Futter, Carl a

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JN THE MATTER OF THE CARLAY COMPANY AND CARL A. FUTTER COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 6 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4898. Complaint, Jan. £9, 1943-Decision, Oct. 18, 1944 Where a corporation and an individual, officer and principal stockholder thereof, engaged in the interstate sale and distribution of caramel candy enriched or fortified with certain vitamins and minerals, which they designated "Ayds," intended for use in the removal of excess weight, and sold in 1~ pound boxes, together with printed directions prescribing the observance of one of three restricted diets; through statements in advertisements of their product in newspapers and periodicals, and in circulars, leaflets, display cards and other advertising media- (a) Represented, directly or by implication, that the use of their candy and "plan" provided an easy way or method whereby excess weight might be removed from the body, and that such reduction in weight was effected without the necessity of restricting the diet, through such statements as "Many overweights praise the A YDS Candy reducing plan. It is easy. It is pleasant. No drugs. No exercising. It is usually effective where overweight is caused by over-nutrition." "One or two delicious pieces eaten just before each meal, •• and AYDS Candy curbs the craving for rich fattening foods. AYDS contain vitamins A, Bl and D and other essential nutrients. The diet is reduced automatically without the usual effort without weakening effects •. , without hunger pangs." "A YDS Candy helps supply Vitamins A, Bl, and D to prevent deficiencies that might occur due to lessened appetite. • • •" and others of similar nature, along with such matteras "WOULD YOU LIKE TO LOSE UP TO 10 LBS. IN 5 DAYS? TRY Tills NElV HOME LEMON JUICE RECIPE WAY TO LOSE UGLY FATI" "Here's marvelous news for women who are overweight! Now you can make a reducing supplement right in your own kitchen, to help you lose those ugly, unwanted pounds! It's so simple-so easy- and so effective! Some lose as much as 10 pounds in their first 5 days using this Plan!" "You never starve yourself. You use no drugs. You take no laxatives. You take no more exercise than you are accustomed to take. You eat plenty of healthful, satisfying foods. Yet you lose weight!"

The facta being that removal of excess weight cannot be accomplished through the use of their said candy and "plan," without dieting; except in the comparatively rare cases in which excess weight is due to some physical disorder it is almost invariably due to overeating, the only effective treatment for which is reduction of the food intake, particularly as to those foods having a high caloric value, and hence observance of a restricted diet; and while, as in the case of any sweet, the eating of said candy immediately preceding a meal may to some extent curb or dull the appetite and make it somewhat easier to refrain from overeating at that particular meal, such effect is only temporary; the desire for food will soon return, and, unlesa restrained and the diet adhered to, effort to reduce weight will result in failure; and use of their plan is not, as claimed by them, "easy," adherence to restricted diets such as prescribed by them being usually a difficult matter, particularly for overweight individuals, and requiring the exercise of an unusual amount of will power and self-restraint; and Complaint 39 F. T. C.

(b) Failed in their said advertisements, except in rare instances, to reveal facts material in the light of representations contained therein in that they failed to reveal that said plan for the use of their candy included adherence to a restricted diet, and that adherence to such diet was essential to the removal of excess weight by the purchaser, who was not informed until after purchase of the candy and the opening of the box that restricted diet in addition to the use of the candy must be observed; With tendency and capacity to mislead and deceive a substantial portion of the purchasing public with respect to the nature of their weight reducing plan and the nature, properties, and effectiveness of their candy, and thereby to cause it to purchase substantial quantities thereof:

li eld, That such acts and practices, under the circumstances set forth, were all to the prejudice of the public, and constituted unfair and deceptive acts and practices in commerce.

Before Mr. Arthur F. Thomas and Mr. J. Earl Cox, trial examiners. Mr. Merle P. Lyon and Mr. Clark Nichols for the Commission. Mr. Ilenry Junge, Mr. Bernard JV. Vinissky, Mr. Frank E. Gettleman and Mr. Arthur Gettleman, of Chicago, Ill., for respondents. Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said act, the Federal Trade Cornmission, having reason to believe that The Carlay Co., a corporation, and Carl A. Futtcr, individually, and as president and treasurer of The CarbY Co., hereinabove referred to as respondents, have violated the provisions of the said act, and it appearing to the Commission that a proceeding bY it in respect thereof would be in the public interest, hereby issues its cornplaint, stating its charges in that respect as follows: PARAGRAPH 1. The respondent, The Carlay Co., is a corporation, orga!lized, existing and doing business under the laws of the State of Illino1~, with its principal office and place of business located at 160 East Illinois Street, Chicago, Ill.

