Field Reports1 Sep, 2008 By: Thomas Haire Response
FTC Seeks Up to $55 Million in Fed Court Ruling Against ITV Direct
By Jacqueline Renfrow (firstname.lastname@example.org)
BEVERLY, Mass. — In mid-July, U.S. District Court Judge George O'Toole Jr. ruled that two infomercials produced by ITV Direct Inc. and Direct Marketing Concepts, commonly owned by Donald Barrett, were deceptive. The Federal Trade Commission (FTC) is asking for up to $55 million in restitution from the companies for advertising that their herbal supplements cured cancer.
The FTC alleged that Barrett and six other parties violated the FTC Act with deceptive claims made on the infomercials for Coral Calcium Daily, produced by Direct Marketing Concepts Inc., and Supreme Greens with MSM, produced by ITV Direct Inc.
In the ruling, the FTC won on six of eight counts against the defendants, while the other two counts remain undecided. The first two counts were in regards to the Coral Calcium infomercial and ITV's Web site. The third accused the defendants of reporting that medical journals supported the suggestion that calcium could cure cancer. Other counts were in regard to the Supreme Greens with MSM infomercial and its claims.
ITV's attorney Michael Sciucco suggested in a written statement that the company may be willing to settle on the two remaining counts involving charges that the "talk show" format of the ads and the company's automatic shipping program violate federal regulations.
"We are disappointed with the court's decision," says Sciucco. "However, as the case began over four years ago, the best thing for our customers and the company is to put this dispute behind us once and for all."
The products first came under scrutiny in 2004 and, soon after, the FTC won a preliminary injunction that forced ITV and Direct Marketing Concepts to pull the ads, one of which featured infomercial pitchman and long-time FTC target Kevin Trudeau. In a counter move, Barrett then filed a suit against the FTC claiming his right to freedom of speech, but O'Toole dismissed that suit.
Just weeks after the ruling, ITV Ventures laid off 56 employees. The Better Business Bureau has received 1,570 complaints about Direct Marketing Concepts in the past three years.
The judge has not yet set a date for a hearing on restitution in the case.