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FTC Issues 2007 Report to Congress on Ethanol Market Concentration; FTC Staff Issues Summary of Comments on Private-sector Use of Social Security Numbers

Issuance of Commission report: The Commission has issued a study, “2007 Report on Ethanol Market Concentration,” its third annual report on the state of ethanol production in the United States, as required by the Energy Policy Act of 2005. On the assumption that U.S. fuel ethanol is a relevant market, the report concludes that the market, when measured on the basis of production or capacity, is unconcentrated and has become even more unconcentrated over the past year.

As of September 2007, 103 firms produced ethanol in the United States, a one-year increase of 13 firms, and a two-year increase of roughly 28 firms. The largest ethanol producer’s share of capacity has continued to fall each year as new firms enter the market. Currently, the largest producer accounts for approximately 16 percent of domestic ethanol capacity, down from 21 percent in 2006, 26 percent in 2005, and 41 percent in 2000.

As in the previous reports, FTC staff used three different methods of calculating the concentration of the ethanol production industry. Specifically, staff calculated concentration based on the production capacity of each individual producer and on the production capacity of each producer when attributing each producer’s capacity to the firm responsible for marketing the producer’s ethanol. Staff then confirmed these results using the actual production rather than capacity. The study concludes that the level of concentration in ethanol production would not justify a presumption that a single firm, or a small group of firms, could wield sufficient market power to set or coordinate price or output levels. According to the staff, however, the results cannot preclude the possibility that future mergers within the industry may raise competitive concerns.

The study, which is available on the Commission’s Web site and as a link to this press release, was submitted to Congress and the Administrator of the U.S. Environmental
Protection Agency, as required by Section 1501(a)(2) of the Energy Policy Act of 2005, as codified at 42 U.S.C. § 7545(o)(10). The Commission vote to issue the 2007 study, which was prepared by the staff of the Bureaus of Competition and Economics, was 5-0. (FTC File No. P063000; the staff contact is John H. Seesel, Associate General Counsel for Energy, Office of the General Counsel, 202-326-2702.)

Issuance of summary information on Social Security numbers: The Division of Privacy and Identity Protection of the Commission’s Bureau of Consumer Protection has issued a summary of information it has obtained in preparation for an upcoming FTC workshop on private-sector use of Social Security numbers (SSNs).

The President’s Identity Theft Task Force, comprising 17 federal agencies and co-chaired by the Attorney General and FTC Chairman Deborah Platt Majoras, was formed in May 2006 to develop a comprehensive national strategy to combat identity theft. In April 2007, the Task Force submitted its Strategic Plan and recommendations to the President. One of the recommendations was to develop a comprehensive record of SSN use by the private sector and evaluate the necessity of those uses. The Task Force recognized that “SSNs are an integral part of our financial system,” and that it was important to preserve the beneficial uses of the SSNs to the extent possible. However, it also noted that the “availability of SSNs to identity thieves creates a possibility of harm to consumers.” The Strategic Plan called for Task Force agencies to gather information from stakeholders and make recommendations to the President about specific steps that should be taken to balance those competing considerations.

In July 2007, FTC staff invited interested parties to comment on the issues surrounding private sector usage of SSNs. More than 300 individuals and entities provided comments. The staff summary of the public comments and the information the staff obtained through its interviews can be found at: http://www.ftc.gov/bcp/workshops/ssn/staffsummary.pdf.

The issues will be addressed at an FTC workshop on December 10-11, 2007. More information about the workshop can be found at: http://www.ftc.gov/bcp/workshops/ssn/index.shtml. (The staff contact is Betsy Broder, assistant director, or Pavneet Singh, staff attorney, Division of Privacy and Identity Protection, 202-326-2252.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

FTC Wraps Up Case Against Alleged Bogus Business Opportunity Purveyors

The Federal Trade Commission has wrapped up its case against the purveyors of an envelope stuffing business opportunity by settling charges with the remaining defendants, who falsely promised that consumers would earn a substantial income merely by stuffing envelopes or mailing brochures. These defendants and their spouses will give up all of their frozen assets.

The FTC charged that the defendants falsely claimed that consumers were likely to earn a substantial amount of money, such as $600 or $2000 per week, by stuffing envelopes or mailing brochures, and that they would not need to sell any products or services to earn it. According to the FTC, however, it was only after consumers invested $60 to $180 that they learned the defendants would pay them only if their mailings resulted in sales (and, even then, consumers never received any income).

