News from the Federal Trade Commission - September 2012

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Penn Corner September 2012

Your Baby Can’t Read

smart baby
The FTC has filed false advertising charges against the marketers of Your Baby Can Read!, a program that allegedly claimed it could teach kids as young as nine months how to read, and said it had the scientific studies to back it up. According to the FTC, it didn’t. The program, which uses a combination of videos, flash cards, and pop-up books, was advertised online and on television stations including Discovery Kids and Nickelodeon. In one half-hour infomercial, a home video shows a two-year-old supposedly reading Charlotte’s Web, and her mom claiming she read her first Harry Potter book at three. The kits cost about $200 and took in more than $185 million, the FTC says.

Abs-olutely Unproven

Marketers behind the Ab Circle Pro, an abdominal exercise device, will pay $15 to $25 million in refunds to settle FTC charges that they falsely claimed people using it just three minutes a day would lose 10 pounds in two weeks. According to the FTC, the defendants’ ads said a three-minute workout on the Ab Circle Pro was the same as doing 100 sit ups, and pitchwoman Jennifer Nicole Lee compared brief use of the Ab Circle Pro to a 30-minute workout. The infomercial also featured testimonials from people claiming they lost up to 60 pounds. But just three minutes a day of exercise won’t make you thin, the FTC says. People who bought the Ab Circle Pro can file a refund claim at

The Dish on Unwanted Calls

The FTC is suing DISH Network for allegedly pitching its satellite TV program to millions of people who had told the company not to call. According the FTC’s Telemarketing Sales Rule, even if a person isn’t on the National Do Not Call Registry, a telemarketer can’t call someone who’s asked to be placed on the company’s own do-not-call list. The calls were made by DISH Network directly and through authorized dealers. Meanwhile, the Department of Justice, working on behalf of the FTC, has another case against DISH Network for allegedly calling people on the National Do Not Call Registry. For more on your rights, read Q&A: The National Do Not Call Registry.

The Room is Bugged

Deceptive advertising charges have been filed against marketers for Best Yet! and Rest Easy. The FTC has alleged that they failed to back up claims that their products could prevent and eliminate bed bug infestations with natural ingredients like cedar oil and cinnamon. In addition to being sold directly to consumers and to hotels, Best Yet! also was sold to schools as a way to treat head lice. Claims like these need to be backed by competent and reliable scientific evidence, the FTC says. Bed bug infestations are difficult to control, and no one treatment or technique has been found to be effective in all cases. For more, read Good Night, Sleep Tight, and Don’t Let the Bed Bugs Bite . . . Your Wallet.

Stemming Drug Shortages

empty pill bottle
With an unprecedented increase in shortages of critically important medications, FTC staff have advised the Generic Pharmaceutical Association that the agency won’t challenge an initiative designed to help the FDA respond to the shortages. The proposed program, which includes an agreement among drug makers to collect information about shortage drugs, could help FDA staff accelerate the recovery of critical drugs in short supply. According to FTC staff, safeguards like independent third party data collection and limits on sharing the data with manufacturers make it unlikely that the proposed program will harm competition.

"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. Weight loss is hard work, and telling consumers otherwise is deceptive."

David Vladeck, Director, Bureau of Consumer Protection

Claims Didn’t Carry Much Weight

A subsidiary of Medifast Inc., a diet plan marketer, will pay a $3.7 million penalty to settle FTC charges it violated a previous FTC order by making unsupported weight loss claims. Jason Pharmaceuticals, which sells Medifast-brand low-calorie meal substitutes, allegedly claimed that people using Medifast products would lose two to five pounds a week, and falsely represented that the experiences of people endorsing the products were typical.

Get-Rich Scams Out $478 Million

At the FTC's request, a U.S. court has ordered a record $478 million judgment against the marketers of three get-rich-quick infomercial scams, including John Beck's Free & Clear Real Estate System, for deceiving nearly a million people with phony claims that they could make money using their programs. Almost everyone who paid $39.95 for the systems, or later paid $14,995 for personal coaching services, lost money.

Money Back

Google Money Tree: The FTC is returning more than $2 million in 93,086 checks to buyers of this work-at-home scam, which charged hidden fees to people’s credit cards and bank accounts and falsely claimed it was connected to Google Inc.

Federal Job Scam: About 2,000 people falsely promised federal jobs if they paid for study materials or counseling will recover about 20 percent of the money they lost to the scam. 

Phony Supplements: People who bought phony supplements for weight loss or to treat erectile dysfunction will be getting checks for $40.45 each. With 153,109 checks in the mail, that’s more than $6 million in refunds.

Interest Rate Reduction Robocalls: The FTC is sending 4,500 checks to victims of a telemarketer who used robocalls to pitch worthless credit card rate reduction programs for an up-front fee. Checks will range from $31 to $1,300, depending on the loss.

Deceptive Drug Prices: Nearly 13,000 people who paid significantly more for their drugs than they expected based on allegedly deceptive pricing claims made by CVS Caremark will receive a refund for the amount they overpaid.


                More >


  • It’s hurricane season. Be prepared for charity and home repair scams, which inevitably follow weather disasters:
  • In the mobile app business? The FTC tells how you can make sure your app does what you claim, and build privacy into its design:


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