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Infomercial Marketers to Pay Millions to Settle FTC Charges

8/23/2012 10:22 AM Eastern

The Federal Trade Commission said Thursday that the marketers of abdominal exerciser Ab Circle Pro have agreed to pay between $15 million and $25 million to settle for false and deceptive ad claims for their product, the largest settlement for an exercise device claim outside of shoes. The FTC settled with Skechers in May for $40 million over toning shoe claims.

The commission cited over 10,000 informecials for the product that aired between 2009 and 2010, and advised cable operators and others who ran the ads to do a better job of screening ads. "We would encourage those entites to be more vigilant in deciding which ads to run or not to run in looking behind these sorts of claims, "said Mary Engle, associate director for advertising practices.

The FCC several years ago issued a "red flag" advisory to media outlets for deceptive claims to watch out for and encouraged them to do more due dilligence.

The FTC is particularly focused on unsupported health claims, including fitness equipment, diets and supplements, as threats to public health and safety.

The FTC said the Ab Circle Pro defendants have agreed to the consumer refunds after claiming that using the device for only three minutes a day would shave off 10 pounds in two weeks and had resulted in an 80-pound weight loss for spokeswoman Jennifer Nicole Lee, claims the FTC said could not be supported.

The ads claimed a three-minute workout with the device, which consisted of a fiberglass disk with handlebars and knee rests, was equivalent to doing 100 sit-ups. It sold for $200-$250.

"The FTC reminds marketers that they should think twice before promising a silver-bullet solution to a health problem -- whether it involves losing weight or curing cancer," said David Vladeck, director of the FTC's Bureau of Consumer Protection. "Weight loss is hard work, and telling consumers otherwise is deceptive."

The FTC said the infomercial aired more than 10,000 times between March 2009 and May 2010.

The complaint was lodged against Fitness Brands, Inc., Fitness Brands International, Inc. and the two individuals who control them, Michael Casey and David Brodess; Direct Holdings Americas, Inc. and Direct Entertainment Media Group, Inc. (subsidiaries of Readers Digest Association, which was named in the suit as well); infomercial producer Tara Borakos, her companies Tara Productions Inc. and New U, Inc.; and product spokeswoman Jennifer Nicole Lee and her companies JNL, Inc. and JNL Worldwide, Inc.

With the exception of Lee, those defendants are now prohibited from making various specific weight lost claims about Ab Circle Pro or similar devices, or any weight-loss claims for exercise equipment without "competent and reliable scientific evidence."

The FTC vote to approve the settlement was 5-0.

 

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April