The respondent, Carl A. Futter, an individual, is the principal stock~­ holder and president and treasurer of The Carlay Co., and likewise has IUS office and principal place of business located at 160 East Illinois Str~et, Chicago, Ill. He directs the policies of and is responsible for the operation and management of The Carla.y Co.

PAR. 2. Respondents arc now, and for more than two years last past have been, engaged in the sale and distribution of a candy product knowd as "Ayd-i" sold in conjunction with so-called weight-reducing plans an recommended as a treatment or cure of obesity. In the course and conduct of their business, the respondents cause said candy product, whe.n sold, to be transported from their place of business in tho State of Illinold to the purchasers thereof located in various other States of tho Unite States and in the District of Columbia. H.respondents maintain, and at dll tims mentioned herein have maintained, a course of trade in said cal ~ product in commerce among and between the various States of the Umte States and in the District of Columbia.

THE CARLAY CO., ET AL. 359 357 Complaint PAR. 3. In the course and conduct of their aforesaid business, therespondents have disseminated, and are now disseminating, and have caused, and are now causing the dissemination of, false advertisements concerning their said product by the United States mails and by various other means in commerce, as commerce is defined in the Federal Trade Commission Act; and respondents have also disseminated, and are now disseminating, and have caused, and are now causing the dissemination of, false advertisements concerning their product by various means for the purpose of inducing, and which are likely to induce, directly or indirectly, the purchase of their said product in commerce, as commerce is defined in the Federal Trade Commission Act. Among and typical of the false, misleading and deceptive statements and representations contained in said advertisements disseminated and caused to be disseminated as hereinabove set forth, by the United States mails, by advertisements in newspapers and periodicals, and by circulars, leaflets, pamphlets and other advertising literature, are the following:

Many overweights praise the Ayds Candy reducing plan. It is easy. It is pleasant. No drugs. No exercising. It is usually effective where overweight is caused by over-nutrition. One or two delicious pieces eaten just before each meal • • • and Ayds Candy curbs the craving for rich, fattening foods. Ayds contain vitamins A, B, and D and other essential nutrients. The diet is reduced automatically without the usual effort • • • without weakening effects • • • without hunger pangs. :Many lose weight by "Eat Candy" plan. Delicious Ayds Candy, eaten as directed by Ayds plan, curbs appetite for fattening foods. Ayds plan calls for no exercising. Many simply eat this delicious candy to curb their appetites for rich, fattening foods. Ayds plan is effective only in cases of overweight due to over-indulgence in eating which includes most overweight people. Ayds Candy helps supply Vitamins A, ll, and D to prevent deficiencies that might occur due to lessened appetite.

Would you like to lose up to 10 lbs. in 5 days? Try this New Home Lemon Juice Recipe Way to lose ugly fat! II ere's marvelous news for women who are overweight! N'ow you can make a reducing supplement right in your own kitchen, to help you lose those ugly, unwanted pounds! It's so simple-so easy-and so effective! Some lose as much as 10 pounds in their first 5 days using this Plan! You never starve yourself. You use no drugs. You take no laxatives. You take no more exercise than you are accustomed to take. You eat plenty of healthful, satisfying foods. Yet you lose Weight. 1 Why be fat? Here's an Amazing, Easy Way to Lose Weight. No starvation diet. N'o strenuous exercises. Everywhere in America women are praising this simple, new Way to lose ugly, unwanted pounds. lly this easy plan many an overweight has been aLJe to regain a more slender, more graceful figure. Many Now Eat Candy While They Crow Thin. It's so easy, you just eat one or two delicious pieces of Ayds Candy, with a glass of water before meals. This encourages you not to eat the rioh, fattening foods, high in calories. You eat plenty-never go hungry! You don't cut out sweets and starchy foods. You just cut them down. You really enjoy reducing by this plan. The Eat Candy plan • • • now eat candy and grow thin-new, easy plan. You never starve yourself. You eat plenty of healthful, satisfying foods. I lost 42 pounds in GO days.