The amended complaint named Mark E. Shelton, Wholesale Marketing Group, LLC, Wholesale Marketing Group, Inc., Jeremy Wilson, individually and doing business as Pure Home Air Profits, Robert M. Gomez, Luis D. Aviles, and Carl J. Shelton, Jr., as defendants. In addition, the amended complaint named Marianne Shelton, Julie Shelton, and M. Edward Shelton Hypnotherapy, LLC, as relief defendants. According to the FTC, the relief defendants, while not accused of wrongdoing, received monies to which they were not entitled.

Four of the named defendants, Wholesale Marketing Group, LLC, Wholesale Marketing Group, Inc., Robert M. Gomez, and Luis D. Aviles, settled with the Commission last year. Two additional defendants, Carl J. Shelton, Jr. and Jeremy Wilson, and all three relief defendants are now settling. These defendants will give up all of their frozen assets. In addition, the orders entered against Carl J. Shelton, Jr. and Jeremy Wilson prohibit misrepresentations about any goods or services and include suspended monetary judgments of $1,493,793.69, which would become due if it is found that they misrepresented their financial status. The Court also entered monetary judgments against Julie Shelton for $83,350 and Shelton Hypnotherapy for $16,750. Again, the full judgments would become due if it is found that they misrepresented their financial status. There is no suspended monetary judgment for Marianne Shelton because she is turning over the total amount of the fraudulent funds that she received.

In addition, the FTC also announces that it has dismissed the amended complaint against Mark E. Shelton following a separate Court finding that he was in contempt of a previous order. He is now under a modified court order.

The Commission vote to authorize staff to file the stipulated final orders was 5-0. The stipulated final orders for permanent injunction were filed in the U.S. District Court for the Northern District of Illinois.

NOTE: These stipulated final orders are for settlement purposes only and do not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

FTC Settles Charges Against Barr Laboratories, Protects Consumers from Anticompetitive Agreements in Prescription Drug Market

The Federal Trade Commission announced today that it has agreed to settle its complaint against Barr Laboratories, whose agreement with Warner Chilcott, the Commission alleges, unlawfully delayed entry of Barr’s generic version of Warner Chilcott’s Ovcon birth control pill into the market.

As a result of the settlement, Barr must refrain from entering into anticompetitive supply agreements with branded companies similar to Barr’s agreement with Warner Chilcott regarding Ovcon, refrain from entering other agreements with branded manufacturers that unreasonably restrain competition, and notify the Commission of a broader group of agreements with branded companies that have the potential to harm competition. The terms of the proposed settlement will expire in 10 years.

Entry of the final order against Barr brings to an end the FTC’s prosecution against Warner Chilcott and Barr for conspiring to keep a generic version of Ovcon off the market. According to the FTC’s complaint filed in November 2005, Warner Chilcott paid Barr $20 million in return for Barr’s agreement not to sell a generic version of Ovcon until May 2009. Last year, under threat of a preliminary injunction, Warner Chilcott abandoned the portion of its agreement that kept Barr from marketing a generic version of Ovcon. Shortly afterward, Barr began selling generic Ovcon tablets in the United States. As a result of the FTC’s actions, women taking Ovcon now have the choice to purchase a lower-cost generic version of the product.

The Commission vote approving the proposed settlement and authorizing the staff to file it with the court was 5-0. It was filed on November 9, 2007, in the U.S. District Court for the District of Columbia and was signed by the judge and entered by the court on November 27.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to [email protected], or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.

Agencies to Issue Proposed Rules and Guidelines that Address Accuracy and Integrity of Consumer Report Information and Rules to Allow Direct Disputes

The Federal Trade Commission and the federal financial regulatory agencies (the Agencies) have approved proposed regulations and guidelines to help ensure the accuracy and integrity of information provided to consumer reporting agencies and to allow consumers to directly dispute inaccuracies with financial institutions and other entities that furnish information to consumer reporting agencies. This information is widely used to determine eligibility for credit, employment, insurance, and rental housing.

The proposal would implement section 312 of the Fair and Accurate Credit Transactions Act of 2003, which amends the Fair Credit Reporting Act.

As required by Section 312, the Agencies are proposing guidelines regarding the accuracy and integrity of the information that entities furnish to a consumer reporting agency. The Agencies also are proposing regulations that would require each entity that furnishes information to a consumer reporting agency to establish reasonable policies and procedures for implementing the guidelines.

