Advertising law news briefs.
Advertising law news briefs.
Your News Your Way: Every Day!


Note:This website is where you can find advertising law information based on archived news briefs from past issues of Advertising Compliance Service. These archived advertising law-related news briefs were published in Advertising Compliance Service in May 2004.





Advertising Disclosures
Car Ads
Car Loans
Children's Ads
Comparative Ads
Consumer Lease
Deceptive Pricing
Diet Programs
Diet Supplements
E-Mail Ads
Eye Care
Eye Surgery
Food Ads
Health Claims
Hearing Aids
Home Financing
Indoor Tanning
Internet Ads
Internet Mktng.
Infertility Svcs.
Made in USA #1
Made in USA #2
Made in USA #3
Made in USA #4
MLM #1
MLM #2
Precious Metals
Retail Electricity
Timeshare Tips
Use of Word "Free"
Vacation Plans
Varicose Veins
Yellow Pages

Our Related Websites

Advertising Compliance Service

Advertising Substantiation

Ad Substantiation

Green Advertising Law

Political Advertising Law


FTC Chairman, Timothy J. Muris, will leave the Federal Trade Commission this summer. In announcing his decision, Chairman Muris said:

"Serving as Chairman of the Commission has been the greatest honor of my professional career. I deeply appreciate the trust that President Bush placed in me by providing this opportunity to serve. As I have said repeatedly, the mission of the agency is vital; the issues are fascinating; and the people are outstanding. It is a great pleasure to work with such superb fellow Commissioners and staff."

President Bush's nominee to replace Muris is Deborah P. Majoras. Muris said that Majoras is "a highly talented and experienced lawyer, and, if confirmed by the Senate, would be an excellent Chairman."

(Statement of Federal Trade Commission Chairman Timothy J. Muris, May 11, 2004.)


Greeting Cards of America, Inc. (GCA), and its owners, Gerald Towbin and Susan Towbin, are banned from advertising or selling any franchise, business venture, or business opportunity as part of a settlement with FTC. The Commission alleged that the defendants, as well as American Eagle Placements and its owner, Forrest Adams, used deceptive tactics in selling greeting card display rack business opportunities. In addition to the ban, the settlement bars the GCA defendants from making material misrepresentations in connection with the sale of any goods or services, and requires them to pay more other $400,000 in consumer redress.

NOTE: This stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Stipulated final judgments have the force of law when signed by the judge.

(Federal Trade Commission. v. Greeting Cards of America. Inc., et al., United States District Court for the Southern District of Florida, Case No. 03-60746-civ-gold, FTC File No. X030044, Civil Action No. 03-60746-Civ-Gold, May 13, 2004.)


By a vote of 5-0, FTC approved two final consent orders related to its case against Vital Basics, Inc., Robert B. Graham, and Michael B. Shane; and Creative Health Institute, Inc., and Kyl L Smith. In these cases, marketers of certain supplements agreed to settle FTC charges that they made many unsubstantiated advertising claims for the products.

FTC's action comes after a public comment period on the proposed consent orders, during which FTC didn't receive any comments.

(FTC Announced Action for May 4, 2004; see also, Advertising Compliance Service, Tab #17, Food, Drugs, Cosmetics, Article #98.)


"Tens of thousands of consumers who were victims of, an Internet pyramid scam disguised as a legitimate business opportunity, may qualify to share in a $20 million court-ordered redress fund," according to FTC. Consumers who invested in will be notified by e-mail from the court-appointed fund administrator that they may qualify to share in the redress fund.

In June 2001, FTC filed suit charging that the defendants promoted a work-at-home business opportunity with claims of quick riches. In sales presentations, seminars, teleconferences, website presentations, and other marketing material, defendants touted the opportunity to earn thousands of dollars a week by recruiting new "Associates" into the program. The cost to join the SkyBiz Program was as much as $125, supposedly used to buy an "e-Commerce Web Pak" but in reality it was to buy the right to receive compensation for recruiting additional participants. According to FTC, defendants urged participants to invest in more than one "Web Pak" to maximize their earning potential.

FTC charged that--

the claims that consumers who invested in SkyBiz would make substantial income were false;

failure to disclose that most people in pyramid schemes lose money was deceptive;

defendant provided the means and instrumentalities for others to deceive consumers by providing speakers and promotional materials that made the false and misleading claims; and

SkyBiz was actually an illegal pyramid scheme.

All four acts violate the FTC Act.

Defendants agreed to a settlement that provided $20 million for consumer redress and bars all the defendants from taking part in pyramid schemes or misrepresenting the amount of sales, income, profits or rewards of any future business venture. The settlement permanently bars Nanci Corporation from engaging in, advertising, or selling any multilevel marketing program. The settlement bars Elias F. Masso from engaging in any aspect of multilevel marketing for 22 years, James S. Brown for 10 years, and Kier E. Masso for seven years.

The settlement bars all of the defendants from providing others with the means and instrumentalities to make false and misleading statements. In addition, the settlement requires that when the defendants make any claims regarding earnings, profits, or sales volume for future marketing programs, they disclose the number and percentage of participants who have made a profit through the program and disclose the average and median amount of money made.

(FTC. v. Skybiz.Com, Inc., et al., (Dist. Ct., N.D. Oklahoma, FTC File No. X01 0046, May 14, 2004.)


A federal district court granted FTC's motion for summary judgment in its case against Peter J. Porcelli, II and several of his companies, including Bay Area Business Council, Inc. and American Leisure Card Corp., and issued a permanent injunction against the defendants. The defendants offered consumers guaranteed low-interest unsecured MasterCard credit cards for an advance fee. The defendants, in their sales calls to consumers, specified a certain amount for a "one-time processing" fee, but charged consumers additional undisclosed fees, according to FTC. The judge granted FTC's request for summary judgment, and ordered the defendants to pay $12,563,962.34.

The court order stems from FTC charges filed in August 2002.

In his ruling, U.S. District Judge John W. Darrah found that "the undisputed facts established" that the defendants:

made false or misleading statements to induce consumers to purchase credit cards with substantial credit limits for an advance fee,

never provided, nor intended to provide, any credit cards, and

demanded payment of additional undisclosed fees, all in violation of the FTC Act and the Telemarketing Sales Rule.

The court also found that Peter Porcelli and Bonnie Harris were intimately involved in the enterprise and knew about the deceptive practices.

The court's final order bans the defendants from telemarketing, and from selling credit-related products. The order bars defendants from making the types of misrepresentations cited in FTC's complaint. The order further bars defendants from misrepresenting any fact material to a consumer's decision to purchase the defendants' products or services.

(Federal Trade Commission v. Bay Area Business Council, Inc., et al., (Northern District of Illinois, Eastern Division), FTC File No. X020103, Civil Action No. 02 C 5762, May 13, 2004.)

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
















Main Archived News Index:

1996 | 1997 | 1998 | 1999 |
2000 | 2001 | 2002 | 2003

Archived 2003 News:

January | February | March | April | May | June July | August | September | October | November | December



Advertising Compliance Service...

Advertising Compliance Service.



JLCom Publishing Co., L.L.C. is the publisher of Advertising Compliance Service™. For over 34 years (1981-2015),Advertising Compliance Service™ was the authoritative - and comprehensive - source of information for advertising law practitioners, advertisers and advertising agencies -- and their attorneys. One of the 27 advertising law-related topics that were regularly covered by this newsletter/reference service was found in Tab #1, the Bulletin section, and is entitled, "Brief News of Note."

JLCom Publishing Co., LLC, publisher of Advertising Compliance Service, a newsletter / reference service for advertising law attorneys, including in-house counsel and outside counsel, to help them make sure their advertiser clients comply with laws involving false, unfair and deceptive acts.

© Copyright 2004-2014 JLCom Publishing Co., L.L.C. All rights reserved.

IMPORTANT NOTICE: Materials included in this Web Site are intended for general information purposes only and are not intended to provide - and do not constitute - legal or other advice. Persons who need legal or other services should contact a duly licensed professional. The inclusion of links on this Website are to Websites that are maintained by third parties over whom JLCom Publishing Co., LLC has no control. Such links do not imply endorsement of the material that's contained therein. JLCom Publishing Co., LLC makes no claims, representations, or warranties as to the accuracy, completeness, or appropriateness of these Web Sites or the information these websites contain. Read this disclaimer and our privacy statement before using this site.