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SALT LAKE CITY (AP) -- Utah dietary-supplement maker Basic Research has agreed to pay $3 million in fines to settle complaints by the Federal Trade Commission that it made deceptive claims to sell fat-dissolving gel and weight-loss pills for children.
The agreement prohibits the firm from making unsubstantiated claims in the future.
"The Federal Trade Commission views it as a very favorable settlement with very strong injunctive relief and monetary relief," Laureen Kapin of the FTC's enforcement division told The Salt Lake Tribune.
Basic Research said it did not admit wrongdoing, and agreed to pay the fines to bring the litigation to an end.
"You're going to pay that money, so the intelligent thing, in our opinion, was to use it to buy peace with the FTC rather than pay lawyers to litigate into the indefinite future," Richard Burbidge, an attorney for Basic Research, told the newspaper.
In June 2004, the FTC alleged that Basic Research and other affiliated companies made misleading claims about Tummy Flattening Gel, Cutting Gel and Dermalin APg. The company claimed it could be rubbed on to melt away fat.
Two pill supplements, Leptoprin and Anorex, were marketed by the company for dieters who wanted to shed more than 20 pounds. And PediaLean, a fiber pill, was billed as causing substantial weight loss for children.
The FTC questioned the scientific backing for the claims.
Between 2000 and 2004, Basic Research sold nearly $66 million worth of the six products, with Leptoprin bringing in nearly $25 million in 2003 alone.
Burbidge said the company has stopped marketing all of the products.
(Copyright 2006 by The Associated Press. All Rights Reserved.)