You can lose ugly pounds and have a slender, graceful figure. No dangerous dieting. N'o drugs. No exercising. You simply eat this pure delicious food candy as directed and grow thin.

Complaint 39 F. T. C.

Don't worry about those extra pounds. Many lose weight by new plan-eat candy every day.

At last I wear size 16 again! Lost 36 pounds without exercising-using Ayds plan and candy.

PAR. 4. Through the use of the statements hereinabove set forth and others similar thereto not specifically set out, all of which purport to be descriptive of the weight reducing properties of respondents' product, respondents have represented, and do now represent, directly and indi· rectly, that the use of "Ayds" and respondents' "plans" present a new, easy way to reduce excess weight without dieting or exercise; that the use of Ayds Candy plays a significant and important part in the reducing plan offered by respondents; that the use of Ayds Candy will curb or dull the appetite for fattening foods and that respondents' plans for reducing will result in the loss of excess weight in an easy, pleasant way without the necessity of strict dieting.

PAR. 5. The "plans" mentioned in paragraph 2 herein are designated by respondents as "No.1 Reducing Plan (For quick results), No.2 Re· clueing Plan (The easier plan) and The Lemon Juice Recipe Plan." These so-called plans are outlined in printed circulars enclosed in the package in which the Ayds are sold and are not revealed or brought to the attention of the purchaser in respondents' advertising or otherwise before the pur· chase of respondents' product but, on the contrary, the purchaser is led to believe through the use of the aforesaid statements and by the conceal· ment of the actual facts that the only essential requirement, in order to obtain a reduction in weight, is the eating of a few pieces of the Ayds Candy before meals. On the contrary, the so-called plans provide andre· quire a severely restricted low calorie diet in addition to the use of respo~dh· ents' product. Said product is eRRcntially caramel candy, fortified Wlt Vitamins A, D, and D and minerals, designed to supply deficiency in vita· mins and minerals when a restricted diet is adhered to. PAR, 6. The aforcsaid statements and rrpresentations and the failure _of respondents to fully disclose the nature of the said "plans" arc false, nus· leading and deceptive. In truth and in fact, the Ayds play no significant role in the reducing program, their only function being to furnish some degree of vitamin and mineral supplementation for a reducing diet. The use of Ayds is not a new, cary way to reduce excess weight, but on the contrary it is neccRsary for the individual to follow a rigidly restricted dietary' program. There is nothing easy about either the selection of, or adh~r· ence to, such a diet, particularly in the cn.Rc of an individual whose obesity' is due to overeating. The effect of Ayds upon the appetite is only temporary, and docs not curb or dull the appetite or mitigate the pan~ of hung~U between meals. In order to be successful in reducing weight it is stl necessary for the user to follow a rigidly restricted low calorie diet, with all the discomforts and annoyances which are inherent in such diets. More· over, such low caloric diets ordinarily supply sufficient quantities of ~ssen~ tial nutritive clements, including proteins, vitamin.'! and minerals, Wl~hhoud the necessity of supplementing them by Aydq or other vitamin-ennc c products. . • Any loss of weight that may be experienced by a person follo~\'ln~ the regimen advocated by respondents is due primarily to the restncte THE CARLAY CO., ET AL. 361 357 Findings diet and not to the Ayds. Furthermore, respondents' representations as to the loss of weight that may be expected by the use of their reducing methods are grossly exaggerated. While such a dietary regimen may result in weight loss in many cases, there are relatively few persons who would lose 10 pounds in five days, 42 pounds in sixty days, or comparable losses in any other specified period of time, without serious impairment of health and bodily vigor.

