Makers of HeightMax ordered to pay $1.9m

By Clarisse Douaud

- Last updated on GMT

Related tags: Ftc, Fraud, Federal trade commission

As part of its assurances that it will be tough on dietary
supplement manufacturers who market with false claims, the Federal
Trade Commission (FTC) has clamped down on a company that allegedly
hid assets to avert paying a full settlement.

Last November FTC charged both Sunny Health Nutrition Technology & Products and Sunny Sia with making false and unsubstantiated claims for three dietary supplement finished products - including HeightMax - marketed to make children and young adults taller. The companies agreed to pay $375,000 while a further $1.6m was suspended by FTC when they showed inability to pay. However, after the federal agency discovered Sunny had kept at least $1.8m in an undisclosed account, it showed potential infringers it means business and enforced the collection of the full $1.9m. The authority has repeatedly indicated it intends to step up efforts to punish those dietary supplement companies that do not respect regulations. It rang in the New Year with a $25m-clamp-down on parties behind the deceptive marketing of four major weight-control supplements: Xenadrine EFX, CortiSlim, TrimSpa, and One-A-Day WeightSmart. Then it its Fiscal Year 2008 Congressional Budget Justification summary, FTC highlighted health products, including dietary supplements, as a key area on which it will be keeping an eye. It also announced it would be investing heavily in a consumer media campaign to educate consumers to be more critical. "Consumer demand for such products is increasing, and fraudulent or deceptive claims about these products can pose risks to consumers' well-being,"​ said FTC in its budget request summary submitted to Congress on February 5.. "Going forward, the FTC will continue its aggressive program by focusing its law enforcement on violations that create the greatest risks to consumer health." ​ Following the initial settlement, FTC found $1.8m Sunny had kept in a PayPal account. Thanks to an avalanche clause in the first judgement that required the redress payment of $1.9m if financial statements were found to be inaccurate. FTC proceeded to freeze the funds by means of a restraining order granted in December. FTC has indicated it will set up a refund program for HeightMax purchasers, using the settlement.

Related topics: Regulation

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