Consumer Health Digest #05-31

Your Weekly Update of News and Reviews
August 2, 2005

Consumer Health Digest is a free weekly e-mail newsletter edited by Stephen Barrett, M.D., and cosponsored by NCAHF and Quackwatch. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making.

Atkins Nutritionals files for bankruptcy. Atkins Nutritionals Inc., which markets dietary supplements, publications, and "low-carbohydrate" (high-fat) foods and condiments, has filed for Chapter 11 bankruptcy protection, listing assets of $301 million and liabilities of $325 million. The late Robert C. Atkins, M.D., founded the company in 1989 to market his dietary supplement formulas. Parthenon Capital LLC acquired a majority stake in 2003, about six months after Atkins died. Press reports attribute the company's financial trouble to reduced public interest in low-carbohydrate dieting plus competition from mainstream food companies that marketed competing products. NPD FoodWorld has reported that the number of American adults engaged in a low-carb diet dropped from a peak of 9.1% on on February 4, 2004 to 2.2% on July 6, 2005. Atkins Nutritionals says it will continue day-to-day operations as usual but sell fewer types of products.

New Zealand court fines "water treatment" scammers. The Hamilton District Court has ordered Ecoworld NZ Ltd to pay a fine of NZ$60,000 for making misleading claims for water treatment devices. The court also ordered the company to pay the Commerce Commission more than $8000 for costs and to repay $68,000 to consumers who purchased the product between March 2000 and March 2003. Ecoworld sold the “Grander Living Water Units” for between $1,500 and $12,000. The units contain no mechanism or filter to treat water but allegedly contained a sealed section that contained “living water,” which the sellers said comes from glacial melts in Austria’s Tyrolean mountains. Ecoworld claimed that any water brought into contact or close proximity with this “living water” would enable the body to detoxify; improve circulation and blood pressure levels; reduce skin and allergy disorders; and improve animals' health and temperament; lower the surface tension of water; improve pH levels; and reduce harmful bacteria. However, tests conducted by the Commerce Commission found no measurable differences between water that had passed through the system and untreated water. Judge Merilena Burnett said promotional material for the Living Water units “contained inconsistencies, quackery and pseudo-science.” [Living Water quackery results in $136,000 payout. New Zealand Commerce Commission news release, July 26, 2005]

Four years ago, the Consumers Institute of New Zealand asked a prominent laboratory to compare water treated by the Living Water system with untreated water. The lab found no measurable difference between the two in surface tension, boiling and freezing point, temperature loss, pH, hardness and conductivity, or chlorine content (to see if Living Water would improve the taste of chlorinated water). The lab also put bacteria-contaminated water through the Living Water treatment and compared it with an untreated sample. A plate count, the standard method of assessing microbiological safety, showed no difference in levels of living bacteria. The Institute then warned against using the system to make water safe. [Living water. Consumer online, Aug 7, 2001] [ Quackery and pseudo-science. Consumer Online, July 27, 2005]

Grander Technology products are manufactured by INNUTEC, an Austrian company owned by Johann Grander, who discovered the alleged "Grander effect." The company's Web site includes claims that Grander devices "revitalize" water and that (b) filling a pendant with "Grander Information Water transmits the forces of nature and has a harmonizing effect on the body mind and soul."

Criminal charges filed against Canadians who operated quack cancer clinics. Canada's Competition Bureau has filed criminal charges against Michael Reynolds of Toronto, Ont., and John Armstrong of Penticton, B.C., for making false or misleading claims regarding the efficacy of their alleged cancer treatment. The principals of the now defunct CSCT Inc., operating out of Kitchener, Ont., and Penticton, B.C., claimed that their treatment, called Cell Specific Cancer Therapy or Zoetron Therapy, used low-level magnetic forces to selectively kill cancer cells without harming healthy cells. The Bureau has charged that the accused preyed upon cancer victims and/or their families by making unsubstantiated representations on their Web site, at seminars, and in alternative health care magazine articles and advertisements, direct mailings, and telephone communications. Reynolds and Armstrong operated their outpatient clinics in Santo Domingo, Dominican Republic; Tijuana, Mexico; Lausanne, Switzerland; and Mijas Costa, Spain, at various times from August 1996 to February 2003. The accused claim to have treated over 850 people worldwide, while charging as much as US$15,000 to $20,000 per person. Reynolds and Armstrong have each been charged with 10 counts under the Competition Act for knowingly or recklessly making representations to the public that were false or misleading and one count under the Criminal Code of Canada for defrauding the public of money exceeding $5,000. In February 2003, the Bureau executed search warrants in Ontario and British Columbia; the FTC filed a Temporary Restraining Order with the U.S. District Court for the Northern District of Illinois, suspending CSCT’s domain name; and the Federal Commission of Health in Mexico closed the one remaining clinic in Tijuana, Mexico. These enforcement actions effectively shut down the operation. Quackwatch has a report on CSCT's former activities.

Charges filed against Canadian weight-loss clinics. The Canadian Competition Bureau has charged five companies and their president, Sylvain LeBlanc, with making misleading claims about certain products. The companies operate five Centre de Santé Minceur weight-loss clinics in Quebec. The challenged claims are:

The Bureau has asked the Competition Tribunal to order the defendants to stop the claims, publish a corrective notice, and pay a penalty.

Court curbs nonaccredited Hawaiian school. A Hawaiian Circuit Court has ordered American University of Hawaii and its owner Hassan H. Safavi (aka Henry Safavi) to stop enrolling candidates, issuing medical and law "degrees," and representing that the State of Hawaii licenses, approves, or regulates its operations. [American University of Hawaii ordered to stop violating Hawaii laws. Casewatch, Aug 3, 2005] The court also ordered a $500,000 civil penalty and restitution to anyone who enrolled or received a degree after July 1, 1999. The school's Web site admits that the school is not accredited by a recognized agency in the United States, but the home page also says:

Due to ongoing legal processes the Branch in the State of Hawaii has temporarily ceased to operate, and this will affect those affiliates of the University that were operating under that Branch until such time that the problem is resolved through the appropriate courts of law. Other affiliates not under that Branch are not affected and will continue their operation as usual under the direction of the Head Office in the State of Mississippi.

Canadian scammers banned from telemarketing. Canadian telemarketers who tricked consumers into revealing bank account information and debited hundreds of dollars from their accounts have been permanently banned from engaging in telemarketing in the future under a settlement with the Federal Trade Commission. In November 2004, the FTC charged three Ontario, Canada-based companies and their principals with violating federal laws by masquerading as Social Security or Medicare representatives and claiming that, due to a Social Security Administration computer failure, the consumers’ personal information had been erased from the system. The defendants told consumers that they had to provide their bank account and routing numbers to fix the problem. Consumers who were reluctant were told that they risked losing their Social Security payments. The defendants also promised enroll to enroll the consumers in a new Medicare insurance program that would give them discounts on medications and eyeglasses. According to the FTC, the defendants debited consumers’ accounts $299 each for their “enrollment” but the consumers received nothing in return. The settlement permanently bans Xtel Marketing, Navin Baboolal, and Annilla Ramkissoon, doing business as Millenium Consulting and Med Supply, from telemarketing, helping others to telemarket, making deceptive claims, fraudulently obtaining account information, or using or selling fraudulently obtained financial information. In addition, accounts with companies that processed the defendants’ debits will be turned over to the FTC for consumer redress. [Canadian scammers permanently banned from telemarketing. FTC news release, Aug 2, 2005]

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This page was revised on August 4, 2005.