PAR. 7. The use by the respondents of the foregoing false, deceptive and misleading statements, representations and advertisements, disseminated as aforesaid, with respect to their product "Ayds" has had, and now has, the capacity and tendency to, and does, mislead and deceive a substantial portion of the purchasing public, because of such erroneous and mistaken belief, to purchase said product. PAR. 8. The aforesaid acts and practices of the respondents are all to the prejudice and injury of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on January 29, 1943, issued and subsequently served its complaint in this proceeding upon the respondents, The Carlay Co., a corporation, and Carl A. Futter, individually, and as president and treasurer of The Carlay Co., charging them with the use of unfair and deceptive acts and practices in commerce in violation of the provisions of ~hat act. After the filing of respondents' answer, testimony and other ev- Idence in support of and in opposition to the allegations of the complaint Were introduced before trial examiners of the Commission theretofore duly designated by it, and such testimony and other evidence were duly re- ~orded and filed in the office of the Commission. Thereafter, the proceed- Ing regularly came on for final hearing before the Commission on the complaint, the am;wer thereto, testimony and other evidence, report of the trial examiners upon the evidence and the exceptions to such report, briefs in support of and in opposition to the complaint, and oral argument; and the ~ommission, having duly considered the matter and being now fully ad- 'V'L'led in the premises, finds that this proceeding is in the interest of the Public and makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO Tile FACTS . PARAGRAPH 1. Respondent, The Carlay Co., is a corporation, organ- IZ~d, existing, and doing business under the laws of the State of Illinois, With its principal office and place of business located at 160 East Illinois Street, Chicago, Ill. The corporation was organized in 1940 . . Respondent, Carl A. Futter, an individual, is the principal stockholder In the respondent corporation, and from the time of the organization of the corporation in HHO until July, 1943, was the president and treasurer of 638680"'--47-26 Findings 39 F. T. C.

the corporation and was in active charge and control of all of its business policies and practices. In July, 1943, another individual became president, but respondent, Futter, continued as treasurer and was also designated sales manager of the company. There has been no change in stock ownership and respondent, Futter, is still the principal stockholder in the corporation. He still participates actively in the formulation of the policies and the direction of the operation and practices of the corporation. PAn. 2. The respondents are and since some time in 1940 have been engaged in the sale and distribution of a candy product designated by them as "Ayds," intended for use in the removal of excess weight from the human body. Respondents cause and have caused their product, when sold, to be transported from their place of business in the State of Illinois to purchasers thereof located in various other States of the United States and in the District of Columbia. Respondents maintain and have maintained a course of trade in their product in commerce among and between the various States of the United States and in the District of Columbia. PAn. 3. In the course and conduct of their business respondents have disseminated and are now disseminating, and have caused and are now causing the dissemination of, advertisements concerning their product by means of the United States mails and by various other means in commerce, as "commerce" is defined in the Federal Trade Commission Act; and respondents have also disseminated and are now disseminating, and have caused and are now causing the dissemination of, advertisements concerning their product by various means for the purpose of inducin.g and which arc likely to induce, directly or indirectly, the purchase of their product in commerce, as "commerce" is defined in the Federal Trade Commission Act.

Among the typical of the various statements contained in such advertisements disseminated and caused to be disseminated, as set forth above, by the United States mails, by insertion in newspapers and periodicals, and by circulars, leaflets, display cards and other advertising media, are the follo\\ing:

1.\lany overweights praise the AYDS Candy reducing plan. It is easy. It is pleasant. No drugs. No exercising. It is usually effective where overweight is caused by over· nutrition.

