American Institute of Habit Control, Inc

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AMERICAN INSTITUTE OF HABIT CONTROL, INC., ET AL. 395

395 Complaint

IN THE MATTER OF

AMERICAN INSTITUTE OF HABIT CONTROL, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-3522. Complaint, Aug. 23, 1994--Decision, Aug. 23, 1994

This consent order prohibits, among other things, a Florida-based company and its president from making any representation about the relative or absolute performance or efficacy of any smoking cessation or weight loss program, unless they possess and rely upon competent and reliable scientific evidence to substantiate the representation, and from representing that the Surgeon General's 1989 report states that the hypnosis method used by the respondents is one of the most effective ways to stop smoking.

Appearances

For the Commission: Matthew Daynard.

For the respondents: David A. Clanton, Baker & McKenzie, Washington, D.C.

COMPLAINT

The Federal Trade Commission, having reason to believe that American Institute of Habit Control, Inc., a corporation, and Steven Present, individually and as an officer of said corporation ("respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

PARAGRAPH 1. Respondent American Institute of Habit Control, Inc., is a Florida corporation, with its principal office or place of business at 9655 South Dixie Highway, Miami, Florida. Respondent Steven Present is the sole officer, director and shareholder of the corporate respondent. Individually or in concert with others, he formulates, directs and controls the acts and practices of the corporate respondent, including the acts and practices alleged in this complaint. His principal office or place of business is the same as that of the corporate respondent.

Complaint 118 F.T.C.

PAR. 2. Respondents have advertised, offered for sale, and sold The Present Seminar for smoking cessation and weight loss, and other stop-smoking and weight-loss seminars to consumers. The Present Seminar is a single, group hypnosis session, two-and-one-half hours in length, provided to consumers by respondent Steven Present at various hotel locales in various cities.

PAR. 3. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act.

PAR. 4. Respondents have disseminated or have caused to be disseminated advertisements for The Present Seminar for smoking cessation, including but not necessarily limited to the attached Exhibits A-C. These advertisements contain the following statements:

A. "STOP SMOKING IN 2-1/2 HOURS! . . . 97% proven success rate. ATTEND STEVEN PRESENT'S GROUP HYPNOSIS SEMINAR AND STOP SMOKING-QUICKLY, EASILY AND PERMANENTLY! At last, a major breakthrough now makes it much easier to stop smoking. Steven Present's stop smoking methods, perfected over the past 10 years, were TOP RATED IN THE 1989 U.S. SURGEON GENERAL'S SMOKING REPORT . . . YOU WILL BECOME A NON-SMOKER IN JUST ONE NIGHT! . . . Is it hard to believe that after years of smoking, after trying to quit so many times before, that the answer is just a few days away?. . .Even smokers with 30, 40, and 50 year habits will crush their cigarettes and throw them away - FOR GOOD! 97% of those who attend, that's right, 97% WILL COMPLETELY STOP SMOKING BEFORE THE SEMINAR'S OVER! NOW YOU TOO WILL BREAK FREE FROM CIGARETTES!. . .LOSE WEIGHT FREE!. . .With Steven Present's hypnosis, you can lose weight without dieting, by eliminating your desire for fattening foods and sweets. After just one session of Steven Present's hypnosis, you can eat less and still feel full! That's how you can lose weight and finally keep it off!" (Exhibit A).

B. "THE PRESENT SEMINAR - FIRST IN RESULTS! STOP SMOKING IN 2-1/2 HOURS-GUARANTEED!. . .DON'T MISS THIS CHANCE TO STOP SMOKING FOREVER. ATTEND STEVEN PRESENT'S GROUP HYPNOSIS SEMINAR. Steven Present, M.S., Dir., is nationally known for his success in changing hard core smokers into ex-smokers. After his seminar, 97% of his clients lose their desire to smoke, throw away their cigarettes, and stop smoking. Now you can too. . .During Steven Present's Seminar, his proven system will completely break the control that nicotine and cigarettes have over you. If you are like the thousands throughout the country who attend his seminar, you too will stop smoking without withdrawal, stress, or weight gain. In JUST ONE NIGHT! If this sounds too good to be true, here's the proof. The 1989 U.S. SURGEON GENERAL'S SMOKING REPORT STATED THAT GROUP HYPNOSIS IS ONE OF THE MOST EFFECTIVE WAYS TO STOP SMOKING." (Exhibit B)

