and then we have a record on which to base
order requirements for substantiations for claims, going
forward.
Senator Heller. Is there any intention of modifying those
guidelines?
Ms. Engle. Well, there has been some discussion of just
looking at them--they--oh, gosh, they're, I think, 13 years old
now, maybe--to see, you know, what--if they need to be
freshened up. But, again, I don't think there's a conflict
between what they say at all and what we're doing in our
orders.
Senator Heller. OK. Thank you.
Thank you.
Senator McCaskill. Senator Klobuchar.
Senator Klobuchar. Thank you.
And, Mr. Haralson, I want to talk to you a little bit about
the work that you're doing.
Mr. Haralson. Sure.
Senator Klobuchar. And I was just looking at my Twitter
account and found about four of these ads about these things,
like how many cups of coffee I can drink in one day to lose 2
pounds--that was pretty good--and various other things on fat
melting and other things. And I understand that your member
companies permanently suspend advertiser accounts if the
severity of the violation of the ad policy is high. What does
that mean? How many ad accounts have been permanently
suspended? Are there temporary suspensions? And how do you
handle this?
Mr. Haralson. Well, again, I think every company that's
within TrustInAds.org has different approaches and different
policies in place to address these. However, again, it depends
on the severity of the violation or if there are multiple
violations. But, there are options where companies--the member
companies may, for example, work with the advertiser to fix the
ad to make sure that it is in compliance with their ads
policies. There is an option to remove those ads. And then, the
third option, obviously, for--certainly, for egregious
violations, is to suspend the advertiser account.
But, interestingly enough, some of the sophisticated
scammers will immediately try to open new accounts and try to
push their ads again through these filtering systems. So, it
becomes a little bit of a cat-and-mouse game.
Senator Klobuchar. And when you say it's easier to target
vulnerable populations through online advertising than some of
the more traditional methods or--and do you think more online
companies are going to be--I think sometimes, with online, they
think it's a personal message to them. These are often just
from people----
Mr. Haralson. Well, I think that these types of scams
attract the largest constituencies as possible, be it weight
loss, hair loss, whatever you name it. And again, I think that
we're seeing these types of ads across the board, both in
print--or in print media and online.
Senator Klobuchar. OK. How about the protection of data? I
mean, more and more, we're using data collection, things like
Fitbit--I have my--I hope that's not deceptive. I think it's
pretty good.
[Laughter.]
Senator Klobuchar. And, of course, people are getting all
their data collected now on--through this. And it's been
actually--I think it's a pretty interesting way to use, sort
of, self-motivation to get yourself to exercise and other
things. And are companies protecting consumer data to make sure
it doesn't fall into the hands of scammers? What's going on in
that front?
Mr. Haralson. Well, I--for example, I'm not familiar with
if Fitbit collects the data that is on the device that's on
your wrist. I'm--but, as--and I'm a little--can you repeat the
question, or just clarify the question a little bit?
Senator Klobuchar. The question is about--more and more,
the diet data is going online. People are entering things in,
just like they're entering other things in. And has there been
an effort by your member companies to look at how you're going
to protect that data? And maybe someone else can better answer
that.
Mr. Haralson. Well, I'd--again, I'm not--to my knowledge, I
don't believe that our member companies are collecting third-
party data particular to health-related devices or whatever the
case may be. So--but, I'm happy to----
Senator Klobuchar. And we--it's a whole 'nother issue of
some of the popup ads that you get when you start using
products. So--and in a way, that some of them are collecting
it, because then you can get popup ads about things related to
it. But--yes.
Mr. Peeler. And, Senator Klobuchar, there is a fairly broad
coalition, called the Digital Advertising Alliance, that is
looking at the question of collection of data across sites and
doing some pretty significant binary work. The organization was
formed, really, at the request of the Federal Trade Commission,
to look at exactly those issues.
The specific issue that you're talking about, which is
special restrictions on sensitive data about health, is one of
the things that's still under development. That's a fairly
tricky issue to get everybody in the industry onboard with.
But, there is an organization that's been formed, working very
effectively in looking at all those issues.
Senator Klobuchar. So, I'm thinking about all the new money
that's being spent on all these products as people are, you
know, desperately looking at ways to lose weight. And yet,
since the 1960s, adult obesity has more than doubled, leading
to healthcare challenges for our country, as we know. We know
some of these diets are legitimate and well-researched, and
some of them aren't. But, what really bothers me, at its core,
is that, while for the first time we saw leveling out for
kids--not really a big reduction, but a leveling out of the
increase in obesity this last year --we're hoping some having
to do with the work of the First Lady and the work of some of
the school lunch programs, which I don't think we should be
rolling back those standards, but that's a whole nother--
another topic.
What do you think we should be doing to really get people
being able to spend their money on what works and what doesn't?
We have to admit, here, that we have a major problem when
people are spending more and more money and they're gaining
more and more weight.
Mr. Peeler. And, you know, that is precisely the type of
thing that advertisers that sell and market products that do
work worry about. One advertiser comes to mind. He sells
fitness equipment, and people say, ``We watch the ads, you
start sweating while you're watching the ads,'' because it's
very clear that you have to have a dedicated regime, and stick
with it. This advertiser loses sales to these----
Senator Klobuchar. Right.
