Consumer Health Digest #14-18

Your Weekly Update of News and Reviews
May 18, 2014

Consumer Health Digest is a free weekly e-mail newsletter edited by Stephen Barrett, M.D., with help from William M. London, Ed.D., M.P.H. 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.

FTC settlement bans MLM operators. The operators of Kentucky-based Fortune Hi-Tech Marketing (FHTM) have been banned from multi-level marketing under a settlement with the Federal Trade Commission and the states of Illinois, Kentucky, and North Carolina. The settlement agreement and order also requires the surrender of assets totaling at least $7.75 million for restitution to consumers. FHTM marketed high-speed Internet service, home telephone service, auto clubs, travel clubs, cell phone plans, home security systems, beauty care products, and various dietary supplements. In 2013, Thomas A. Mills, Fortune Hi-Tech Marketing Inc., FHTM Inc., Alan Clark Holdings LLC, FHTM Canada Inc., and Fortune Network Marketing (UK) Limited were charged with operating a pyramid scheme and the court ordered them to stop their deceptive practices, froze their assets, and appointed a receiver over the assets pending a trial. The receiver subsequently concluded that (a) more than 98% of participants lost more money than they ever made, (b) at least 88% did not even recoup their enrollment fees, and (c) more than 81% of the payments to participants were based on recruiting new members and not for the sale of products or services. Bill Ackman and other critics of Herbalife have charged that it is organized similarly to FHTM. [Quoth the Raven. Herbalife: A precedent has been set, now shut it down. Seeking Alpha, May 14, 2014]

British regulators nix several health claims for vitamins. The British Advertising Standards Authority (ASA) has ruled GlaxoSmithKline UK Ltd. improperly suggested that the vitamin A in its Ribena Plus vitamin drink would "help keep your vision in tip-top condition" and that the vitamin A and C content was important for immunity. [ASA Adjudication on GlaxoSmithKline UK Ltd. May 7, 2014] The company argued that claims like these were authorized by the European Union's Register of Nutrition and Health Claims, which generally permits statements about the contribution of nutrients to body functions. However, the ASA concluded that GlaxoSmithKline went too far by suggesting that Rabina would optimize eye function and improve immunity. The ASA's action is noteworthy because regulatory agencies in the United States and Canada routinely ignore such claims even though they are rampant. During the time ASA was investigating, ownership of the Ribena name and product was transferred to Lucozade Ribena Suntory Ltd.

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This page was revised on May 19, 2014.