C. "STOP SMOKING IN 2-1/2 HOURS! 97% PROVEN SUCCESS RATE! Even if you've tried other methods. . .no matter how long you've been smoking or

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395 Complaint

how many packs a day you smoke. . .with Steven Present's unique method of hypnosis, you will stop smoking. . .in just 2-1/2 hours-Guaranteed. Without withdrawal, anxiety, or weight gain. . .YOU WON'T CRAVE CIGARETTES. . .Steven Present's method is different from other systems because it doesn't depend on willpower. Instead, it uses the power of hypnosis to eliminate your craving for cigarettes in every situation. . .45 specific hypnotic suggestions eliminate your craving for cigarettes at all times, including: Driving your car. . .after a meal. . .drinking coffee. . .talking on the phone. . .while having a drink. . .waking up in the morning, and when around others who are smoking. It happens automatically, effortlessly . . .97% of those who attend will throw away their cigarettes and completely stop smoking before the seminar is over. . .LOSE WEIGHT - FREE. . .With Steven Present's hypnosis, you can lose weight without dieting, by eliminating your desire for fattening foods and sweets. After just one session of Steven Present's hypnosis, you can eat less and still feel full! That's how you can lose weight and finally keep it off!" (Exhibit C)

PAR. 5. Through the use of the statements contained in the advertisements referred to in paragraph four, including but not necessarily limited to the advertisements attached as Exhibits A-C, respondents have represented, directly or by implication, that:

A. Ninety-seven percent of the participants in respondents' smoking cessation seminars permanently abstain from smoking after attending those seminars.

B. The U.S. Surgeon General, in the 1989 U.S. Surgeon General's Report on Smoking, Reducing the Health Consequences of Smoking: 25 Years of Progress, states that the group hypnosis method used by respondents is one of the most effective ways to stop smoking.

PAR. 6. In truth and in fact:

A. Ninety-seven percent of the participants who attend respondents' smoking cessation seminars do not permanently abstain from smoking after those seminars.

B. The U.S. Surgeon General, in the 1989 U.S. Surgeon General's Report on Smoking, Reducing the Health Consequences of Smoking: 25 Years of Progress, does not state that the group hypnosis method used by respondents is one of the most effective ways to stop smoking.

Complaint 118 F.T.C.

Therefore, the representations set forth in paragraph five were, and are, false and misleading.

PAR. 7. Through the use of the statements in the advertise-ments referred to in paragraph four, including but not necessarily limited to the advertisements attached as Exhibits A-C, respondents have represented, directly or by implication, that:

A. Participants who attend respondents' single-session group hypnosis seminar are cured of smoking addiction and permanently abstain from smoking cigarettes.

B. Respondents' single-session, group hypnosis seminar is more efficacious for smoking cessation than other smoking cessation methods.

C. Participants who attend respondents' single-session group hypnosis seminar are cured of smoking addiction without experienc-ing withdrawal, stress or weight gain.

D. Participants who attend respondents' single-session group hypnosis seminar achieve and maintain weight loss.

PAR. 8. Through the use of the statements in the advertise-ments referred to in paragraph four, including but not necessarily limited to the advertisements attached as Exhibits A-C, respondents have represented, directly or by implication, that at the time they made the representations set forth in paragraphs five and seven, respondents possessed and relied upon a reasonable basis that substantiated such representations.

PAR. 9. In truth and in fact, at the time that they made the representations set forth in paragraphs five and seven, respondents did not possess and rely upon a reasonable basis that substantiated such representations. Therefore, the representation set forth in paragraph eight was, and is, false and misleading.

PAR. 10. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

Commissioner Owen recused and Commissioner Yao not participating.

AMERICAN INSTITUTE OF HABIT CONTROL, INC., ET AL. 399

Complaint

EXHIBIT A

THE STEVEN PRESENT SEMINAR AMERICA'S BEST GUARANTEES YOU'LL... STOP SMOKING IN 2 1/2 HOURS! FOR ONLY $39 NO WITHDRAWAL NO WEIGHT GAIN 97% PROVEN SUCCESS RATE 10-YEAR WRITTEN GUARANTEE! MAJOR BREAKTHROUGH Top Rated Methods according to Surgeon Generals Report Steven Present, M.S.