Mr. Peeler.--fraudulent products, because people say,
``Well, why would I exercise''----
Senator Klobuchar. Right.
Mr. Peeler.--``for 45 minutes if I can just take a pill and
never diet again?''
Senator Klobuchar. Right, exactly. So, your answer would be
to be more intense about going after these fraudulent products.
And I--that's why I keep going back to, not just the
advertising, but the FDA and trying to just get some of them
off the market.
Mr. Peeler. Yes. And I think that there's a big role that
the types of self-regulatory programs--that two-thirds of the
table is talking about--can play to supplement the resources
that the government has. What we see is a lot of cases, where,
when we contact the advertiser--and we do it fairly quickly--
they just say, ``Oh, we'll change that claim.'' We have a
fairly high record of success, and that's that many fewer cases
that the FDA or the FTC have to deal with.
Mr. Haralson. Senator, if it would be possible for me to
add--I mean, one thing, I think, that makes it difficult is the
fact that a lot of these--it's not illegal to sell these
products. I think when it becomes illegal is when you're doing
it under false claims. And so, for our companies that clearly--
some of these claims that are fraudulent violate our ads
policies. But, again, it makes it difficult to substantiate the
good advertisers versus the bad advertisers because of the
sophistication of some of these scammers in the language that
they're using and in the ways that they're to circumvent our
systems to be able to----
Senator Klobuchar. Right.
Mr. Haralson.--get their ads served online.
Senator Klobuchar. Understand. Very good.
Well, I think, to me, it means we need some more standards
and resources. And we appreciate your efforts trying to monitor
them.
Thank you.
Senator McCaskill. Senator Blumenthal.
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thank you, Madam Chairman.
Dr. Oz, I want to pursue a question that Senator Klobuchar
raised. I understand that it's not your policy to support any
particular brands, and that you feel now, as you said to her in
response to one of her questions, that perhaps is a mistake.
So, I'm wondering, would you consider creating a sort of master
list of brands that would be helpful to consumers? Because,
after all, you have the immense power of your voice and
credibility that would be helpful to consumers if you created
such a master list of brands that you feel do work and are
helpful.
Dr. Oz. I would love to do that. And I've been speaking to
people who I trust in the industry about how to go about it. My
best estimates--and I'd love for other industry members to
offer this--is that probably 80 percent of the products which
are made by 20 percent of the companies are high-quality,
reputable products by people who really do their homework and
are audited in many different ways, good manufacturing
processes and the like. And then 20 percent of the products are
made by, you know, a lot of the companies--theoretically, 80
percent--who really aren't that good. They're fly-by-nights.
The quality issues are a major concern. The post office box
example Dr. Peeler --Mr. Peeler gave is a good example. When I
busted these folks in San Diego. I went to their listed
address. It's a post office box. So, you really could never
find anybody.
So, I--I've been actively looking at that. With your
suggestion of support, I think I'm going to do it. And I think
it'll do a lot to drain the swamp that we've created around
this area.
Senator Blumenthal. Well, I would encourage you to do it.
Draining a swamp is really very, very important, because, in
this area, as you know, and I think many of us know--I was
attorney general of a State for 20 years. I did a lot of work
in this area. And if there is any area where consumers are most
susceptible and vulnerable to misleading and false pitches, I
think it is this one, because their hopes are so high and their
needs often are so great. So, I think that would be a welcome
development.
I introduced a measure called the Dietary Supplement
Labeling Act, along with Senator Durbin, last August. And this
bill would require dietary supplement manufacturers to register
their products with the FDA and disclose the known risks of
their ingredients on a product's label. And I think that this
kind of measure is crucial to provide information to consumers
regarding dietary supplements and help the FDA identify
potential health concerns. And, as you've suggested, a master
list of celebrity endorsements might be helpful for the FTC to
identify violators, and this bill would create a master list of
dietary supplements, similar to that one, that could cause
adverse effects, to help consumers understand the risks.
What are your thoughts on that legislation?
Dr. Oz. I think it's a very wise place for us to invest
resources. Some of these dietary supplements, especially the
ones that are stimulatory supplements, raise great concerns for
me. They're often adulterated, even though they claim they're,
you know, not working that way. It--that has been a proven way
of getting weight loss. You put a amphetamine-type product in a
drug--in a product, and it'll work with weight loss, but the
side effects are just too great for us to tolerate as a
population.
Senator Blumenthal. That method of weight loss may actually
be unhealthful.
Dr. Oz. Oh, it has been proven to be unhelpful, which is
why the FDA has pulled those products off the market. That's
also part of the challenge we face. We are in a time in our
history where we're getting closer to having FDA-approved drugs
that work in this area. We have a few now, but we've had, you
know, very, very few for many, many years. And so, as we get
better prescription products that would be effective, then more
medicine will turn in that direction.
But, even the very basic techniques that we know work --
bariatric surgery, which we way underperform in this country,
is very effective. But, people don't want to go that far even
though, if you're 100 pounds overweight at age 50, you have the
same mortality rate as if you have cancer. So, these are
desperate situations with desperate people who are looking for
solutions, and that's a recipe for problems.
So, I strongly support the need to look at whether the
products are safe, or not. And the other side of the equation
is trying to find, you know, ways of getting people ideas that
they can use to jumpstart their way back.
Senator Blumenthal. Ms. Engle, let me ask you. Would the
FTC find that kind of list helpful?
Ms. Engle. Well, the Commission itself has not taken a
position on that legislation. Speaking for myself, I think it
could be helpful. I think it could be helpful to FDA,
certainly, in its law enforcement efforts and providing--it
would provide consumers with useful information.
Senator Blumenthal. Thank you.
Thank you all for being here, and thank you for your great
work.
Thank you.
Senator McCaskill. I just want to briefly follow up. I
don't know if anyone else has another follow-up. I want to make
sure--I appreciate, Dr. Oz, that--we've covered a lot of ground
this morning, and a significant part of it was about some of
your language you've used in association with some of these
products on your show. And you indicated that the products I
talked about in my previous questioning, you had--that those
shows were a couple of years ago. Well, 3 weeks ago, I quote
you, ``FBX literally flushes fat from your system.'' ``Every
time you cheat on your diet, I want you to grab one of these
tiny, itty-bitty pills. This tiny tablet can push a lot of fat
out of your belly.''
People want to believe they can take an itty-bitty pill to
push fat out of their body. They want to believe that. And it
seems to me that, instead, if you said, ``Every time you cheat
on your diet, I want you to take a walk,'' that would eliminate
the problem that is at the root of this hearing today. That is
that your credibility is being maligned by fraudsters, and,
frankly, being threatened by a notion that anybody can take an
itty-bitty pill to flush fat out of their system.
In January, you called Forskolin, quote, ``lightning in a
bottle'' and ``a miracle flower to fight fat.'' That was just
in January.
I know you know how much power you have. I know you know
that. You are very powerful. And with power comes a great deal
of responsibility. And I know you take it seriously, and I know
you care about your listening audience and your viewing
audience. I know you care about America's health. And you are
being made an example of today because of the power you have in
this space. And we didn't call this hearing to beat up on you,
but we did call this hearing to talk about a real crisis in
consumer protection. And you can either be part of the police,
here, or you can be part of the problem. And we're just hopeful
that you will do a better job at being part of the police.
Dr. Oz. Well, I came here because I want to be part of the
solution, not part of the problem.
You mentioned FBX, which is basically a fiber. And we know
that fiber, when taken correctly, has been a very effective
tool for weight loss, for the reason that I stated.
Your comments about the language I use is well heard, and I
appreciate it. I host a daytime television show, where I feel a
need to bring passion into people's lives about what they can
do. And I'm very respectful of the fact that, when it's used--
and it has been used--as a way of defrauding people, that it's
a harmful process.
And I appreciate your kind words about the power I have.
I'm in a situation where I'm second-guessing every word I use
on the show right now. FBX is used by my family. I do think
it's important. I do think if you cheat on a meal, it's worth
including some fiber. That's why we tell people to eat
vegetables when they go out for a big meal, because it serves
that very purpose.
So, I'm--you know, I have things that I think work for
people. I want them to try them, just to help them feel better
so they can keep doing the other things that we spend every
single day on the show talking about. And when I feel, as a
host of a show, that I can't use words that are flowery that
are, you know, exultatory, I feel, you know, like I've been
disenfranchised, like my power's been taken away to get people.
You don't want to be in a pulpit talking about how passionate
you are about life and thinking, ``Well, you know, if I use
that word, it's going to be quoted back to me.'' And yes, the
100 words around it are all about doing other things right.
So, I'm very respectful. I've heard the message. I've told
my colleagues at the FTC: I get it.
Senator McCaskill. OK, good.
I want to see all that passion and that floweriness about
the beauty of a walk at sunset or----
[Laughter.]
Dr. Oz. OK.
Senator McCaskill.--you know, the----
Dr. Oz. Touchee.
Senator McCaskill.--how you feel when you get off the bike
in the morning----
Dr. Oz. OK.
Senator McCaskill.--and, I mean, no one's telling you not
to use passion. But, passion in connection with the word
``miracle pill'' and ``weight loss'' is a recipe for disaster
in this environment, in terms of the people who are looking for
an easy fix and getting sometimes, I think, delusional about
whether or not an easy fix is going to be there for them. So--
--
And I appreciate everyone being here. Does anybody else
have anything else?
Senator Klobuchar. Well, I was going to say that we all
experience the feeling, as elected officials, of any word that
can be taken out of context.
[Laughter.]
Senator Klobuchar. We kind of can relate to this.
[Laughter.]
Senator McCaskill. We feel----
Senator Klobuchar. But, at the same time, in addition to
being a celebrity, you're a doctor, and I just believe that
doctors have this duty, as we believe we have to represent the
people we represent--you have the duty to give them the best
evidence. And when stuff is being taken out of context, like it
has, or, you have admitted making mistakes in how you described
a few things, I think you have a duty to correct that record,
and then be careful, going forward, because you can use your
knowledge and your celebrity status to do good things. And
right now, to me, it seems like we're going to the opposite
way, here. So----
Dr. Oz. Well, Senator, just--again, I don't want to rehash
this, but, as a good example, I did a whole show around how
green coffee bean extract and the way it was described was not
the right way to do it. I, you know, in fact, brought audience
members in, did a several-month program to sort of see if it
worked or not. It has no impact. I--the things I have said
continue to be used----
Senator Klobuchar. Right.
