Field Reports1 Oct, 2003 By: Thomas Haire, Michael Kokernak, Digby Orsmond Response
TruStar's Trudeau Takes a Stand on FTC Case
Kevin Trudeau is a well-known DRTV host and is founder of TruStar Global Media, headquartered in Leeds, England. While his companies have generated more than $2 billion in worldwide sales, Trudeau has also had a number of run-ins with the Federal Trade Commission (FTC), most recently over his appearance on the infomercial for Coral Calcium. Recently, Trudeau discussed his side of the story in the most recent case, as well as get his thoughts on how the FTC and the DRTV industry could better work together to avoid the high-profile suits that have become the FTC's trademark.
Response: From your perspective, can you describe what occurred with FTC's involvement with Coral Calcium?
Kevin Trudeau: I produced an infomercial for Coral Calcium. Another company obtained a master of the tape and began to broadcast it without authorization. I attempted to stop them from broadcasting the show, because I believed that version needed some editing to make it compliant. I sent a copy of that show to the FTC stating that I was not running the show, it was being run without authorization, and it needed editing to be compliant. The FTC responded that they had no interest in the show or product. I communicated with the FTC on several occasions, and they repeatedly said that they had no interest in the show.
I then produced my own version of the show, which I believed was totally compliant, based on my legal team's review, and sent a copy of this new show to the FTC. Again, the FTC responded that they had no interest in the show. More than a year and a half passed and the FTC never sent any correspondence to us requesting any information regarding the Coral Calcium shows.
Then, with no warning, the FTC filed a lawsuit demanding a freeze of all assets, the immediate pulling of the show, and a receiver to be put in charge of the company. Interestingly enough, the company that was running my show without authorization was not sued. We fought the FTC and the judge did not grant the FTC's temporary restraining order request. In the research, the FTC wins more than 99 percent of all requests for temporary restraining orders. I see my victory there as a huge win, not only for me but also for the industry. We then voluntarily agreed with the FTC to a preliminary injunction, made some minor edits to the show, and the new Coral Calcium show should be back on the air within weeks.
Response: When do you expect a final resolution to the case?
Trudeau: Negotiation is always better than litigation. If we can negotiate a reasonable settlement, it should be resolved by the end of the year. However, I will not negotiate a settlement just for the sake of settlement. I am looking forward to my day in court. A trial date on the injunction is set for February and, if a negotiation that is reasonable and fair cannot be reached, I will be thrilled to present my case in a federal court - not the kangaroo court at the FTC headquarters.
Response: Do you believe the FTC has targeted you?
Trudeau: I absolutely believe the FTC has targeted me. Around the world, I have been accused of false and misleading advertising; however, in every resolution there has been no finding or admission of any wrongdoing. And I have never paid a penny in fines or consumer redress.
I do not and have never practiced any misleading advertising, as alleged by the FTC. How can the FTC state that I am making unsubstantiated claims, when they do not ask for the substantiation I have before they make that statement? The fact that the other company that was running the Coral Calcium show without authorization was not sued proves I am singled out.
Response: Do you believe you can still be an effective voice for the industry as a whole, as well as an effective infomercial host, or has your reputation been tarnished by these FTC actions?
Trudeau: I do not believe my reputation has been tarnished by repeated FTC action. Has Microsoft's reputation been tarnished by FTC action? Has Sears' reputation been tarnished by FTC action? I have always been an effective infomercial host, because people know that what I am saying on TV is what I truly believe. I do not read scripts. I sell and promote products that I use and believe in 100 percent.
My reputation with my customers is outstanding. We have one of the lowest return rates of any direct response company in the world. We have one of the highest customer satisfaction rates and one of the highest repeat customer order rates.