Kevin Trudeau, an oft-seen face on the infomercial circuit with a history of run-ins with consumer protection authorities, sued the Federal Trade Commission on Feb. 28 over a press release about him that the agency issued in 2004.
Trudeau seeks damages estimated in the “many millions of dollars” and an injunction against the FTC for breach of contract, said his lawyer, David Bradford of Chicago. The press release violated the terms of a settlement between Trudeau and the FTC by implying Trudeau committed wrongdoing when the terms expressly stated that he made no such admission, according to the suit.
Trudeau said he is standing up against what he considers a campaign of retaliation by the FTC against him for critical public comments he has made about the agency.
“It's making false and misleading statements against companies,” Trudeau told DM News. “It's breaking its own rules. Somebody has to stand up and say this agency is out of control.”
The FTC issued the press release Sept. 7 with the headline, “Kevin Trudeau Banned From Infomercials.” It details how a complaint of false and misleading claims against Trudeau resulted in a $2 million settlement and an injunction against him.
According to the release, Trudeau made false claims about the benefits of his coral calcium and Biotape products — that coral calcium could cure cancer and other illnesses and that Biotape provided permanent relief from severe pain. The release also explained how he was “broadly banned” from appearing in, producing or disseminating infomercials.
Trudeau's lawsuit takes issue with the release, including the headline, which is wrong because he still can do infomercials for his book, “Natural Cures 'They' Don't Want You to Know About,” Bradford said. The main body of the release states that infomercials for books, newsletters and informational publications are exempt from the ban.
The press release implies that Trudeau is a “habitual false advertiser,” Bradford said, a false charge that damages Trudeau's reputation and makes it hard for him to do business. Trudeau has never been found to have committed false advertising, according to Bradford.
The FTC implied the $2 million was a fine or penalty, Bradford said, but the money went to consumer redress, and Trudeau has always offered an unconditional money-back guarantee to customers. The FTC implied in the release that all the charges against Trudeau were true, when the settlement explicitly states that there was no finding of wrongdoing, according to Bradford.
Press releases such as the one published by the FTC about Trudeau are common. It's rare for the subject of the release to sue over it.
“Challenging them is unusual,” Bradford said. “Very few people have the courage or resources to take the FTC head on.”
No stranger to controversy or the law, Trudeau has been the subject of numerous investigations by the FTC and state attorneys general. He paid $500,000 in consumer redress in 1998 to settle an FTC complaint concerning his Mega Memory System.
The Wall Street Journal reported in 1996 that Trudeau previously spent two years in prison for credit card fraud. That revelation hurt the stock price of Nutrition for Life International, a multilevel marketing firm of which he was a top recruiter.
An FTC spokeswoman said the agency had no comment about Trudeau or the lawsuit. Trudeau, in an interview with DM News, had plenty to say about the FTC, including:
· He alleged that FTC officials told him they had orders from above to single him out for enforcement actions and that the agency had launched numerous covert investigations of him to drive him out of business.
· He accused the FTC of “squashing” small, independent companies that offer competitive products and threaten major corporations. According to Trudeau, the FTC particularly has gone after marketers of natural products — the type he has promoted and sold — to protect pharmaceutical companies.
· He claimed that he decided to settle in the coral calcium case only when FTC officials told him they would go to trial unless it “looked like” they had won. To settle the case, Trudeau had to transfer real estate — an investment property, he said — to the FTC instead of cash to make the settlement amount seem bigger than it was.
· Trudeau said he also gave up a rare Mercedes SL55 in the settlement because one FTC commissioner was a “car fanatic.”
Trudeau said his main goal in challenging the FTC is to get a level playing field for independent marketers such as himself. Major advertisers regularly use paid actors and make unsubstantiated claims, but never get questioned by the FTC, he said.
“They're reading a script and telling you things that are false,” he said. “If you did the same things in a direct response ad, they would charge you with fraud.”
Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters