Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC alleges diet product marketer made false weight loss claims, (Oct 30, 2013)

An Arizona individual and his companies falsely represented that their products would cause consumers to lose substantial amounts of weight, the FTC has alleged in a complaint filed today in federal court in Arizona (FTC v. Wright, FTC File No. 122 3193).

According to the complaint, Kevin Wright and his companies, HCG Platinum, LLC and Right Way Nutrition, LLC, marketed their HCG Platinum liquid drops as causing rapid and substantial weight loss. The products contain the ingredient human chorionic gonadotropin (HCG), a hormone produced by the human placenta that the FTC asserts has been falsely advertised for decades as causing weight loss.

The defendants allegedly directed consumers to place doses of the HCG products under their tongues before meals and to follow a diet restricting them to 500 to 800 calories per day. The defendants allegedly claimed that use of the HCG products would likely cause consumers to lose as much weight as endorsers pictured in their advertisements, and charged between $60 and $149 for a 30-day supply of one of three formulations of the products. The products were labeled as “homeopathic,” meaning they were diluted to the point that the listed ingredients were undetectable, and their advertising claimed the products could cause consumers to lose a pound a day, were safe to use, and were clinically proven to burn fat, reduce weight, and lower cholesterol. The complaint asserts that sales of HCG Platinum have exceeded $13 million since 2010.

In November 2011, the FTC and the Food and Drug Administration sent joint warning letters to the defendants and six other marketers of HCG supplements, informing them that their HCG products were considered mislabeled drugs, and warning them that it was unlawful to make weight-loss claims without support from competent and reliable scientific evidence.

The complaint asserts that the defendants made false and unsubstantiated claims in violation of the FTC Act, including claims that (1) “HCG Platinum causes, or assists in causing, rapid weight loss, including one to two pounds per day for multiple weeks”; (2) “HCG Platinum causes, or assists in causing, users to lose substantial amounts of weight, including as much as 127 pounds”; (3) “Consumers who use HCG Platinum are likely to obtain the rapid and substantial weight loss reported by consumers who appear in Defendants’ advertisements”; (4) “The HCG Platinum weight loss program is safe”; and (5) “HCG Platinum is clinically proven to burn fat, reduce weight, and lower cholesterol.”

The FTC’s complaint also names seven relief defendants who received money from sales of HCG supplements, but did not play an active role in the alleged deception of consumers, including Weekes Holdings, LLC; Primary Colors, LLC; KMATT Holdings, LLC; Nutrisport Holdings, LLC; Ty D. Mattingly; Julie Mattingly; and Annette Wright.

The complaint seeks a permanent injunction against future violations of the FTC Act; redress for consumers, including rescission or reformation of contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies; an order requiring the relief defendants to disgorge all funds and assets, or the value of the benefit they received from the funds and assets, which are traceable to the defendants’ deceptive and unlawful acts or practices; and an award to the FTC of the costs of bringing its action.

Companies: HCG Platinum, LLC; Right Way Nutrition, LLC; Weekes Holdings, LLC; Primary Colors, LLC; KMATT Holdings, LLC; Nutrisport Holdings, LLC

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