ATTEND STEVEN PRESENTS GROUP HYPNOSIS SEMINAR AND STOP SMOKING - QUICKLY EASILY AND PERMANENTLY - IN JUST ONE NIGHT! NON-SMOKER At last, a major break-through. Steven Presents, much easier to stop smoking than in the past. Stop smoking seminar in the 1980's 10 years were TOP RATED IN THE 1980 SURGEON GENERALS SMOKING REPORT.

After his Seminar in 1980, Steven Presents no matter how long you have smokedimagine talking to your friends tomorrow- NEVER AGAIN HAVING THE URGE TO SMOKE! And with Steven's proven system, YOU WON'T EVEN GAIN A SINGLE POUND - GUARANTEED.

You won't experience withdrawal, or become irritable. With Steven Presents advanced system of hypnosis, everyone in the group will be hypnotized - without any sleep. You'll feel relaxed, alert, and in complete control. YOU WILL BECOME A [illegible] Is it hard to believe that after smoking after trying so many times before, that the answer is just to attend one seminar? Join the see for yourself. Even smokers with 30, 40 and year habits - will crash their cigarettes and throw them away - "Pull out that pack" - these will be the smoking, right? 94% WILL COMPLETELY STOP NOW! YOU! BEFORE THE SEMINARS OVER CIGARETTES! YOU WILL BREAK FREE FROM You'll also receive a written 10- car guarantee. If you even think about lighting up within the next 10 years, you can return to a Steven Presents seminar - FOR FREE! And that's not all - If you would like to lose weight, attend our weight loss seminar on the same evening, and your weight loss is in the future - IT'S ABSOLUTELY FREE TO YOU! LOSE WEIGHT - FREE! If hypnosis would like to lose weight without dieting, by eliminating your cravings for sweets, pastries, breads, etc., then attend Steven Presents weight loss session. If you can eat less and lose weight, keep it off! Steven Presents hypnosis After and finally, keep it off! If you are attending only to lose weight, you weight loss seminar. If you are attending only to lose weight, you having a group of friends, each of you will be entitled to a discount. [illegible] SOUTH MIAMI WED., JULY 17 - 7:30 pm Dadeland Marriott Hotel 9090 S. Dadeland Boulevard (S. Dixie Hwy. (US1) to Dadeland Blvd.

turn north, to 1st traffic light, turn left.) Register at the hotel door 6-7:00 p.m.

NORTH MIAMI THURS., JULY 18 - 7:30 pm Howard Johnson Hotel / Golden Glades 16500 N.W. 2nd Avenue (I-95 or Fla. Turnpike to 826 East (to Beaches) 1st traffic light, turn right.) Register at the hotel door 6-7:00 p.m.

SEMINAR FEE IS ONLY $39.99 CASH CHECKS VISA & MASTERCARD ACCEPTED [illegible] BRING A GROUP OF FRIENDS, EACH OF YOU WILL GET A DISCOUNT.

BRING THIS AD FOR A BONUS.

[illegible] With Steven Presents seminar, you can bring your friends and sweets. [illegible] Over 2,000,000 have attended. [illegible] REGISTER AT THE DOOR FROM 6:00 TO 7:00 PM CUT OUT & SAVE - BRING AD FOR SPECIAL BONUS A

Complaint 118 F.T.C.

EXHIBIT B

THE PRESENT SEMINAR — FIRST IN RESULTS! STOP SMOKING IN 2 1/2 HOURS - GUARANTEED! OR DOUBLE YOUR MONEY BACK.

• NO WITHDRAWAL • NO STRESS • NO WEIGHT GAIN $29.99 COMPLETE DON'T MISS THIS CHANCE TO STOP Steven Present, M.S., Dir.