Dr. Oz.--as weapons against the public.
Senator Klobuchar. Understand. But, I think that continual
debunking of some of this is helpful, and the emphasis on what
works best. And you know it better than us, so we appreciate it
if you'd keep focusing on that.
Senator McCaskill. Thank you all.
Senator Blumenthal. I think, Dr. Oz, if you ever need
anyone to fill on your----
[Laughter.]
Dr. Oz. I know who to call.
Senator Blumenthal. I'm sure you'd have a few takers in
this body.
[Laughter.]
Dr. Oz. Thank you, Senator Blumenthal.
Senator McCaskill. Thank you all very much.
[Whereupon, at 11:15 a.m., the hearing was adjourned.]
A P P E N D I X
Written Testimony of the Electronic Retailing Association
Submitted by: Julie Coons, President and CEO and Bill McClellan, Vice
President, Government Affairs, Electronic Retailing Association
Introduction
Chairman McCaskill, Ranking Member Heller and Members of the
Committee, the Electronic Retailing Association (``ERA'') thanks you
for the opportunity to submit this written testimony on how to protect
consumers from false and deceptive advertising of weight-loss products.
We strongly applaud your oversight and interest in this important topic
to ensure that our Nation's consumers are protected from bad actors.
The Electronic Retailing Association (ERA) is the trade association
in the United States and abroad that represents leaders of the direct-
to-consumer marketplace, which includes members that utilize electronic
retailing on television, radio and online to engage with consumers.
Today, ERA proudly represents more than 400 companies in countries
around the world including many of the industry's most prominent retail
merchants. ERA's membership consists of a diverse ecosystem of
businesses and entrepreneurs operating at the cutting edge of
innovation who have adapted to the rapidly evolving challenges found in
the current retail landscape.
In 2004 the ERA board of directors partnered with the Council of
Better Business Bureaus, Inc. (CBBB) and the Advertising Self-
Regulatory Council (ASRC) to create the Electronic Retailing Self-
Regulation Program (ERSP). ERSP was created specifically to improve
consumer confidence and demonstrate to the Federal Trade Commission
(FTC) and Congress that ERA is committed to helping companies within
the industry comply with existing regulations. The program strives to
provide a quick and efficient process to review egregious advertising
claims and to alert members, and in some cases the FTC, of noncompliant
companies. We believe that ERSP creates a level playing field for
direct-to-consumer commerce industry professionals and through the
years has increased industry credibility and pride.
The FTC has reviewed our efforts and is generally very favorable of
ERSP, as they share our frustration that a few bad players taint the
direct response industry. However, the FTC has made it clear, that ERA
members should not consider ERSP a ``free pass.'' In other words,
advertising that meets the standards of the ERSP review process may
still be subject to challenge by the FTC and others.
To date ERSP results have been impressive in removing deceptive and
misleading advertising campaigns from the air as the following program
statistics indicate.
ERSP Statistics
Updated May 2, 2014
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Total Direct Response Advertising Tracked 12,600
Home Shopping Reports 30
Total Cases Current and Closed 349
Average Case Length (Calendar Days) 71 days
Cases from Monitoring 187
Cases from Consumer Challenges* 34
Cases from Competitor Challenges* 102
Compliance Cases 26
Advertising Modified or Discontinued 318
FTC Nonparticipation Referrals 27
Compliance Referral to FTC 3
----------------------------------------------------------------------------------------------------------------
While the ERSP program has received praise from all quarters, we
know there is more work to be done. On April 26, 2006 then FTC
Chairwoman Deborah Platt Majoras delivered a speech to industry
participants entitled ``Self-Regulation in the Infomercial Industry:
Moving Forward''. We believe that Commissioner Majoras' remarks remain
relevant today. The vast majority of marketers have stepped up to the
plate and delivered meaningful and voluntary self-regulation. The small
fraction of marketers who refuse to participate in ERSP proceedings or
comply with ERSP decisions are referred to the FTC for enforcement
action. We continue our efforts to urge more cable companies and other
media outlets to support these efforts by closely monitoring ERSP
decisions and utilizing past case history to make current clearance
decisions. Some have chosen to do so while others have not. We look
forward to working with the Committee on strategies to remove deceptive
and misleading weight-loss claims from the marketplace as embodied in
the FTC's ``Gut Check'' guidance. However, it is important to ensure
that any action taken does not have an unintended chilling effect that
punishes those who are doing the right thing. Companies who are
offering legitimate products that are designed to combat the growing
national obesity epidemic marketed with lawful messages should not be
penalized for fear that their advertising copy will not be cleared. ERA
and its members stand ready to assist both the FTC and the Committee as
we continue our collective work to ensure a healthy and vibrant
marketplace for all.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Mary Koelbel Engle
Question 1. In your testimony before the Committee, you state that
``in the case of weight loss claims, in particular, based on the
factors we consider and in consultation with experts, we have
determined that randomized controlled clinical studies are needed in
order to substantiate a claim that a given product will cause weight
loss.'' This statement appears to be inconsistent with existing
Commission guidance that states, with respect to health claims,
``[t]here is no fixed formula for the number or type of studies
required.'' What is the Federal Trade Commission's position on what
constitutes ``competent and reliable scientific evidence'' needed to
substantiate weight loss claims?
