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Senior Alert
Seniors Be Wary of Free Product Offers Asking Them
to Pay Shipping
FTC charges dietary supplement marketers for
continued billing credit cards
Feb. 3, 2006 – There is a warning for senior
citizens in new charges by the Federal Trade Commission against
marketers selling dietary supplements. Seniors should be wary of
advertising that offers any product free, if you just pay the low
shipping cost with your credit card. Some of these offers may be
legitimate, but the FTC has found at least one abuse.
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According to the FTC complaint, the defendants have
been offering consumers “free” samples of their dietary supplements, and
then enrolling them in a program that automatically shipped them more
pills and billed them for those shipments, even though most consumers
never agreed to participate in the program.
The FTC also charged that two of the products,
which were marketed as treatments for female sexual dysfunction (Avlimil)
and night vision problems (Rogisen), do not live up to the advertising
claims.
The defendants, Steve Warshak and his companies,
have marketed and sold more than a dozen dietary supplements – including
Avlimil, Rogisen, and Enzyte – that they claimed offered a variety of
health benefits, including treating male and female sexual dysfunction,
improving sleep, fighting fatigue, aiding weight loss, and improving
skin, night vision, and heart health, among other benefits.
They offered
“free” samples through radio, television, and print ads and through the
Internet, inviting consumers to contact them. The ads have run on cable
television networks, including ESPN, Comedy Central, Oxygen, Soap Net,
and Lifetime, and in magazines such as Forbes, Playboy, Cosmopolitan,
Oprah, Better Homes and Gardens, Psychology Today, and Redbook.
The FTC charged that after consumers provided
credit or debit card information to pay the $4.50 shipping and handling
fee for the “free” samples, the defendants used that information to bill
the consumers for future shipments that they sent automatically.
The
defendants enrolled consumers in the continuity program and
automatically billed them on a recurring basis without obtaining the
consumers’ express, informed consent and without disclosing the terms
and conditions of the plan, according to the FTC complaint. In addition,
they did not obtain written authorization for recurring debits.
Then,
the defendants often made the process to cancel the shipments very
difficult. Consumers attempting to cancel often encountered busy
telephone lines, Web sites that did not work, and were put on hold
indefinitely. Many consumers who were able to reach a company
representative were nevertheless denied refunds.
For one of their dietary supplements, Avlimil, the
FTC charged that the defendants made false and unsubstantiated claims.
Avlimil was advertised to treat female sexual dysfunction and provide
female sexual enhancement. In their advertising, the defendants cited a
clinical study that allegedly proved Alvlimil was safe and effective. In
fact, according to the complaint, Avlimil’s ingredients differ
substantially from the ingredients in the product actually tested in the
clinical study featured in the Avlimil advertisements, and defendants
made unsubstantiated claims about the product’s efficacy.
The FTC also
charged that the defendants made unsubstantiated claims that another
dietary supplement, Rogisen, improves night vision.
The complaint names Steve Warshak, Berkeley Premium
Nutraceuticals, Inc., LifeKey, Inc., Warner Health Care, Inc., and
Wagner Nutraceuticals, Inc. as defendants. The complaint also names
Carri Warshak, Harriet Warshak, and Paul Kellogg as relief defendants –
individuals who are not accused of wrongdoing, but have allegedly
received ill-gotten gains and do not have a legitimate claim to them.
The Commission vote authorizing the staff to file
the complaint was 4-0. The complaint was filed on January 30, 2006, in
the U.S. District Court for the Southern District of Ohio.
NOTE: The Commission files a complaint when it has
“reason to believe” that the law has been or is being violated, and it
appears to the Commission that a proceeding is in the public interest.
The complaint is not a finding or ruling that the defendants have
actually violated the law. The case will be decided by the court.
Copies of the complaints are available from the
FTC’s Web site at
http://www.ftc.gov and also from the FTC’s Consumer Response Center,
Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC
works for the consumer to prevent fraudulent, deceptive, and unfair
business practices in the marketplace and to provide information to help
consumers spot, stop, and avoid them.
To file a complaint in English or Spanish
(bilingual counselors are available to take complaints), or to get free
information on any of 150 consumer topics, call toll-free,
1-877-FTC-HELP (1-877-382-4357), or use the complaint form at
http://www.ftc.gov. The FTC enters Internet, telemarketing, identity
theft, and other fraud-related complaints into Consumer Sentinel, a
secure, online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad.
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