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HELSINKI FORMULA ANTI-BALDNESS ADS "FALSE AND DECEPTIVE," FTC CHARGES

Executive Summary

HELSINKI FORMULA ANTI-BALDNESS ADS "FALSE AND DECEPTIVE," FTC CHARGES in a complaint filed in Los Angeles Federal Court Nov. 18 against Helsinki manufacturer, Pantron I. The Federal Trade Commission (FTC) alleges that advertising for the five year-old hair care product line is "false and deceptive" in its claims to prevent or cure baldness, including male pattern baldness, and to grow hair, and that the ads deceptively cite as "competent and reliable" tests which claim to substantiate the product's alleged antibaldness results. According to the complaint, FTC is charging that several claims are false and deceptive, including: "Loss of hair reduced within two to three weeks from start of treatment." The ads also state: "All [test] results were positive and concluded that the Helsinki Formula was, indeed, a valid treatment for hair loss." FTC's complaint also charges that advertising for Helsinki Formula includes claims that the product "is an effective remedy for baldness...in a large majority of cases"; "curtails hair loss, thus relieving or preventing baldness"; and "promotes the growth of new hair ... thus curing or reversing the advance of baldness on persons including those...who have become totally bald." The complaint is based on two 30-minute "advertorial" format TV ads called "Discover" and "Robert Vaughn Discovers." Vaughn is an actor who has served as spokesperson for Helsinki Formula. The ads offered the products via direct mail. The products' active ingredient is polysorbate. FTC is seeking preliminary and permanent injunctions against Pantron I, two related companies - Pantron I Corp. and Pantron III Corp. - as well as against Hal Lederman of Toluca Lake, Calif., whom FTC alleges controls the firms. The commission is also asking the District Court to "order the defendants to pay refunds to consumers," who have "suffered `substantial monetary injury'" while Pantron has "received and continue[s] to receive substantial unjust enrichment." FTC's Seattle Regional Office is handling the case. Pantron I's legal troubles continue to mount. In addition to the FTC complaint, the company is involved in a lawsuit with Rogaine marketer Upjohn. Upjohn sued Pantron I in October, charging the company with making illegal and false claims that Helsinki Formula was just as effective as the firm's prescription anti-baldness drug. Pantron responded Nov. 17 with a countersuit filed in Las Vegas District Court charging Upjohn with "violation of the Sherman Act; trade libel; unfair competition; and intentional interference with business relations." Pantron has also been the subject of a U.S. Postal Service investigation. The company received a consent order from the Postal Service last December that resulted in Pantron discontinuing ads that claim Helsinki Formula "prevents excess hair loss and promotes new hair growth."
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