Answer. The Commission's dietary supplement guidance referred to in
the question is a guidance document laying out overarching advertising
interpretation and substantiation principles with respect to health-
related claims generally. The guidance provided is necessarily more
general than the analysis the Commission conducts when it has before it
particular claims for particular products. In law enforcement
investigations, the Commission uses six factors (the ``Pfizer
factors'') to determine what constitutes appropriate substantiation for
particular advertising claims in the case before it. These factors
include: (1) the type of product advertised; (2) the type of claim; (3)
the benefits of a truthful claim; (4) the cost of developing
substantiation for the claim; (5) the consequences of a false claim;
and (6) the amount of substantiation that experts in the field would
require.\1\ Using this standard, rigorous evidence is required to
substantiate weight-loss claims. First, the Commission requires a high
level of substantiation--competent and reliable scientific evidence--
for products involving health or safety, and products promoted for
weight loss clearly involve health benefits. Second, for various
reasons, including the placebo effect, it is difficult for consumers to
evaluate the truth or falsity of weight loss claims. In addition,
weight-loss claims often refer to facts and figures (e.g lose X pounds
in Y weeks), also the kind of claim for which the Commission requires
tests or studies sufficient to support the specific figures. With
regard to the third and fourth elements, which are usually considered
together, the benefits of a truthful claim would be substantial, and
the market for an effective product would be enormous. Moreover, the
cost of conducting studies is reasonable when compared to the potential
economic benefit and therefore should not deter the development of new
products. For example, a twelve-week clinical weight-loss study can be
conducted for approximately $300,000, while a weight-loss product
advertising campaign can generate tens or even hundreds of millions of
dollars in revenue. Fifth, the economic harm from fraudulent weight
loss products is substantial. For example, the sales of Sensa from 2008
through 2012 totaled over $364 million. Sixth, the kind of study
experts would require may vary with the type of weight-loss product or
service at issue. For example, a different type of study may be
appropriate for a weight-loss clinic that has access to patient files
than to a dietary supplement or an exercise device. For dietary
supplements, experts would generally require randomized, well-
controlled clinical studies.\2\
---------------------------------------------------------------------------
\1\ See Pfizer, 81 F.T.C. 23, 64 (1972); Thompson Medical Co., 104
F.T.C. 648, 821 (1984).
\2\ See FTC v. Nat'l Urological Group, 645 F. Supp. 2d 1167, 1202
(N.D. Ga. 2008); FTC v. Slim America, 77 F. Supp. 2d 1263, 1273 (S.D.
Fla. 1999): Schering Corp., 118 F.T.C. 1030, 1116 (1994) (ALJ, Initial
Decision).
Question 2. In your testimony, you state that the adequate and
well-controlled human studies the FTC requires to substantiate weight-
loss claims are ``not particularly expensive relative to the amount of
money that can be made for these products.'' Please provide the basis
for this assertion.
Answer. Experts the FTC staff has consulted have indicated that a
well-controlled clinical trial of reasonable size and duration (for
example, 100 subjects over twelve weeks) can be conducted for
approximately $300,000. Even if the cost were higher, it would still be
only a small fraction of the amount that weight loss marketers spend on
their advertising campaigns and an even smaller fraction of the revenue
generated by a successful weight-loss advertising campaign.
Question 3. Some observers have stated that the FTC's requirement
of two well-controlled human studies will create a very high barrier to
entry that will preclude small businesses from entering the marketplace
and stifle innovation on products Americans want. Has the Commission's
Bureau of Economics been consulted for its view on potential
competitive effects of such a requirement?
Answer. As noted in the answer to question 1 above, the FTC does
not have an across-the-board requirement of two well-controlled human
studies to substantiate health-related claims. Rather, the level of
substantiation depends on an analysis of the Pfizer factors.\3\ As for
weight-loss order requiring two controlled trials, please see the
answer to question 5 below.
---------------------------------------------------------------------------
\3\ In the context of a remedial order, the Commission may also
fashion fencing-in relief considering such factors as the
deliberateness of the violation, the violator's past history with
respect to advertising practices, and the transferability of the
challenged practices to other claims or products. Removatron Int'l
Corp. v. FTC, 884 F.2d 1489, 1498-99 (1st Cir. 1989); Sterling Drug v.
FTC, 741 F.2d 1146, 1155 (9th Cir. 1984).
---------------------------------------------------------------------------
The concern that imposing a rigorous standard of substantiation
will result in fewer entrants to the marketplace or stifle innovation
is unwarranted for several reasons. First, strong order provisions
requiring solid scientific evidence safeguards consumers from companies
that have engaged in deceptive advertising in the past by ensuring that
future claims by these specific companies are truthful.
