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Posted September 15, 2005

Weight Loss Pill Marketer in Settlement with New Jersey Attorney General

On August 16, 2005, New Jersey Attorney General Peter C. Harvey and Consumer Affairs Director, Kimberly Ricketts, announced that Goen Technologies Corp. and related companies ("Goen"), which allegedly lured consumers to weight-loss and stop-smoking seminars by promoting hypnotism as a drug-free alternative, have agreed to pay restitution to the consumers who filed complaints with the Division of Consumer Affairs and revise marketing practices. In addition to customer restitution, Goen will pay the State $750,000 to fund future consumer initiatives and to pay its investigative costs. While promising drug-free help through hypnosis, the State alleged in its lawsuit that the undisclosed purpose of the seminars was to sell Goen dietary supplements including TrimSpa and Lipo Spa.

Under the settlement, which contains no admission of liability or wrong-doing, Goen is required in its ads or promotions for any future weight-loss or stop-smoking seminar, to:

- disclose the costs of attending the seminar;

- disclose the costs of any supplements that are recommended as an integral part of the program;

- and disclose the costs of contacting a medical professional to determine whether the program is a safe and effective approach to weight loss.

"Consumers are entitled to know all the relevant facts before buying a product, especially for a product that can directly impact the health of the purchaser," Attorney General Harvey said. "We alleged that Goen failed in its disclosure obligation by downplaying the risks and exaggerating the benefits of its products. Goen also suggested in its ads that a federal patent for one of its products equated to a government endorsement of the safety and effectiveness of that product, which is certainly not true."

The Goen settlement is the second such agreement reached in the past month with the manufacturer of a weight-loss supplement. Nutraquest Inc., formerly known as Cytodyne Technologies Inc., and related companies also agreed to revise their marketing and advertising practices and to contribute to a $940,000 settlement with the State. A third lawsuit filed against another dietary supplement manufacturer, N.V.E. Inc., is pending.

The Goen agreement contains other provisions, including:

- Not representing that any Goen supplement or weight loss product by itself works for all overweight users; by itself causes permanent weight-loss; or by itself causes rapid and substantial weight loss without the need for diet or exercise;

- Unless competent and reliable scientific evidence substantiates the representation, not representing that any Goen supplement causes weight-loss or fat loss; enables users to lose any specific amount of weight or fat; enables users to lose weight or fat without caloric reduction or exercise; enables users to lose a specific amount of weight in a specific amount of time; or causes weight loss via a specific biomechanical mechanism;

- Not representing that any weight-loss product is X% or Y times more effective than another product, unless competent and reliable scientific evidence substantiates the claim;

- Not making any offer to sell a weight-loss product without clearly and conspicuously disclosing that the product should be used with diet and exercise, unless there is competent and reliable scientific evidence that substantiates the claim;

- Not representing that a specific person or endorser achieved a specific amount of weight-loss without having a sworn statement from the person or endorser that discloses detailed information about their use of the product;

- Not representing that the endorser achieved better results through use of a weight-loss product compared to another product or by diet and exercise alone, unless a sworn statement from the endorser supports the representation;

- Not representing that a weight-loss product has been clinically proven or clinically tested to be safe or effective without competent and reliable scientific evidence;

- Not misrepresenting any clinical test or study; and

- Not representing that a patent is evidence that a product is safe or effective.