USN Phedra-Cut Hardcore – ASA Ruling

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Posted 10 June 2013

This is a convoluted ruling and essentially consist of two aspects:

1. A new complaint ruling by the ASA against USN Phedra-Cut Hardcore, and

2. An appeal by USN against sanctions being instituted against USN.

Difficulty to exactly fathom out the result of the appeal – appears that the Appeal committee accepted that USN should have been consulted prior to sanctions being instituted, but nonetheless will impose sanctions but first requesting from USN what sanctions they feel are appropriate!

USN Phedra-Cut Hardcore / HA Steinman / 20411 (ASC)
Ruling of the : Advertising Standards Committee
In the matter between:
Dr Harris Steinman Complainant(s)/Appellant(s)
Ultimate Sports Nutrition (Pty) Ltd Respondent

05 Jun 2013

http://www.asasa.org.za/ResultDetail.aspx?Ruling=6577

Dr Steinman lodged a consumer complaint against claims appearing on the respondent’s packaging for its “PHEDRA-CUT HARDCORE AGGRESSIVE WEIGHT CONTROL AGENT”.

The packaging carries a sub-heading “MAXIMUM DURATION” and claims that the product is “Scientifically formulated to help burn fat, and crush appetite & constant cravings”. It adds that it “Delivers long lasting explosive energy and mental focus”. Similar claims are made on the back of the packaging.

COMPLAINT
The complainant argued that the claims give consumers an impression that the product has been “scientifically formulated”, and therefore has been proven effective.

Considering that there is not a single robust study published in a peer reviewed publication that supports any of the claims made for the product or its ingredients, the claims are unlikely to be true, and therefore also misleading.

RELEVANT CLAUSES OF THE CODE OF ADVERTISING PRACTICE
In light of the complaint the following clauses of the Code were considered relevant:

• Section II, Clause 4.1 – Substantiation

• Section II, Clause 4.2.1 – Misleading claims

RESPONSE
The respondent initially replied stating that the complaint would be forwarded to the “R&D department and the directors … and [that it] will get back to [the ASA] …”

After successfully being granted an extension to reply, it responded stating:

“We have taken cognizance of the content of Dr Steinman’s complaint and will amend our advertising material to accommodate his views.

We trust you find the above to be in order”.

ASA DIRECTORATE RULING
The ASA Directorate considered all the relevant documentation submitted by the respective parties.

The ASA has a long standing principle which holds that where an advertiser provides an unequivocal undertaking to withdraw or amend its advertising in a manner that addresses the concerns raised, the undertaking may, at the absolute discretion of the ASA, be accepted without considering the merits of the matter.

On the face of it, it appeared that the respondent’s undertaking may be an adequate resolution to the matter. However, this was only one in a long line of such undertakings provided by the respondent.

In USN Phedra-Cut Lipo XT / MM Davy / 20382 (26 July 2012), the Directorate received a similar undertaking, and ruled as follows:

“While the Directorate is aware that this would potentially address this specific complaint, it cannot ignore the fact that the respondent appears to have a tendency to offer such undertakings when confronted with complaints.

In the past nine years, at least twenty four rulings have been issued where USN was a respondent. Save for those that dealt with issues of compliance, the majority related to allegations that the Code’s provisions on substantiation (Clause 4.1 of Section II) and misleading claims (Clause 4.2.1 of Section II) had been breached. It is therefore safe to say that the respondent has had more than one encounter with the ASA and the provisions of the Code, and could therefore not claim ignorance insofar as the requirements in terms of substantiation are concerned.

In addition, and perhaps more to the point, the Directorate has dealt with the respondent’s Phedra-Cut products on more than one occasion:

In USN / De Castro Ramos & Others / 875 (17 June 2005), part of the complaint related to the respondent’s ‘Phedra-Cut’ product. When taken to task by the complainants, the respondent provided an undertaking to remove the efficacy claims associated with the product pending substantiation. At this time the Directorate accepted this undertaking.

In USN Phedra-Cut / Dr Steinman (3 November 2006), the respondent again undertook to amend the claims to ensure that they do not mislead people. This was accepted at the discretion of the ASA.

In USN Phedra-Cut Accelerator / H A Steinman / 9069 (5 June 2007), the respondent advised that the Phedra-Cut Accelerator product had been discontinued and that no further advertising would appear. The Directorate accepted this as an adequate resolution.

In USN Phedra-Cut Stimulant free / H A Steinman / 9070 (5 June 2007), the respondent’s efficacy claims were again taken to task, and again the respondent confirmed that it would remove and/or change the relevant claims. Here too the Directorate accepted the undertaking.

In USN Phedra-Cut XT / H A Steinman / 10318 (19 December 2007), the respondent again undertook to withdraw its efficacy claims, and the Directorate accepted this, but drew specific attention to the fact that ‘simply undertaking to withdraw advertising each time a complaint is received is not a sufficient resolution’. The Directorate specifically noted … that simply undertaking to withdraw advertising each time a complaint is received is not a sufficient resolution.

Subsequent to this, in a ruling referenced USN Phedra-Cut Stimulant Free / HA Steinman / 9070 (8 April 2008), the respondent was found to have breached the earlier ruling in that the efficacy claims still appeared on its website.

THE SIGNIFICANCE OF THE ABOVE EXPLANATION IS THAT ALL PRIOR DISPUTES, INCLUDING THE CURRENT MATTER, RELATE TO THE PHEDRA-CUT RANGE OF PRODUCTS, AND IN EACH INSTANCE THE EFFICACY CLAIMS RELATED TO FAT BURNING AND WEIGHT LOSS. ADDITIONALLY, EACH DISPUTE RESULTED IN A VOLUNTARY UNDERTAKING TO REMOVE OR AMEND THE ADVERTISING AT ISSUE (our emphasis).

… It appeared from the above history that the respondent has used, and arguably abused the ASA’s leniency insofar as accepting voluntary undertakings is concerned …”

Given this, the Directorate did not accept the undertaking, and found the respondent in breach of the Code’s provisions relating to substantiation and misleading claims.

The ruling ended stating “While no sanctions were called for, and while the Directorate accepts that this is the first adverse ruling against the respondent in recent times, the respondent is reminded that Clause 14 of the Procedural Guide empowers the Directorate to consider voluntary undertakings in calculating which sanctions should be imposed. The Directorate will not take future contraventions of the Code or of previous rulings lightly”.

This matter constituted yet another undertaking that appears to be calculated to merely sidestep adverse decisions or sanctions, and the Directorate rejected the undertaking.

As such, and in the absence of any evidence for the efficacy claims highlighted by the complainant, the respondent’s claims were found to be unsubstantiated, and therefore likely to mislead consumers about the efficacy of the product.

The packaging was therefore found to be in contravention of Clauses 4.1 and 4.2.1 of Section II of the Code.

The respondent was therefore instructed to:

Withdraw the packaging and claims objected to by the complainant

Ensure that the process of withdrawal is effected immediately upon receipt of this ruling

Ensure that the process of withdrawal is completed within the deadlines stipulated in Clause 15.3 of the Procedural Guide, minus the two weeks granted on extension (i.e. the respondent has two months and two weeks to comply)

Refrain from using the packaging and claims again in future.
The complaint was upheld.

Given the respondent’s apparent pattern of providing undertakings as opposed to evidence for its efficacy claims, the Directorate would consider whether or not additional sanctions in accordance with Clause 14 of the Procedural Guide should be imposed on the respondent.

The complainant was therefore afforded ten days from the date of this ruling to comment on whether or not sanctions are warranted, and if so, which sanctions. After this period, the respondent will be afforded an equal opportunity to address the Directorate on this issue after which another ruling (on the issue of sanctions) will be made in accordance with the procedures of the Code.

THE APPEAL
The appellant lodged an appeal against the directorates ruling on the 30th January 2013 through attorneys Hahn & Hahn. The appellant is of the view that the complaint is incomplete and does not comply with clause 3 of the Code. Secondly that if the Directorate was not prepared to accept the appellants undertaking it should have allowed the appellant an opportunity to deal with the merits of the matter. The appellant also suggested that the ASA should not adjudicate on matters which should be before the MCC and finally request a refund of the appeal fee.

RESPONSE
The respondent filed a response on the 1st February 2012. The respondent deals with previous rulings against USN and expounds why there is a proper complaint before the directorate.

Various supplementary documents were filed by the paties on the 28th February and the 5th March 2013.

THE HEARING
The appellant was represented by Mr Stan Bosch a director of the appellant and Alicia Austin Legal Advisor for the appellant. There was no appearance for the respondent

Mr Bosch referred to the documents that had already been filed. Previous ASA Directorate rulings had taken place more than seven years ago. He further explained why the undertaking had been given mainly because the label was going to be changed in any event and therefore it was commercially expedient to give the undertaking. He emphasised the point that the Directorate should have given the appellant an opportunity to make representations if it was not going to accept the undertaking. He further pointed out that the appellant had recently appointed a consultant to assist with compliance to the ASA code which the respondent took seriously.

It was put to the appellant that if the committee were to set aside the Directorate’s decision and accept the undertaking given there would still be two adverse rulings as defined in section 14.8 of the Procedural Guide of the Code within a period of 12 months and therefore the issue of sanctions would still have to be dealt with. The appellant asked that the committee impose lenient sanctions. The chairman pointed out that the committee would not decide on the issue of sanctions and that both parties would be forwarded an opportunity to make submissions on sanctions to the Directorate depending on the decision given by the committee.

THE DECISION
The committee having considered all the documents filed and oral submissions reached the following decisions.

In the view of the committee there was a proper complaint before the Directorate and it was entitled to consider the complaint. This matter was not persude during argument.
The committee agreed with the appellant that the Directorate should have afforded the appellant the opportunity to address it if the undertaking was not going to be accepted.
The authority of the ASA to deal with advertising even where another statutory body is involved was clearly decided in the matter of Nestle vs Mars. SCA 333/99/2001
The request to have the appeal fee refunded is denied.. In this regard the appellant is referred to the decision of the final appeal committee in the matter of Ozone Health Studio /S Crookson /119682

Accordingly the Directorates decision of 16 January 2013 is set aside and the appellants undertaking on the 13th June 2012 is accepted. As a consequence the appellant has had two adverse rulings against it in the last 12 months.

The appellant is therefore afforded ten days from the date of this ruling to comment on whether or not sanctions are warranted, and if so, which sanctions. After this period, the respondent will be afforded an equal opportunity to address the Directorate on this issue after which another ruling (on the issue of sanctions) will be made in accordance with the procedures of the Code. 

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