The proposed rules would allow consumers to dispute inaccuracies about certain information reflected on their consumer reports directly with the furnishers of that information.

The proposed rules and guidelines are attached. The proposal will be published soon in the Federal Register and the comment period will end 60 days thereafter. The Commission vote authorizing the publication of the proposed rules and guidelines and Federal Register notice was 5-0.

Copies of the document mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

Major Online Advertiser Settles FTC Charges. “Free” Gifts Weren’t Free; Settlement Calls for $650,000 Civil Penalty

A large online advertiser that drove traffic to its Web sites using spam e-mails with misleading subject lines has agreed to settle Federal Trade Commission charges that it failed to disclose that consumers have to spend money to receive the so-called “free” gifts it offers. The settlement, filed by the Department of Justice on behalf of the FTC, requires the defendant to disclose the costs and obligations to qualify for the advertised “gifts,” and bars it from sending e-mail that violates the CAN-SPAM Act. The settlement also requires that the company pay $650,000 in civil penalties.

According to the FTC, Adteractive, Inc., doing business as FreeGiftWorld.com and SamplePromotionsGroup.com, used deceptive spam and online advertising to lure consumers to its Web sites. For example, Adteractive used e-mail subject lines such as, “Test and keep this Flat-Screen TV,” “Test it – Keep it – Microsoft Xbox 360,” and “Congratulations! Claim Your Choice of Sony, HP or Gateway Laptop.” Similarly, Adteractive’s banner ads and pop-up ads contained claims such as, “Participate Now and You’ll Receive a FREE SONY PLAYSTATION.”

When consumers arrive at Adteractive’s promotional Web pages, they are led through a series of ads for goods and services from third parties. To “qualify” for their “free gifts,” consumers must first wade through pages of “optional” offers. If they clear this hurdle, they discover that they must “participate in” a series of third-party promotions. Participation in these promotions requires consumers to do such things as purchase products, take out a car loan, subscribe to satellite television service, or apply for multiple credit cards.

The FTC alleges that Adteractive’s failure to disclose material facts – such as the fact that consumers must pay money or provide some other consideration to obtain their “free gift” – is deceptive in violation of the FTC Act. In addition, the agency charged that deceptive subject lines in Adteractive’s spam e-mails violate the federal CAN-SPAM Act.

The settlement requires that Adteractive clearly and conspicuously disclose in its ads and on its promotional Web pages that consumers have to spend money or incur other obligations to qualify for a gift or prize. The settlement also requires the company to provide a list of the obligations a consumer is likely to incur to qualify for their chosen gift – such as applying for credit cards, purchasing products, or obtaining a car loan. In addition, the settlement bars future violations of the CAN-SPAM Act and requires Adteractive to pay a $650,000 civil penalty. Finally, the settlement contains bookkeeping and record-keeping provisions to allow the agency to monitor compliance.

The Commission vote to approve the stipulated final order was 4-1, with Commissioner Jon Leibowitz issuing a separate dissenting statement. In his statement he expressed concern that “the civil penalty that Adteractive must pay is a downward departure from our other CAN-SPAM Act cases and is not adequate to deter violations in the future.” The complaint and stipulated final order for permanent injunction were filed in the U.S. District Court for the Northern District of California.

The proposed stipulated order was filed on November 26, 2007 by the DOJ at the request of the FTC. It is subject to court approval.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

FTC Releases Survey of Identity Theft in the U.S.Study Shows 8.3 Million Victims in 2005

The Federal Trade Commission today released a survey showing that 8.3 million American adults, or 3.7 percent of all American adults, were victims of identity theft in 2005. Of the victims, 3.2 million, or 1.4 percent of all adults, experienced misuse of their existing credit card accounts; 3.3 million, or 1.5 percent, experienced misuse of non-credit card accounts; and 1.8 million victims, or 0.8 percent, found that new accounts were opened or other frauds were committed using their personal identifying information.

“Whether you’re from Malibu or Manhattan, Tacoma or Tallahassee, no one is immune to identity theft,” said Lydia B. Parnes, Director of the FTC’s Bureau of Consumer Protection. “The important thing is that people learn how to deter identity thieves, detect suspicious activity on their financial records, and defend against the crime, should it happen.”

