Hayoun Cosmetique, Inc

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IN THE MATfER OF HA YO UN COSMETIQUE, INC., ET AL.

CONSENT ORDER , ETC. , IN REGARD TO ALLEGED VIOLATION OF SECS. 5 AND 12 Of' THE FEDERAL TRADE COMMISSION ACT Doket C-3019. Complaint, May 1980-Deci, May 1980 This consent order requires, among other things, a New York City marketer and advertiser of products known as Hayoun Miracle Lotion, Hayoun Dryng Lotion Hayoun Lemon Moisturi....r and Hayoun Black Mask, and its corporate president, to cease disseminating advertising repreenting that the use of these products, alone or as part of the Hayoun Cosmetique Kit, win cure acne; eliminate acne scars and pokmarks; and result in a skin fre of acne blemishes. Respondents ace required to have a reasonable basis for represntations relating to product characteristics, performance and efficay; and maintain substantiating evidence for a period of three years. The order additionally require that respondents conspicuously disclose that no product. cures acne in every advertisement for the first six months of actual advertising of an acne preparation.

Appearances For the Commission: Mark A. Heller, Ira Nerlrn and Ross D. Petty. For the respondents: Norman R. Grtman, Grtman 8cha/anna New York City.

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 Commission having reason to believe that Hayoun Cosmetique . Inc., (hereafter "Cosmetique ) a corporation and Edouard Hayoun (hereafter "Hayoun ) as an individual and corporate officer, at times referred to as respondents, having violated the provisions of 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 complaint stating its charges in that respect as follows: PARAGRAPH 1. Cosmetique is a corporation organized existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at 212 E. 68 St., Ncw York, New York.

PAR. 2. Hayoun is an individual and corporate president of Cosmetique. He formulates, directs and controls the acts and practices of said corporate respondent including the acts and practices hereinafter set forth. His address is the same as that of said corporation. HAYOUN COSMET1QUE, INC., ET AL. 795 794 Complaint The aforementioned respond nts cooperate and act together in carrying out the acts "nd practices hereinafter set forth. PAR. 3. Respondents are now and for some time have been engaged in the business of marketing and advertising health-related products including but not limited to products known as Hayoun Miracle Lotion Hayoun Drying Lotion, Hayoun Lemon Moisturizer and Hayoun Black Mask. The aforesaid products are and were offered alone and as part of a program for the treatment ()f acne known as the Hayoun Cosmetique Kit (sometimes hereafter "Kit"). In connection with the manufacture and marketing of said. products, respondents have disseminated published and distributed, and now disseminate, publish and distribute advertisements and promotional material for the purpose of pr9moting the sale of said products for human use. These products, as advertised are "drugs" within the meaning of Section 12 of the Federal Trade Commission Act.

PAR. 4. In the course and conduct of their said businesses, the respondents have disseminated and caused the dissemination of certain advertisements concerning the Kit and/or any of the individual components thereof through the United States mails and by various means in or affecting commerce, as IIcoIDmerce" is defined in the Federal. Trade Commission Act, including hut not limited to the insertion of advertisements in magazines and newspapers with national circulations for the purpose of inducing and which were likely to induce, directly, or indirectly, the purchase of said products in commerce PAR. 5. Typical of the statements and representations in said advertisements, disseminated as previously described, but not necessarily inclusive thereof are the following: /,, .. ..;;) _ . ! ,, , .,.; . .., ,j,,:;:.; ,.:) :. .., !:, , , , ,..., ,;,, :\!...,., .j,..: .,. :?;:..:;:,.:,; Complaint 95 F.

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PAR. 6. Through the use of said advertisements and others referred to in Paragraphs Four and Five, respondents represented, and now represent, directly or by implication that: a. Use of the Hayoun Cosmetique Kit will cure acne. b. Use of the Hayoun Cosmetique Kit wil eliminate the scars and pockmarks caused by acne regardless of the severity of the condition. PAR. 7. In truth and in fact:

a. Use of the Hayoun Cosmetique Kit or any of its components either alone or as part of said Kit wil not cure acne. b. Use of the Hayoun Cosmetique Kit or any of its components either alone or as part of said Kit will not eliminate the scars and pockmarks which may result from acne.