One or two delicious pieces eaten just before each meal and AYDS Candy curbs the craving for rich fattening foods. AYDS contain vitamins A, D1 and D and other essential nutrients. The diet is reduced automatically without the usual effort· · · without weakening effects, •• without hunger pangs. (Comm. Ex. No. 44) Many I..OSE WEIGHT by "EAT CANDY" PLAN Delicious A YDS Candy, eaten as directed by AYDS Plan, curbs appetite for fatten· ing foods. (Comm. Ex. No. 68) • • • AYDS plan calls for no exercising. Many simply eat this delicious cand~ to curb their appetites for rich, fattening foods. A YDS plan is effective only in cases 0 overweight due to overindulgence in eating, which Includes most overweight pe~plet A YDS CANDY helps supply Vitamins A, Dl, and D to prevent deficiencies that ongh occur due to lessened appetite, • • • (Comm. Ex. No. 67) THE CARLAY CO., ET AL. 363 357 Findings WOULD YOU LIKE TO WSE UP TO 10 LBS. IN 5 DAYS1 TRY THIS NEW HOME LEMON JUICE RECIPE WAY TO LOSE UGLY FAT! Here's marvelous news for women who are overweight! Now you can make a reducing supplement right in your own kitchen, to help you lose those ugly, unwanted pounds! It's so simple-so easy-and so effective! Some lose as much as 10 pounds in their first 5 days using this Plan I You never starve yourself. You use no drugs. You take no laxatives. You take no more exercise than you are accustomed to take. You eat plenty of healthful, satisfying foods. Yet you lose weight! (Comm. Ex. No. 42) WHY BE FAT1 HERE'S AN AMAZING, EASY WAY TO LOSE WEIGHT NO STARVATION DIET NO STRENUOUS EXERCISES EVERYWHERE in America, women are praising this simple, new way to lose ugly, unwanted pounds. By this easy plan many an overweight has been able to regain a more slender, more graceful figure.

MANY NOW EAT CANDY WIIILE THEY GROW TIIIN It's so easy, you just eat one or two delicious pieces of AYDS Candy, with a glass of Water before meals.

This encourages you not to overeat the rich, fattening foods, high in calories. You eat plenty-never go hungry! You don't cut out sweets and starchy foods. You just cut them down. You really enjoy reducing by this plan! (Comm. Ex. No. 41) I LOST 42 POUNDS IN GO DAYS NOW EAT CANDY AND GROW TIIIN NEW, EASY PLAN You can lose ugly pounds anJ have a slender graceful figure. No dangerous dieting. N'o drugs. No exercising. • • • You simply eat this pure delicious food candy as directed and grow thin. • • • (Comm. Ex. No. 71, p. 48) DON'T WORRY ABOUT THOSE EXTRA. POUNDS MANY LOSE WEIGHT BY NEW PLAN-EAT CANDY EVERY DAY (Comm. Ex. No. 32, Ad No. C-48) "At Last I wear SIZE 16 again I LOST 313 LBS. without exercising-using Ayds l"lan and Candy." (Comm. Ex. No. 57) • PAn. 4. Through the use of these statements and others of a similar nature, respondents have represented, directly or by implication, that the Une of their candy and "plan" provides an ea,-;y way or method whereby excess weight may be removed from the body, and that such reduction in Weight is effected without the necessity of restricting the diet. PAn. 5. H.respondents' product iil in fact nothing more than caramel candy, enriched or fortified with certain vitamins and minerals. It ill sold to the public through department stores, drug store:'! and other retail outle~s .. The candy iil packed and sold to the public in boxeil, each box contammg 104 pieces (IY2 pounds) of candy. Respondents' "plan" for the ternoval of excess weight call~ for the eating of one or two pieces of the candy before each meal and the observance of one of three restricted diets Prescribed by respondents in the printed directions enclosed in each box Findings 39 F. T. C.

of candy. Respondents' theory as to the part played by the candy in the weight reducing program is that the eating of the candy curbs the appetite, with the result that less food is eaten. The only virtue claimed by respondents for the vitamins and minerals in the candy is that they afford some protection against any nutritional deficiency which might result from the purported decrease in the food intake.

The record establishes that, except in those comparatively rare cases in which there is some physical disorder, excess weight is almost invariably due to overeating. In such cases, the only effective treatment is the reduction of the food intake, particularly as to those foods having a high caloric value, and this in turn requires the observance of a restricted diet. As in the case of any sweet, the eating of respondents' candy immediately preceding a meal may to some extent curb or dull the appetite and make ~t somewhat easier to refrain from overeating at that particular meal. This effect, however, is only temporary; the desire for food will soon return, and unless such desire is restrained and the diet adhered to, the effort to reduce weight will result in failure.