Second, the problem with the current marketplace, particularly for
weight loss products, is not that there are too few entrants, but that
too many companies are flooding the marketplace with exaggerated claims
based on preliminary or weak evidence or even hearsay about the latest
fad ingredient. This view is shared by many in the industry and was
expressed by industry representatives at the hearing.\4\ Responsible
supplement marketers and their trade associations have repeatedly
sought tougher enforcement by both FDA and the FTC to crack down on
unfounded claims and have even funded programs with the Council of
Better Business Bureaus to increase self-regulation.\5\ As CRN's
President stated at the hearing, ``Responsible firms, like CRN's
members, suffer along with consumers as legal, reasonable, and
defensible advertising for weight management claims gets dwarfed by
outlandish claims that violate the law and deceive consumers.'' \6\
---------------------------------------------------------------------------
\4\ See, e.g., Written Testimony of Steve Mister, President and CEO
of the Council for Responsible Nutrition (June 17, 2014) at 4-5
(supporting the FTC's numerous enforcement actions against deceptive
weight loss advertising, while comparing enforcement to the carnival
game ``whack-a-mole,'' with two more examples of deceptive advertising
popping up for every case the FTC targets).
\5\ Id. at 5-6.
\6\ Id. at 5.
---------------------------------------------------------------------------
The harm is not just economic, as discussed in the response to
question 1 above, but also health-related. Unsubstantiated promises of
dramatic and easy weight loss lure consumers away from proven, but more
difficult, methods for managing weight. Given the option of taking a
pill or cutting calories and exercising daily, many consumers will opt
for the pill. With the number of deaths related to poor diet and
inactivity increasing and estimated to overtake tobacco soon as the
leading cause of death,\7\ the harm caused by false claims for
ineffective diet pills is real and substantial.
---------------------------------------------------------------------------
\7\ See Report on the Dietary Guidelines Advisory Committee on the
Dietary Guidelines for Americans, 2010 (June 15, 2010), B1-1, available
at http://www.DietaryGuidelines.gov.
---------------------------------------------------------------------------
The Commission's Bureau of Economics participates in investigations
and has an opportunity to provide a formal opinion to the Commission
that includes its assessment of the merits of the case and the
appropriateness of the remedies. A central part of our economists'
analysis is the impact of the order on the marketplace. If the Bureau
of Economics believes that there is a potential of competitive harm
from requiring two-well controlled human clinical studies in a
particular case, it will advise the Commission of its view.
Question 4. The FTC's current guidance, Dietary Supplements: An
Advertising Guide for Industry, states that animal and in vitro studies
are appropriate ``particularly where they are widely considered to be
acceptable substitutes for human research or where human research is
infeasible.'' Yet in its recent consent decrees, the Commission has
imposed language requiring human clinical studies.
Answer. The Dietary Supplement Advertising Guide makes clear in the
same paragraph that, ``[a]s a general rule, well-controlled human
clinical studies are the most reliable form of evidence.'' The
Commission's recent orders requiring human clinical studies are each
based on a careful analysis of the Pfizer factors referenced above,
including the type of product, the specific claims being challenged as
false or unsubstantiated, and the amount and type of evidence that
experts in the relevant field believe is reasonable. In every instance
where the Commission's order has required human clinical studies, there
has been no basis to conclude that animal or in vitro studies are
acceptable substitutes for human research.
Question 4a. With respect to health-benefit claims, including
weight-loss claims, how does the Commission determine whether human
research is infeasible?
Answer. Commission staff makes that determination through an
analysis of the Pfizer factors and in consultation with experts in the
relevant field of research. This consultation includes a review of the
existing body of scientific literature related to the challenged
claims.
Question 4b. How does the Commission determine whether animal, in
vitro, or other studies are acceptable substitutes for human research?
Answer. Again, the Commission staff makes that determination
through an analysis of the Pfizer factors and in consultation with
experts in the relevant field of research.
Question 4c. Are human clinical trials practical for all health-
benefit claims, including weight loss claims?
Answer. Human clinical studies are feasible and are the widely-
accepted level of evidence necessary for demonstrating the efficacy of
weight loss products. Likewise, for most other health benefit claims
challenged in Commission cases, human research is feasible and the
accepted level of evidence. The guides set out examples of limited
situations where human clinical trials may not be feasible. For
example, a clinical study may not be possible to establish the
relationship between a nutrient and the reduced risk of developing a
health condition that takes years to manifest itself. In such a case,
where a clinical intervention trial would be difficult and
prohibitively costly, the Commission has indicated that it will
consider epidemiologic evidence as an acceptable substitute for
clinical data. Example 14 of the Dietary Supplements Advertising Guide
illustrates this situation.
Question 5. Once the FTC Act enters into a consent decree with a
company regarding unsubstantiated weight-loss claims, the FTC has
required that the company possess at least two adequate and well-
controlled human clinical studies to substantiate future weight-loss
claims. In other words, the FTC is imposing a requirement of a higher
degree of certainty, even though the claims may be otherwise truthful
and substantiated.
