A Medical Device Daily

Two Florida businesses have agreed to a federal court order requiring them to pay up to $20 million in consumer redress – “the largest monetary judgment ever obtained in an FTC health fraud case,” the commission said – to settle charges that they deceptively claimed that their pills and sprays would increase consumers’ human growth hormone levels and provide anti-aging benefits, including weight loss and increased cognitive function. The commission said also that it has issued warning letters to more than 90 Internet marketers making similar claims.

The defendants named in the FTC’s complaint are Great American Products (GAP) and Physician’s Choice (PCI; both Destin, Florida); and certain executives of the companies.

According to the FTC, the defendants’ advertising deceptively claimed that two dietary supplements and two under-the-tongue sprays would increase blood levels of HGH and provide a wide variety of anti-aging benefits.

Citing marketers of modern pills and sprays as treading the same path as “early explorers” searching for the fountain of youth, Lydia Parnes, director of the FTC’s Bureau of Consumer Protection, said, “Unfortunately, no pill or spray can turn back the hands of time.”

The defendants’ HGH enhancers typically sold for $100 for a three-month supply, with total sales exceeding $70 million.

The complaint also challenges health benefit claims for four additional products and alleges that the defendant’s radio and TV infomercials had deceptive formats. In addition, the complaint alleges that the defendants violated the Telemarketing Sales Rule when they sold additional products to consumers who called to order these products.

In other legalities: Soft Computer Consultants (Palm Harbor, Florida) reported that a panel of the American Arbitration Association recently found that the company did not engage in any intentional fraud in connection with the sale and implementation of its software as alleged by former customer Hunter Laboratories (Campbell, California).

Hunter sought damages for fraud and punitive damages which were denied by the panel in May. Soft Computer said that the panel “did award a lesser amount for the business losses during a four month period in which Hunter used portions of the Soft Computer Laboratory Information System [LIS].”

Soft Computer said that the arbitration record showed that Hunter sought to implement Soft Computer’s LIS within six to eight weeks while attempting to lease space, buy laboratory equipment and be operational within a four-month time-frame, Soft Computer said, and that “[c]onflicts arose, and less than 30 days after Hunter went live with Soft Computer’s LIS . . . Hunter threatened litigation against Soft Computer.”

Soft Computer develops laboratory software for hospitals and commercial laboratories in North America.