On June 20, the Federal Trade Commission (FTC) announced that AVS Marketing, Inc., and its president, William R. Heid, have agreed to pay $400,000 in consumer redress to settle FTC charges that they deceptively marketed a purported weight-loss pill called “Himalayan Diet Breakthrough.” According to the FTC, the defendants claimed the product causes rapid and substantial weight loss without the need to diet or exercise. The FTC alleged that the defendants’ ads for the product used five of the seven bogus “Red Flag” weight-loss claims. The ads appeared in the Dallas Morning News, the Albuquerque Journal, Hair Cut and Style, the Cleveland Plain Dealer, the San Francisco Chronicle, and various other publications. The FTC’s ongoing “Red Flag” education campaign provides guidance to assist media outlets and others in spotting false claims in weight-loss ads. In addition to paying consumer redress, the settlement prohibits the defendants from misrepresenting the efficacy or safety of any food, drug, dietary supplement, device, or health-related program.

The FTC filed charges against the Illinois-based defendants in October 2004, as part of “Operation Big Fat Lie.” The FTC alleged that the defendants made false and unsubstantiated claims for the “Himalayan Diet Breakthrough,” a dietary supplement containing Nepalese Mineral Pitch, “a paste-like material” that “oozes out of the cliff face cracks in the summer season” in the Himalayas. The defendants claimed the product causes rapid and substantial weight loss without dieting or exercise; causes users to lose substantial weight while still consuming unlimited amounts of food; causes substantial weight loss by preventing the formation of body fat; causes substantial weight loss for all users; and enables users to lose as much as 37 pounds in eight weeks safely.

The stipulated final judgment and order announced today prohibits the defendants from making false or unsubstantiated claims about weight-loss products or other products in the future. The order contains a judgment for more than $4.9 million, the total amount of sales for the product at issue. Based on a review of the defendants’ financial information, it has been determined that they are unable to pay full redress. The order suspends the judgment upon payment of $400,000 to the FTC. If it is found that the defendants misrepresented their financial condition, the full $4.9 million will become due immediately.