TRENTON, N.J.-- Dietary Supplement distributor Goen Technologies (GTC) will pay restitution to customers duped by a bait-and-switch advertising scheme designed to sell dietary supplements marketed for weight loss.
According to a release from the New Jersey Office of the Attorney General, the suit was filed in 2003 by Attorney General Peter C. Harvey on behalf of customers who bought into a veiled attempted to boost sales of GTC supplements.
Advertisements encouraged viewers to pay $59.99 for hypnosis-based seminars designed to help participants lose as much as 120 pounds a year or stop smoking, then pitched dietary supplements marketed for weight loss, including then ephedra-based "TrimSpa," an earlier release from the Attorney General's Office stated.
Under the terms of the settlement, GTC, distributor of TrimSpa and other products, agreed to revise its marketing practices and to recompense customers who filed complaints with the Division of Consumer Affairs. The company also will pay the state $750,000 under terms of the agreement and will be required in future marketing practices to disclose whether any supplements are recommended as a part of its seminars, according to the Attorney General's Office.
“When GTC analyzed the potential costs involved in defending what GTC believes is a litigation without merit, the Company made the reasonable business decision to resolve the lawsuit, as costs of this litigation would have significantly exceeded the amount the Company paid under the terms of the settlement,” said Alex Goen, chief executive officer of GTC, in a release.
The terms of the settlement "have no impact" on GTC and the products it is currently marketing, according to GTC's release. “The bottom line is that the settlement requires GTC to do nothing different than it is presently doing in its advertising or product development," said Goen. "The Company’s internal practices and policies ensure that GTC is delivering only the very best to consumers, which is underscored by the fact that X32 and the Company’s two newest products, TrimSpa Ultra and TrimSpa Energy, are backed by IRB-approved double blinded, placebo controlled clinical studies."
The original complaint against GTC alleged that Alex Szynalski, founder of Goen Seminars Institute Inc., and other defendants made unsubstantiated claims about dietary supplements marketed for weight loss. The claim that TrimSpa metabolizes fat or regulates blood sugar is not validated by scientific research, according to the State's complaint. While a patent application for TrimSpa identifies glucosamine as an active ingredient that "blocks the effect of insulin, burning up stored fat and resulting in weight loss," clinical studies have found that glucosamine infusion in humans has no effect on insulin, the earlier release by the Attorney General's Office stated. The original complaint also alleged that there was no scientific basis for defendants' claims that CarbSpa "reduces absorption of carbohydrates" and that Lipo Spa "sucks the fat right out of food you eat before it can get to your hips, thighs, waist, neck or arms" and is "liposuction in a bottle," according to the same release.
"The only thing that was deliberate and systematic was the defendants' deception," said Attorney General Harvey in a statement regarding the original complaint. "The seminars were just a veiled attempt to sell Goen supplements. What's even more troubling is that the defendants hawked these supplements without clearly warning consumers about the potentially life-threatening side effects of products containing ephedra, such as TrimSpa."