The survey found that the costs associated with identity theft varied widely. The survey first looked at the value of the goods or services that the thieves obtained using the victims’ personal information. In at least half of all incidents, thieves obtained goods or services worth $500 or less. In 10 percent of cases, however, thieves got at least $6,000 worth of goods or services.

The survey also gathered information about victims’ out-of-pocket expenses resulting from the theft of their identities. In more than half of the incidents, victims incurred no out-of-pocket expenses. Some victims, however, incurred substantial out-of-pocket expenses – 10 percent of all victims reported out-of-pocket expenses of $1,200 or more.

In addition, the survey asked victims to estimate the amount of time they spent resolving problems caused by the theft. The median time spent resolving problems by all victims was four hours. Ten percent of victims, however, spent at least 55 hours resolving their problems, and half of those spent at least 130 hours.

The survey found that thieves obtained more goods and services – and victims spent more time and money recovering – in cases where the thief opened new accounts rather than only hijacking existing accounts. Where the theft was limited to the misuse of existing accounts, the median value of goods and services obtained by the thieves was less than $500. Where the thieves opened new accounts or committed other frauds, the median value of goods and services they obtained was $1,350.

Thirty-seven percent of victims reported experiencing problems beyond the time they spent recovering and their out-of-pocket expenses. These problems included being harassed by debt collectors, being denied new credit, being unable to use existing credit cards, being unable to get loans, having their utilities cut off, being subject to a criminal investigation or civil suit, being arrested, and having difficulties obtaining or accessing bank accounts. When thieves opened new accounts and committed other frauds, victims were more than twice as likely to report having one or more of these types of problems than when thieves misused only existing accounts.

Seventeen percent of all ID theft victims said that their personal information was used to open at least one new account. The two most common types of accounts thieves opened were telephone service accounts (including both land-line and wireless phone accounts), reported by eight percent of victims; and credit card accounts, reported by seven percent of victims.

Eighty-five percent of all ID theft victims reported that one or more of their existing accounts had been misused, including credit card, checking, or savings accounts; telephone service accounts; internet payment accounts; e-mail and other internet accounts; and medical insurance accounts.

Twelve percent of victims reported that their information was misused in other ways. Five percent said that their name and/or personal information was given to the police when the thief was stopped or charged with a crime. Three percent of victims said that the thief had obtained medical treatment, services, or supplies using their personal information. One percent reported that a thief misused their personal information to rent housing, obtain government benefits, or get a job.

Approximately 40 percent of victims whose identity theft was limited to the misuse of existing accounts discovered the misuse within one week of when it began. In contrast, nearly one-quarter of victims of new account and other frauds did not find out about the misuse of their information until at least six months after it started. In cases where they discovered the misuse more quickly, victims reported lower out-of-pocket losses and thieves obtained less.

Fifty-six percent of all victims were unable to provide any information on how their personal information was stolen. The 44 percent who did provide such information included 16 percent of all victims who said that their information was stolen by someone they knew personally. Victims who reported a personal relationship with the thief mentioned three types of relationships: six percent of all victims cited family members or relatives as the thief; eight percent cited friends, neighbors, or in-home employees; and two percent cited someone with whom they worked. Because most victims do not know how their information was compromised, these numbers may under-represent the actual percentage of victims who had a personal relationship with the individual who stole their information.

“Consumers have great tools at their disposal in their fight against identity thieves,” Parnes said. “For example, the law gives every consumer the right to get their credit report for free once every 12 months from each of the three national credit reporting companies (see www.annualcreditreport.com) Monitoring your credit report periodically is one valuable way to check for activity that you didn’t authorize. Another tool is www.ftc.gov/idtheft, a Web site chock full of practical information for consumers, businesses entrusted with consumer data, and law enforcers who prosecute the crime.”

The FTC has issued a publication, “To Buy or Not To Buy: Identity Theft Spawns New Products and Services To Help Minimize Risks,” to help consumers evaluate whether they should initiate fraud alerts or credit freezes or invest in identity theft products and services such as credit monitoring that are for sale.

The study was conducted through interviews using a random-digit-dialing sampling methodology. A total of 4,917 telephone interviews were conducted between March 27 and June 11, 2006.

FTC Challenges A&Ps Proposed Acquisition of Pathmark Supermarkets

The Federal Trade Commission today announced a complaint challenging The Great Atlantic & Pacific Tea Company, Inc.’s (A&P) proposed $1.3 billion acquisition of Pathmark Stores, Inc. The complaint charges that the proposed acquisition would result in reduced competition between the two supermarket firms in Staten Island, New York and Shirley, Long Island, New York. Under the terms of a consent order settling the Commission’s charges, the companies must sell four of A&P’s Waldbaum’s supermarkets and one Pathmark supermarket in Staten Island, as well as one Waldbaum’s supermarket in Shirley, Long Island, to Commission- approved buyers by January 10, 2008.

“A&P and Pathmark are supermarket competitors in the highly concentrated areas of Staten Island and Shirley, Long Island, New York,” said Jeffrey Schmidt, Director of the FTC’s Bureau of Competition. “Absent the relief provided by the Commission’s consent order, consumers in these areas likely would face higher prices and lower levels of service when shopping for their weekly groceries.”

The Proposed Transaction

Under the terms of an agreement between the companies dated March 4, 2007, A&P will acquire all of the voting securities of Pathmark for approximately $1.3 billion, including the assumption of debt. A&P, a Maryland corporation based in Montvale, New Jersey, owns and operates about 316 supermarkets in Connecticut, Delaware, Maryland, New York, New Jersey, and the District of Columbia. It operates supermarkets under the A&P, A&P Super Foodmart, Food Basics, Food Emporium, Super Fresh, and Waldbaum’s banners. Pathmark, a Delaware corporation based in Carteret, New Jersey, owns and operates about 141 supermarkets in Delaware, New York, New Jersey, and Pennsylvania, all under the Pathmark banner.

The Commission’s Complaint

According to the FTC’s complaint, absent relief, A&P’s acquisition of Pathmark would violate Section 7 of the Clayton Act and Section 5 of the FTC Act, as amended, by lessening competition in the retail sale of grocery products from supermarkets. Specifically, the complaint alleges that the acquisition would eliminate competition between A&P and Pathmark in certain areas where both operate supermarkets. Supermarkets are stores that carry a wide selection and deep inventory of food and grocery products in a variety of brands and sizes, enabling consumers to buy substantially all of their food and other grocery shopping items in a single visit.

The complaint alleges that the acquisition would harm consumers in two areas: Staten Island, New York, and Shirley, Long Island, New York, both of which are highly concentrated markets. Specifically, the proposed acquisition may increase opportunities for all supermarkets in these geographic markets to engage in coordinated interaction or for A&P to exercise unilateral market power, leading to higher prices or lower levels of service. According to the complaint, entry would not be timely, likely, or sufficient to prevent these anticompetitive effects.

Terms of the Consent Order

The consent order approved by the Commission is designed to remedy the alleged anticompetitive effects of A&P’s acquisition of Pathmark. The order requires A&P to sell four Waldbaum’s supermarkets and one Pathmark supermarket in Staten Island, and a Waldbaum’s supermarket in Shirley, Long Island, together with their related assets. The address of each store can be found in the analysis to aid public comment for this matter, which is linked to this press release on the FTC’s Web site.

The Pathmark store and four Waldbaum’s stores in Staten Island will be divested to King Kullen Grocery Company, Inc., and the Waldbaum’s store in Shirley will be divested to The Stop & Shop Supermarket Company LLC, a subsidiary of the Dutch corporation Koninklijke Ahold NV. The order requires that the divestitures take place no later than January 10, 2008. If the divestitures are made during the public comment period under the order and the FTC finds that the required buyers are not acceptable, the companies must sell these assets to other buyers within three months of when the order becomes final, after receiving prior approval of the Commission.

The consent order also contains a separate order to maintain assets. Under its terms, the companies are required to maintain the viability of the six supermarkets to be divested pending their sale to ensure they are competitively viable when operated by the buyers. Further, the order prohibits A&P and Pathmark, for 10 years and without prior notice to the FTC, from owning or leasing interests in any property that has operated as a supermarket within the prior six months in either Staten Island or Shirley. The order also prohibits the companies, for 10 years, from entering into or enforcing any agreement that restricts the ability of anyone who acquires any interest in any location formerly used by A&P or Pathmark as a supermarket in Staten Island or Shirley to operate that location as a supermarket.

The Commission vote to approve the consent order was 5-0. The order will be subject to public comment for 30 days, until December 27, 2007, after which the FTC will decide whether to make it final. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580.

The FTC would like to thank the states of New York, New Jersey, and Pennsylvania for their assistance in conducting the investigation into the proposed transaction and developing the resulting consent agreement. The New York State Attorney General anticipates entering into an agreement with the parties that mirrors the proposed consent order divestitures.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

FTC Reviews Environmental Marketing Guides, Announces Public Meetings

The Federal Trade Commission is beginning a regulatory review of its environmental marketing guidelines, also known as the Green Guides. The guides outline general principles for all environmental marketing claims and provide specifics about certain green claims, such as degradabilty, compostability, recyclability, recycled content, and ozone safety. In a Federal Register Notice, the Commission is requesting comments on the guides, including standard questions about costs, benefits, and effectiveness of the guides, and questions on specific topics, including “sustainable” and “renewable” claims. While the review was scheduled to begin in 2009, because of the current increase in green advertising claims, the Commission is reviewing the guides at this time to ensure they reflect today’s marketplace. The guides were last updated in 1998.

As part of the Green Guides review, the FTC will be holding public meetings or workshops on a number of green marketing topics. The first workshop on January 8, 2008, will address the marketing of carbon offsets and renewable energy certificates (RECs) as detailed in a separate Federal Register Notice published concurrently with the Notice announced above. Carbon offsets fund projects designed to reduce greenhouse gas emissions in one place in order to counterbalance or “offset” emissions that occur elsewhere. For example, a carbon offset provider might use offset proceeds to pay for landfill methane collection activities or tree planting in an effort to reduce greenhouse gasses. RECs are created when renewable power generators sell their electricity as conventional electricity, and then sell the environmental attributes of their power separately through a certificate. For example, consumers may purchase conventional electricity from their utility, and then separately purchase RECs to subsidize renewable energy elsewhere. Through the workshop and related public comments, FTC staff will explore advertising claims related to these products, as well as issues of consumer perception, substantiation, and self-regulation. The workshop will take place on January 8, 2008 from 9 a.m. until 5 p.m. at the FTC’s Conference Center at 601 New Jersey Ave NW, in Washington, DC.

The initial comment period on the Green Guides will be open until February 11, 2008. Additionally, the Commission will open a separate comment period for each public meeting. Thus, for the carbon offset workshop on January 8, the public may file comments until January 25, 2008. Details about the future public meetings will be announced at a later date. Copies of both Federal Register Notices can be found on the FTC’s Web site. For more information about the general guideline review, staff contacts are Janice Podoll Frankle (202) 326-3022 and Laura Koss (202) 326-2890. For more information about the Carbon Offset and REC workshop, the staff contact is Hampton Newsome (202) 326-2889.

The Commission votes to approve the publication of the Federal Register notices were both 5-0.

FTC Approves Final Consent Order in Sixth Alternative HRT Matter

For Your Information

November 23, 2007

Commission approval of final consent order: Following a public comment period, the Commission has approved the issuance of a final consent order in the sixth matter related to the advertising and sale of alternative hormone replacement therapy (HRT) products, Merilou Barnekow, individually and doing business as Women’s Menopause Health Center. The Commission vote approving the issuance of the final order was 5-0. (FTC File No. 072-3143; the staff contact is Gregory Ashe, Bureau of Consumer Protection, 202-326-3719; see press release dated October 5, 2007.)

Contact Information

MEDIA CONTACT:

Office of Public Affairs
202-326-2180

Federal Court Finds Kevin Trudeau in Civil Contempt

On November 16, 2007, a U.S. District Court judge found Kevin Trudeau in contempt of court for violating a 2004 permanent injunction. The Court found that Trudeau violated the permanent injunction when he misrepresented the contents of his book, “The Weight Loss Cure ‘They’ Don’t Want You to Know About,” in several infomercials. The permanent injunction banned Trudeau from using infomercials to sell any product, service, or program. The ban contained a narrow exemption for infomercials for books and other publications, but specifically required that Trudeau not misrepresent the content of the books. Judge Robert W. Gettelman ruled that Trudeau “…has misrepresented the contents of his book by stating in his infomercials that his diet protocol was ‘easy’ and that it allowed dieters to ‘eat whatever they want,’ and he has misled thousands of consumers.”

The 2004 permanent injunction settled the Federal Trade Commission’s charges that Trudeau had falsely claimed that his calcium product could cure cancer and other serious diseases, and that a purported analgesic called Biotape could permanently cure or relieve severe pain. The appropriate contempt remedy for violating the permanent injunction is still to be determined by the Court.

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