RealTime IT News

FTC Blasts Online Health Fraud

The Federal Trade Commission is cracking down on healthcare fraud being perpetrated online, settling charges with one company in California and sending warning advisories to 280 other Web site operations.

The agency said San Ysidro, Calif.-based BioPulse, which had been touting "alternative" treatments for cancer -- including one called "Acoustic Lightwave Therapy" -- agreed to settle after charges were brought.

The company had advertised in print and on the Internet that their therapies, including another one called "insulin-induced hypoglycemic sleep therapy," could effectively treat a wide variety of cancers and other serious diseases -- after patients paid as much as $39,000.

The FTC also said that it has sent more than 280 advisory letters to domestic and foreign sites that were identified as making questionable claims for health-related products or services.

The sites were swept up in the latest Operation Cure.All 2002 health claims initiative, the FTC said.

The Operation Cure.All initiative is an ongoing federal and state law enforcement and consumer education campaign launched in June 1999 targeting bogus health claims on the Internet.

The Web sweep was conducted as part of an international Internet health fraud probe, led by the Australian Competition and Consumer Commission and participated in by 19 members of the International Marketing Supervision Network (IMSN) -- an international network of consumer protection law enforcement agencies.

"In any language, health fraud trades on hope," said J. Howard Beales III, director of the FTC's Bureau of Consumer Protection. "As today's announcements indicate, health fraud is an international issue."

"Surveys have shown that many patients, especially those with chronic and life-threatening conditions like cancer, seek complementary and alternative medical (CAM) practices ..." said Dr. Stephen E. Straus, director of the National Center for Complementary and Alternative Medicine at the National Institutes of Health. "While we await the outcome of rigorous, NIH-funded studies of these practices, it would be prudent to appreciate that they are not all safe and they do not all work."

BioPulse had offered its purported treatments in a clinic in Tijuana, Mexico.

The FTC contended that the defendants -- BioPulse International Inc., BioPulse Inc., Jonathan Neville and Loran Swenson -- did not have adequate substantiation for the safety and effectiveness claims the defendants made. As part of the settlement, the defendants are permanently barred from misrepresenting claims for IHT, ALW, or any dietary supplement, food, drug, device, or any health-related service.

The settlements also contain a suspended judgment of $4.3 million, due in full if the defendants are found to have misrepresented their financial situation.