Diet Formula Marketer Confident of SettlementMark Nutritionals, under fire from the Federal Trade Commission and state attorneys general over direct-response radio advertising for its diet supplements, said last week it is negotiating to settle the claims out of court.
The company has reached an agreement with the FTC, which has been investigating it since the fall, and is confident that by working cooperatively it can settle claims and address the concerns of several state attorneys general, said Larry Cochran, CEO of the San Antonio company.
The FTC seeks changes to the company's ad claims and unspecified remuneration for consumers who bought the Body Solutions diet products. A temporary injunction agreed to by Mark Nutritionals changed the product name from "Body Solutions Evening Weight Loss Formula" and restricted how the company uses third-party endorsements.
According to the FTC, Mark Nutritionals advertised the Body Solutions product on 650 radio stations in 110 U.S. cities. The company used radio disc jockeys to give testimonials that the product let consumers lose weight while they sleep -- even if they consume a high-calorie diet -- with no diet or exercise, a claim that cannot be substantiated by science, the FTC said.
Mark Nutritionals, which filed for Chapter 11 bankruptcy protection in September, said it has made progress toward reorganization. The company said it had hired a new management team to present a reorganization plan to creditors by year's end.