Therefore, the advertisements referred to in Paragraphs Four and Five were and are misleading in material respects and constituted, and now constitute, false advertisements and the statements and representations set forth in Paragraph Six were and arc false, misleading ordcceptive.PAR. 8. Furthermore, through the use of the advertisements referred to in Paragraphs Four and Five, respondents represented, and now represent that use of the Hayoun Cosmetique Kit wil be effective in the treatment of acne.

PAR. 9. In truth and in fact, there existed at the time of thc first dissemination of the representations in Paragraphs Six and Eight no reasonable basis for making them in that respondent lacked competent and reliable scientific evidence to support each such representation. Therefore, the making and dissemination of said representations as alleged constituted, and now constitute, unfair or deceptive acts or practices in or affecting commerce.

PAR. 10. In the course and conduct of their aforesaid business, and at all times mentioned herein. the respondents have been, and now arc, in substantial competition in or affecting commerce with corporations firms and individuals representing or engaged in the over-the-counter and prescription drug industries.

PAR. 11. The use by respondents of the aforesaid unfair or deceptive representations and the dissemination of the aforesaid false advertisements has had, and now has, the capacity and tendency to mislead members of the consuming public into the erroneous and mistaken belief that said representations were and are true. PAR. 12. The aforesaid acts and practices of respondent, as herein alleged, including the dissemination of the aforesaid false advertis- HA YOUN COSMET1QUE, INC., ET AL. 799 794 Decision and Order ments, were and are all to the prejudice and injury of the public and of respondents' competitors, and constituted and now constitute, unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, in violation of Sections 5 and 12 of the Federal Trade Commission Act. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the bureau proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violations of the Federal Trade Commission Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of al1 the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of such agreement is for settlement purposes only and docs not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order;

1. Respondent Hayoun Cosmetiquc, Inc. is a corporation organized existing and doing business under and by virtue of the laws of tbe State of New York with its office and principal place of business located at 212 E. 68 St., New York, New York. 2. Respondent Edouard Hayoun is an individual and corporate officer of Hayoun Cosmetique, Inc., and maintains an office at 212 E. 68 St., New York, New York.

3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

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C. Disseminating or causing the dissemination of any advertisement by means of the United States mails or by any means in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, which directly or indirectly makes representations referring or relating to the performance or efficacy of any product unless, at the time of each dissemination of such representation(s) respondents possess and rely upon a reasonable basis for each such representation(s).

It is furtlur ordered That within sixty (60) days of the acceptance of this order, respondents shall cease and desist from disseminating or causing the dissemination of advertisements for the Kit or any of its components or any other acne product or regimen, unless, during their first six (6) months of actual advertising beginning sixty (60) days after this order becomes final, respondents clearly and conspicuously disclose in every advertisement the corrective message that no product can cure acne. Nothing in any part of each such advertisement shall in any way obscure or contradict the clear meaning of this disclosure. The obligation to run corrective advertisements shall not in any way alleviate other order obligations. Furthermore such. advertisements shall not represent, directly or indirectly, that the Federal Trade Commission approves, recommends or in any manner endo:rses the advertised product or product advertising.

It is furtlur ordered That the corporate respondent shall forthwith distribute a copy of this order to each of its operating divisions. It is furtlur ordered That each respondent notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of suhsidiaries or any other change in the corporation which may affect compliance obligations arising out of this order. , within sixty (60) It is furtlur ordered That each respondent shall days after this order becomes final, and annually thereafter for three (3) years, file with the Commission a report, in writing, signed by respondent, setting forth in detail the manner and form of its compliance with this order.

It is furtlur ordered That each respondent shall maintain files and Decision and Order 95 F.

records of ajj substantiation related to the requirements of Part IB and IC of this order for a period of three (3) years after the dissemination of any advertisement which relates to that portion of the order. Additionally, such materials shall be made available to the Federal Trade Commission or its staff within fifteen (15) days of a written request for such materials.

CADENCE INDUSTRIES CORP., ET AL.

803 Modifying Order