FFOR RELEASE: AUGUST 6, 1997
NU SKIN TO PAY $1.5
MILLION PENALTY
TO RESOLVE FTC CHARGES
OVER FAT-LOSS CLAIMS FOR
SUPPLEMENTS
Nu Skin International, Inc., the firm behind an international multi-level
marketing system with thousands of distributors selling skin care products and
nutritional supplements, has agreed to pay a $1.5 million civil penalty to
settle Federal Trade Commission charges over the fat-loss, muscle-maintenance
and other claims it made for supplements containing chromium picolinate and
L-carnitine. The FTC alleged that Nu Skin could not produce adequate
substantiation for the claims, and that Nu Skin therefore violated a 1994 FTC
order requiring the firm to have competent and reliable scientific evidence to
support benefits claims for any product they sell. The FTC said this is the
third time in three years that a firm has paid a civil penalty exceeding $1
million to settle charges of alleged violations of a prior Commission order.
The claims at issue in this case were for "Metabotrim," "OverDrive,"
"GlycoBar," "Appeal Lite," and "Breakbar." In addition to the civil penalty
included in the settlement announced today, Nu Skin has agreed to abide by the
1994 order in the future.
Unsubstantiated claims for products containing chromium picolinate, one of
the hottest dietary supplements on the market, and L-carnitine have been the
subject of several recent FTC cases, including one against the sole supplier of
chromium picolinate in the United States. Nu Skin entered into the 1994 consent
order with the FTC to resolve charges, among others, that the firm made false
and unsubstantiated claims for three unrelated products -- a baldness treatment,
a wrinkle lotion, and a burn cream. Nu Skin's net worth exceeds $100 million,
according to public reports.
In the current case, the FTC's complaint detailing the charges cites numerous
statements regarding the five products containing chromium picolinate and
L-Carnitine, such as:
- "This supplement contains chromium picolinate, which has been found to help
promote the use of carbohydrates for energy, instead of storing them as fat.
Metabotrim also contains L-Carnitine, a supplement that encourages fat
utilization for energy.";
- "GlycoBar contains both chromium picolinate and chromium chelate, believed
to be essential for effective function of insulin, which regulates blood glucose
levels and creates a muscle building effect by assimilating amino acids into
proteins."; and
- "The ingredients in Metabotrim have been scientifically shown to establish
and maintain proper metabolic rates assisting the body in burning fat while
preserving lean muscle mass!"
The FTC challenged as unsubstantiated, and therefore violative of the 1994
consent order, the resulting implied and direct claims about the ability of
these products to reduce fat, increase metabolism, and preserve or build muscle.
Today's settlement, if approved by the court, would require Nu Skin to make the
$1.5 million payment within 10 days, permanently enjoin the firm from further
violating the 1994 consent order, and impose various record keeping and
reporting requirements on the firm that are designed to assist the FTC in
monitoring compliance.
The complaint and proposed consent decree were filed this morning by the
Department of Justice at the request of the FTC in U.S. District Court for the
District of Utah, Central Division. The Commission vote to authorize filing was
5-0.
NOTE: A consent decree is for settlement purposes only and
does not constitute an admission by the defendant of a law violation. Consent
decrees have the force of law when signed by the judge.
Copies of the complaint, proposed consent
decree, and documents
associated with the earlier case against Nu Skin are available from the FTC's
web site at http://www.ftc.gov and its Public Reference Branch, Room
130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580;
202-326-2222; TTY for the hearing impaired 202-326-2502. To find out the latest
news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
MEDIA CONTACT:
Bonnie Jansen or Victoria Streitfeld
Office of Public
Affairs
202-326-2161 or 202-326-2180
STAFF CONTACT:
Bureau of Consumer Protection
Elaine D. Kolish,
202-326-3042
Robert Frisby, 202-326-2098
(FTC Docket No. C-3489)
(Civil
Action No. 2:97-CV-0626G)
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