Answer. The Commission has wide discretion in determining the scope
of an order necessary to remedy the illegal practices it has found, and
it is well-established that the Commission may impose ``fencing-in
relief'' to help ensure future compliance with the law. See, e.g., FTC
v. Ruberoid Co., 343 U.S. 470, 473 (1952); FTC v. Colgate-Palmolive
Co., 380 U.S. 374, 392 (1965); Removatron Int'l Corp. v. FTC, 884 F.2d
1489, 1498-99 (1st Cir. 1989); Stouffer Foods Corp. 118 F.T.C. 746, 811
(1994). In determining the scope of fencing-in relief, the Commission
considers such factors as the seriousness and deliberateness of the
violation; the ease with which the violative claim may be transferred
to other products; and whether the advertiser has a history of prior
violations. See, e.g., Removatron, 884 F.2d at 1498-99 (upholding well-
controlled clinical testing requirement as reasonable fencing-in);
Stouffer Foods Corp. 118 F.T.C. at 811.
Question 5a. Why are results from one study insufficient, even if
they are fully controlled and independent?
Answer. Recent Commission orders have required that weight loss
claims be supported by at least two adequate and well-controlled
clinical studies. This requirement is applicable only to the company
under order and only to the specific claims covered by that order
provision. It does not necessarily apply to firms not under order. The
Commission imposes the two-study requirement based on a case-specific
factual determination of the nature of the violation.
The need for a second study conforms to well-recognized scientific
principles favoring replication of study results to establish a causal
relationship between exposure to a substance and a health outcome.\8\
Replication is important to reduce the potential for systematic bias,
either intended or unintended. Any clinical trial, even when conducted
by parties independent of the product manufacturer, may be subject to
unanticipated, undetected, systematic biases that operate despite the
best intentions of sponsors and investigators, leading to flawed
conclusions. Replication of results also reduces the likelihood that
the findings are attributable to chance or random error and provides
additional confidence in the validity of the findings.
---------------------------------------------------------------------------
\8\ See, e.g., Thompson Med. Co., 104 F.T.C. 648, 720-21, 825
(1984), aff'd, 791 F.2d 189 (D.C. Cir. 1986); (order requiring well-
controlled clinical testing upheld as reasonable fencing-in).
Question 5b. When the FTC applies this heightened substantiation
requirement in a consent order, is it permissible for the Commission to
prohibit (or ``fence in'') conduct beyond the scope of the alleged
violation?
Answer. The Commission has the discretion to issue orders
containing ``fencing-in'' provisions that are ``broader than the
conduct that is declared unlawful.'' \9\ The two-study requirement
typically applies to the specific weight loss or health claims
challenged in the complaint and other closely-related claims. Broader
fencing-in provisions governing substantiation of other health
benefits, performance, and efficacy claims typically apply the more
general standard of ``competent and reliable scientific evidence.''
---------------------------------------------------------------------------
\9\ Telebrands Corp. v. FTC, 457 F.3d, 354, 357 n.5 (4th Cir.
2006).
Question 5c. How does the FTC determine the scope of products and
claims to which the ``two adequate and well-controlled human clinical
study'' requirement should apply?
Answer. The Commission carefully considers the nature of the
particular claims alleged to be deceptive in the Commission's complaint
and tailors the order, including the remedy or relief, such as a two-
study requirement, to ensure that the order is reasonably related to
the conduct giving rise to the violation and that it is consistent with
specific facts of the case and the level of evidence that experts in
the field would consider reasonable and appropriate for the particular
claims and products covered by the order.
Question 6. Your statement to the Committee that multiple studies
are needed ``given the level of fraud that we have seen in this area,''
appears to justify the Commission's application of heightened
substantiation requirements on grounds that weight-loss-related fraud
is particularly high; however, health care claims (which include, inter
alia, weight-loss scams) rank relatively low among the types of
complaints received by the FTC, falling outside the top-ten consumer
complaints and comprise about two percent of total complaints received,
according to the most-recent Consumer Sentinel Network Data Book.
Because weight-loss claims are reported as a subset of the complaint
category, it would appear weight-loss claims on their own rank even
lower. Is it the practice of the Commission to impose heightened
requirements in accordance with the level of fraud in a particular
area?
Answer. My statement about the ``level of fraud that we have seen
in this area'' as a factor in determining the appropriate level of
substantiation was a reference to my written testimony about the
instances of outright fraud that the FTC staff has uncovered in the
course of our investigations of weight loss marketing by companies now
under order.\10\ I indicated that the Commission has found troubling
practices in more than one weight loss case where the company's
proprietary studies contained erroneous or fabricated data. In the
Sensa case, for example, we discovered that the trials included
duplicate subjects and that researchers sent weight loss results to the
defendants before the test subjects had been weighed. In the Skechers
case, subjects who gained weight were reported as having lost weight.
That type of fraudulent conduct clearly underscores the need for
replication or verification of study results in the orders the FTC
seeks against those companies.\11\
---------------------------------------------------------------------------
\10\ See Hearing Transcript at 73.
\11\ See Prepared Statement of the Federal Trade Commission (June
17, 2014) at 6-7.
