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FTC orders Seasilver makers to pay $120mn

By Clarisse Douaud , 25-Jul-2006

The FTC has ordered the makers of 'cure all' Seasilver to pay almost $120mn for failing to comply with an earlier order to reimburse consumers - thereby signaling to infringing companies that it stands by its rulings.

In 2004, Seasilver USA and Americaloe agreed to pay $3mn in consumer redress, following Federal Trade Commission allegations that claims they made were false and unsubstantiated. At the time, the $120mn sum was set out in a suspended judgment, which would come into effect if the defendants did not make the agreed payments.

While Seasilver USA and Americaloe did in fact comply with some of the 2004 FTC judgments, the FTC's most recent ruling shows the regulatory body means to be taken 100 percent seriously even within the complex legal framework of the dietary supplement industry.

In ads, the Seasilver marketers had claimed the liquid dietary supplement - which contains aloe vera, phyto-silver sea vegetables, herbs, cranberry concentrate, and other ingredients - was clinically proven to treat or cure 650 diseases, including cancer and AIDS, as well as caused rapid, substantial, and permanent weight loss without dieting.

"The claims for Seasilver threatened consumers' health by encouraging delays and replacements for proven treatments," said director of FTC's Bureau of Consumer Protection Howard Beales at the time. "The FTC and FDA are committed to taking aggressive action against false and unsubstantiated claims in the dietary supplement market".

To date, Seasilver and Americaloe have paid less than $1 million of the consumer redress they agreed to pay. According to the FTC, under the Court's order, the Seasilver marketers are now severally liable to pay $119,237,000, plus interest, in full.

Seasilver is still marketed over the Internet by Seasilver USA, but without the health claims which brought it so much notoriety. The marketing focus now appears to be centered on supposed customer testimonials.

Under the Dietary Supplement Health and Education Act of 1994 (DSHEA), manufacturers are responsible for ensuring the safety and efficacy of their product before marketing it. This gives products with grandiose claims room to try their luck on the market before they may fall under the radar of the US Food & Drug Administration or the FTC.

FTC's actions against Seasilver and Americaloe were part of Operation Cure All, a coordinated effort among the FTC, the FDA, Health Canada, Canada's Competition Bureau, and state Attorneys General to crack down on "unscrupulous marketers who prey on consumers with serious illnesses" especially over the Internet.

"Products touted as cure-alls almost always cure nothing," said Beales following the initial FTC charges against Seasilver and Americaloe.

Although all the cases under the sweep of Operation Cure All have been closed, the FTC continues to pursue infringers. "We certainly haven't stopped going after companies marketing phony cure-alls," FTC spokesperson Jacqueline Dizdul told NutraIngredients-USA.com.