In short, any reduction in weight following the use of respondents' plan results from the adherence to the diet prescribed by respondents and not from the use of the candy. One following the diet would lose weight regardless of whether the candy is used or not, and the use of the candy without adherence to the diet would prove ineffectual. The removal of excess weight from the body, therefore, cannot be accomplished through the use of respondents' candy and" plan" without the necessity of dieting. On the contrary, respondents' plan contemplates ~he adherence to a low caloric diet, and such adherence is in fact essential. Nor is the use of the plan "easy," as claimed by respondents. The adherence to restricted diets such as are prescribed by respondents is usually d difficult matter, particularly for individuals who are overweight, ~n require~ the exercise of an unwmal amount of will power and self-restrau~r PAn. 6. The Commission therefore finds that the representations roa 0 by respondents with respect to their candy and to their plan for the removal of excess weight, as set forth in paragraphs 3 and 4 hereof, are erroneous and misleading and constitute false ad ..·ertisements. PAn. 7. The Commission finds also that respondents' advertiscm7nts are false for the further reason that, except in rare instances, they fail ~0 reveal facts, material in the light of representations, contained therein, llf that the advertisements fail to reveal that respondents' plan for the use 0 their candy includes the adherence to a restricted diet, and that adherence to such diet is essential to the removal of excess weight. Except in rare instances, it is not until after the candy has been purchased and th~ box opened that the purchaser is informed by respondents (through the pr~ntcd directions in the box) that, in addition to the use of the candy, a restncted diet must be observed.

PAn. 8. The ube by respondents of these fal->c advertisements has the tendencr and capacity to mislead and deceive a substantial portion of the purchasmg public with respect to the nature of respondents' weight red~c; ing plan and the nature, properties, and effectiveness of rcsponden ~c candy, and the tendency and capacity to cause such portion of the pubh to purchase sub::;tantial quantities of respondents' candy as a result of tb 6 erroneous and mistaken belief so engendered.

THE CARLAY CO., ET AL. 365 357 Order CONCLUSION The acts and practices of the respondents, as herein found, are all to the prejudice of the public, and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

ORDER TO CEASE 4N'D DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the answer of respondents, testimony and other evidence taken before trial examiners of the Commission theretofore duly designated by it, report of the trial examiners upon the evidence and the exceptions to such report, briefs in support of and in opposition to the complaint, and oral argument; and the Commission having made its findings as to the facts and its conclusion that the respondents have violated the provisions of the Federal Trade Commission Act. It is ordered, That the respondents, The Carlay Co., a corporation, its officers, and Carl A. Futter, individually, and as an officer of said corporation, and respondents' agents, representatives, and employees, directly or through any corporate or other device, in connection with the offering for sale, sale, or distribution of respondents' candy product designated 11 Ayds," or any other product containing substantially similar ingredients or possessing substantially similar properties, whether sold under the same name or any other name, do forthwith cease and desist from directly or indirectly:

1. Disseminating or causing to be disseminated any advertisement by means of the United States mails, or by any means in commerce, as 11 commerce" is defined in the Federal Trade Commi.<;sion Act, which represents, directly or by implication:

(a) That excess weight may be removed from the body through the use of respondents' product and weight reducing plan without the necessity of restricting the diet.

(b) That the removal of excess weight from the body through the use of respondents' product and weight reducing plan is easy. 2. Disseminating or causing to be disseminated any advertisement by means of the United States mails, or by any means in commerce, as 11 commerce" is defined in the Federal Trade Commission Act, which represents, directly or by implication, that the use of respondents' product and weight reducing plan removes or aids in the removal of excess weight from the body, unless such advertisement discloses clearly and conspicuously that said plan includes the adherence to a restricted diet and that adherence to such a diet is essential to weight reduction.

3. Disseminating or causing to be disseminated any advertisement by any means for the purpose of inducing or which is likely to induce, directly or indirectly, the purchase of said pr~d~ct in comm~rce, as 11C?mmerce" is defined in the Federal Trade Commtsston Act, whtch advertisement contains any representation prohibited in paragraph 1 hereof or which fails to comply with the affirmative requirements set forth in l?ar!lgraph 2 hereof. It. is further ordered, That the resp.ondents shall,. ":ithin 60 da~s aft.er ~ervice upon them of this order, file \nth the Co~L'>Sl?n a. report m wnt- In~, setting forth in detail the manner and form m which they have com- Plied with this order.

Syllabus 39 F. T. C.