SMOKING FOREVER. ATTEND STEVEN PRESENT'S GROUP HYPNOSIS SEMINAR for its success in changing hard core smokers into ex-smokers. After his seminar, 97% of his clients testify to their ability to throw away their cigarettes and stop smoking. Now you can hear Steven Present's seminar. His proven system will completely break the control that nicotine and cigarettes have over you. You are like the thousands throughout the country who attend his seminars. You too will stop smoking without withdrawal, stress, or weight gain in JUST ONE NIGHT. If this sounds almost too good to be true, here's the proof. The 1988 U.S. SURGEON GENERAL'S SMOKING REPORT STATED THAT GROUP HYPNOSIS IS ONE OF THE MOST EFFECTIVE WAYS TO STOP SMOKING. And with Steven Present's hypnosis, you will be amazed at how easy it is to stop. You will be MOST IMPORTANTLY alert, clear and relaxed. MOST IMPORTANTLY YOU WILL WALK OUT A NON-SMOKER! When you attend this seminar, you will receive Steven Present's double guarantee. If you are not completely satisfied, he will refund double your money on the spot. In addition, he guarantees that if you also receive a lifetime guarantee. That's not all. You also receive, at no extra charge, if you ever want help, you can repeat the seminar, FOR FREE! Stop waiting over $200 a year on cigarettes. For about the price of 2 weeks worth of cigarettes you will be smoke free, always. All it takes is 2 1/2 hours. Make a decision you and your family can live with. ATTEND THIS SEMINAR! YOU'LL BE GLAD YOU DID! SOUTH MIAMI WED., JAN. 30 • 7-9:30 pm Dadeland Marriott Hotel 9090 S. Dadeland Blvd.

Register at the hotel door 6-7:00 p.m.

NORTH MIAMI THURS., JAN. 31 • 7-9:30 pm Howard Johnson's/Golden Glades 16500 N.W. 2nd Avenue Register at the hotel door 6-7:00 p.m.

SEMINAR FEE IS ONLY $29.99 BRING AS MANY FRIENDS AS POSSIBLE. EACH OF YOU WILL GET A DISCOUNT. BRING THIS AD FOR A BONUS. The Present Seminar WEIGHT LOSS/STRESS REDUCTION INCLUDED FREE! CUT OUT & SAVE BRING AD FOR BONUS

AMERICAN INSTITUTE OF HABIT CONTROL, INC., ET AL. 401

395 Complaint

EXHIBIT C

STOP SMOKING IN 2 1/2 HOURS! FOR ONLY $39 99 Complete

NO WITHDRAWAL! NO WEIGHT GAIN! 97% PROVEN SUCCESS RATE! WRITTEN MONEY BACK GUARANTEE!

[illegible]

LOSE WEIGHT-FREE!

FREE BONUS WORTH $20.00 MON. AUGUST 17 - 7:30 p.m.

Best Western Executive Inn TUES. AUGUST 18 - 7:30 p.m.

[illegible] WED. AUGUST 19 - 7:30 p.m.

University Plaza Hotel SEMINAR FEE IS ONLY $39.99 Cash Checks VISA & MASTER AND ACCEPTED

[illegible]

START THE SEMINAR AT 7:00 PM — AND STOP SMOKING BY 9:30 PM YOU WILL BE AWAKE AND AWARE AT ALL TIMES YOUR SUCCESS IS GUARANTEED — IN WRITING YOU WON'T CRAVE CIGARETTES

[illegible]

Decision and Order 118 F.T.C.

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 of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and

The respondents, their attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true, 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 an agreement on the public record for a period of sixty (60) days, and having duly considered the comments filed thereafter by interested persons pursuant to Section 2.34 of its Rules, 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 American Institute of Habit Control, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the state of Florida, with its offices and principal place of business at 9655 South Dixie Highway, Miami, Florida.

Respondent Steven Present is the sole officer, director and shareholder of the corporate respondent. He formulates, directs and controls the acts and practices of the corporate respondent, and his principal office and place of business is the same as that of the corporate respondent.

AMERICAN INSTITUTE OF HABIT CONTROL, INC., ET AL. 403

395 Decision and Order

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

ORDER

DEFINITION

For the purposes of this order, “competent and reliable scientific evidence” shall mean those tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.

I.

