Blue Stuff, Inc., McClung Advertising, Inc. and their president, Jack McClung have agreed to pay $3 million to settle Federal Trade Commission charges regarding unsubstantiated claims about products sold via infomercials and online.
The FTC alleged that the Oklahoma City-based defendants made unsubstantiated pain relief claims for Blue Stuff and Super Blue Stuff topical creams in infomercials shown nationally through most of 2001 and the first half of 2002, as well as on the Blue Stuff Web site. In addition to the monetary fines, the proposed settlement requires the defendants to possess “competent and reliable scientific evidence” to support future claims about the benefits of their products.
The complaint filed in federal district court by the FTC also alleges that the defendants marketed and sold two other products using false claims: Essential Stuff, a dietary supplement purported to reduce cholesterol, and Her Stuff, a topical cream the defendants’ ads claimed would slow or reverse bone loss.
In a statement, FTC Commissioner Orson Swindle noted that he would have preferred that the FTC pursue all entities that received funds derived via “the defendants’ alleged deceptive practices” and required those entities to “turn over those funds for consumer redress.” He cited the Lloyd B. McClung Foundation, a non-profit founded by defendant Jack McClung, as one such entity.
“Although it may be unusual to pursue a charitable organization to recover funds it received, I believe the facts of this case would warrant that approach,” said Swindle, noting that both Blue Stuff Inc. and McClung are sponsors of the foundation and contribute the maximum amount allowed by law. “Regardless of any good work performed by this charitable organization, the foundation should not be permitted to keep money that rightfully belongs to deceived consumers.”
Yesterday, the Food and Drug Administration issued a warning letter to Blue Stuff, Inc. advising the company that it’s marketing of Blue Stuff and other products is in violation of the Federal, Food, Drug, and Cosmetic Act.
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