---------------------------------------------------------------------------
With respect to the overall prevalence of weight loss fraud in the
U.S. marketplace, the Consumer Sentinel data reflects the types of
complaints that consumers are most likely to report to law enforcement
authorities. That data does not necessarily provide a representative
picture of the prevalence of all forms of consumer fraud. A more
accurate and comprehensive picture comes from the FTC's 2011 survey, in
which Bureau of Economics staff commissioned a large, nationally
representative survey of U.S. consumers on 17 specific categories of
fraud. As I noted in my written testimony, that survey revealed that
more consumers were victims of fraudulent weight-loss products than of
any of the other 16 fraud categories surveyed. In fact, the estimated
number of consumers who were victims of weight loss fraud--5.1
million--was more than double the number of victims in any other
category.\12\
---------------------------------------------------------------------------
\12\ FTC Staff Report, Consumer Fraud in the United States, 2011:
The Third FTC Survey (2013), at 17, available at http://www.ftc.gov/
sites/default/files/documents/reports/consumer-fraud-united-states-
2011-third-ftc-sruvey/13041fraudseurvey_0.pdf
Question 7. The FTC's recent enforcement actions, both with respect
to weight-loss claims and other health claims, are being closely
watched by marketers and advertisers. The Commission now includes as
standard language in its consent decrees the requirement that
``competent and reliable scientific evidence'' consist of ``at least
two adequate and well-controlled human clinical studies. . .conducted
by different researchers, independently of each other, that conform to
acceptable designs and protocols and whose results, when considered in
light of the entire body of relevant and reliable scientific evidence,
are sufficient to substantiate that the representation is true.'' How
are other companies looking at these consent orders supposed to
interpret what level of substantiation is now required of them?
Answer. The FTC's use of the two well-controlled study requirement
as a remedial matter governing specific types of claims in specific
orders does not represent a change in the FTC's substantiation policy
and does not necessarily apply to other advertisers. The Commission has
made that point clear in the analyses to aid public comment
accompanying its administrative consents.\13\ Those analyses are
published in the Federal Register with links provided in news releases
on the FTC website. Moreover, those closely watching FTC's recent
enforcement actions will be aware that the agency's orders concerning
different types of health claims have variously required two well-
controlled studies, one well-controlled study, or more generally,
``competent and reliable scientific evidence,'' depending on the
particular claims and products at issue.
---------------------------------------------------------------------------
\13\ See, e.g., GeneLink, Inc.; foru Int'l Corp.; Analysis of
Proposed Consent Orders to Aid Public Comment, 79 Fed. Reg. 2662, 2664
(Jan. 15, 2014). The analysis specifically states that the
substantiation standard set out in Part I of the order, covering
disease claims and requiring two well-controlled human clinical
studies, ``does not necessarily apply to firms not under order.'' In
fact, that two-study standard does not even apply to all health-related
claims made by GeneLink. Part II of the order in that matter sets out a
standard of ``competent and reliable scientific evidence'' for non-
disease health benefit, performance, and efficacy claims.
---------------------------------------------------------------------------
In addition, the relevance of specific remedial order provisions to
other companies has been the topic of public statements issued by the
Commissioners. In the recent GeneLink case, for example, Chairwoman
Ramirez and Commissioner Brill, responding to concerns expressed by
Commissioner Ohlhausen that advertisers might misinterpret the order's
substantiation provisions, clearly stated that ``[t]here is nothing in
our action today that amounts to the imposition of a ``de facto two-RCT
standard on health-and disease-related claims.'' The statement goes on
to clarify that the proper level of substantiation is a case-specific
factual determination.\14\
---------------------------------------------------------------------------
\14\ Statement of Chairwoman Edith Ramirez and Commissioner Julie
Brill: In the Matter of GeneLink, Inc. and foru Int'l Corp. (Jan. 7,
2014) at 2, available at http://www.ftc.gov/public-statements/2014/01/
statement-chairwoman-edith-ramirez-commissioner-julie-brill.
Question 7a. Is it reasonable for a company, not yet subject to a
consent order, to assume that weight loss or other health claim
substantiation that does not include two independent studies will be
viewed by the Commission as inadequate?
Answer. Companies looking at the FTC case law and guidance
documents, including the Dietary Supplements Advertising Guide, should
understand that the Commission's substantiation standard for health-
related claims of any kind is intended to be both a rigorous and a
flexible standard governed by the specifics of each case. As noted in
earlier responses, the Commission evaluates each individual case on its
merits, conducting an analysis of Pfizer factors, consulting with
experts in the relevant field, and examining the studies upon which a
company relies in the context of all of the relevant surrounding
literature. In certain situations one high-quality study will suffice
to support a claim, in other situations a body of epidemiologic
evidence will suffice, and in other situations two or even more studies
may be necessary, especially where there are studies with conflicting
results. The Dietary Supplement Advertising Guide provides detailed
explanations and illustrative examples of the many factors that govern
the level of evidence needed to substantiate health-related claims.
Question 7b. How will the Commission ensure that its application of
this standard does not have a chilling effect on other firms with
regard to otherwise truthful and substantiated claims?
Answer. The Commission ensures that firms understand its flexible
but rigorous approach to substantiation of weight loss and other
health-related claims by issuing guidance to industry in various forms,
providing analysis of its specific orders, and engaging in other
industry outreach, such as presentations on advertising substantiation
at industry meetings. In addition, while the FTC cannot formally
evaluate and pre-approve advertising claims, the agency's staff are
available to respond to questions and provide general informal advice
about the appropriate level of substantiation for claims.