It is ordered, That respondents American Institute of Habit Control, Inc., a corporation, its successors and assigns, and its officers, and Steven Present, individually and as an officer and director of said corporation, and respondents’ agents, representatives and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promotion, offering for sale, or sale of any smoking cessation program or weight loss program, including any such program that uses hypnosis, in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

A. Representing, directly or by implication, that the U.S. Surgeon General, in the 1989 U.S. Surgeon General’s Report on Smoking, Reducing the Health Consequences of Smoking: 25 Years of Progress, states that the group hypnosis method used by respondents is one of the most effective ways to stop smoking.

B. Representing, directly or by implication, that ninety-seven percent of the participants who attend respondents’ stop smoking seminars permanently abstain from smoking after those seminars, unless such is the case.

C. Making any representation, directly or by implication, about the relative or absolute performance or efficacy of any smoking

Decision and Order 118 F.T.C.

cessation program or weight loss program, unless, at the time of making any such representation, respondents possess and rely upon competent and reliable scientific evidence substantiating the representation. D. Misrepresenting, directly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test, study, survey or report. E. Misrepresenting, directly or by implication, the performance or efficacy of any smoking cessation program or weight loss program.

II.

It is further ordered, That for three (3) years after the last date of dissemination of any representation covered by this order, respondents, or their successors and assigns, shall maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All materials that were relied upon in disseminating such representation; and B. All tests, reports, studies, surveys, demonstrations or other evidence in their possession or control that contradict, qualify, or call into question such representation, or the basis relied upon for such representation, including complaints from consumers.

III.

It is further ordered, That respondents shall notify the Commission at least thirty (30) days prior to the effective date of any proposed change in the corporate respondent such as dissolution, assignment, or sale resulting in the emergence of a successor corporation(s), the creation or dissolution of subsidiaries, or any other change in the corporation that may affect compliance obligations arising out of this order.

IV.

It is further ordered, That the individual respondent named herein shall promptly notify the Commission of the discontinuance of his

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present business or of his affiliation with the corporate respondent. In addition, for a period of three (3) years from the date of service of this order, the respondent shall promptly notify the Commission of each affiliation with a new business or employment that involves a smoking cessation program or a weight loss program. Each such notice shall include the respondent's new business address and a statement of the nature of the business or employment in which the respondent is newly engaged as well as a description of the respondent's duties and responsibilities in connection with the business or employment. The expiration of the notice provision of this paragraph shall not affect any other obligation arising under this order.

V.

It is further ordered, That respondents shall distribute a copy of this order to each of their officers, agents, representatives, independent contractors and employees who are involved in the preparation and placement of advertisements or promotional materials; and, for a period of three (3) years from the date of entry of this order, distribute same to all future such officers, agents, representatives, independent contractors and employees.

VI.

It is further ordered, That respondents shall, within sixty (60) days after the date of service of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.

Commissioner Owen recused and Commissioner Yao not participating.

Complaint 118 F.T.C.

IN THE MATTER OF

KIWI BRANDS INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 7 OF THE CLAYTON ACT AND SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT

Docket C-3523. Complaint, Aug. 24, 1994--Decision, Aug. 24, 1994

This consent order requires, among other things, Kiwi Brands Inc., a subsidiary of Sara Lee Corporation, to divest its Esquire and Griffin brands of shoe care products and related assets: to Hickory Industries, within one month of the date the order becomes final; or to a Commission approved acquirer, within twelve months of the date the order becomes final. If the sale is not accomplished within the specified time, the Commission would be entitled to appoint a trustee to sell the assets to a Commission approved acquirer in a manner approved by the Commission. In addition, for a period of ten years, the respondents are required to obtain prior Commission approval before acquiring any stocks or assets of any entity engaged in chemical shoe care products.

Appearances

For the Commission: Howard Morse and Naomi Licker. For the respondents: Louis Keilor and Gary Senner, Sonnenschein, Math & Rosenthal, Chicago, IL.

COMPLAINT

The Federal Trade Commission ("Commission"), having reason to believe that respondent, Kiwi Brands Inc., a subsidiary of respondent Sara Lee Corporation, and Sara Lee Corporation have acquired assets of Knomark, Inc., a wholly-owned subsidiary of Papercraft Corporation, and assets of Reckitt & Colman plc in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45; and it appearing to the Commission that a proceeding in respect thereof would be in the public interest, hereby issues its complaint, stating its charges as follows: