Action Seeks More than $1.5 Million in Penalties Plus Restitution for Consumers
(SACRAMENTO) – Attorney General Bill Lockyer today filed a lawsuit against European Health Concepts Inc., charging the company with violating various consumer protection laws, including making false and misleading claims about the health benefits of the magnetic mattress pads and seat cushions it sold to senior citizens and others with medical problems.
The lawsuit seeks more than $1 million in civil penalties for violations of state laws regulating unfair business practices and making false claims, $500,000 in civil penalties for transactions involving senior citizens and full restitution for consumers who bought the products. The result of an investigation by the California Department of Consumer Affairs, the lawsuit also seeks to permanently bar the company, its president and other defendants from engaging in future unlawful business practices in California.
"We will not allow companies to hawk unproven products as a cure-all to the elderly and those with serious illnesses who are desperately searching for pain relief," Lockyer said. "These types of scams serve as an important reminder for consumers to check into claims made by companies and talk with your health care provider before making costly medical decisions."
"Illegal and unethical business practices will not be tolerated in California," said Kathleen Hamilton, Director of the Department of Consumer Affairs. "We will continue to investigate companies that try to profit illegally from consumers."
Filed in Sacramento Superior Court, the lawsuit names as defendants Florida-based European Health Concepts (EHC); its president, Kevin Todd; and several sales managers and agents.
The company sold magnetic mattress pads and seat cushions at sales events held at local restaurants. Postcards were mass-mailed, primarily to senior citizens, inviting the recipient and up to five guests to attend free dinner seminars where they could learn what "prominent physicians and major medical universities" had to say about their products, which promised to relieve pain, improve circulation and reduce inflammation.
The complaint alleges the company unlawfully claimed its mattresses help people suffering from various diseases including lupus, sciatica, herniated discs, asthma, bronchitis, cataracts, chronic fatigue syndrome, colitis, diverticulitis, heart disease, and others. The company also claimed that EHC's products contained "the only magnets clinically proven" to reduce pain, accelerate healing and improve circulation. Under California law, drugs and devices may not be promoted as having a "curative or therapeutic effect" on specific conditions, disorders or diseases unless they have been approved by appropriate state or federal agencies.
The complaint alleges the company's sales presentations stated or implied that various celebrities and sports figures – including actors Anthony Hopkins and Dick Van Dyke, former Miami Dolphin's quarterback Dan Marino, and professional golfer Jim Colbert – benefitted from using the products, when none of them had ever heard of EHC, nor used their products.
In addition, the lawsuit charges that the company entered into contracts without giving the proper oral and written notices of cancellation required by law and that when consumers attempted to obtain refunds under the "100 percent satisfaction guarantee," the company did not provide them on a timely basis.
Sales agents allegedly offered phoney price discounts for purchases made at the seminar that actually were the company's regular prices. The complaint also charges that EHC falsely claimed that it manufactured the magnetic products it sold.
Consumers who believe they are the victims of fraud are urged to file a report with the Attorney General's Public Inquiry Unit at (800) 952-5225. Electronic complaint forms and other information are available on the Attorney General's web page at http://ag.ca.gov/consumers/index.htm. Consumers also can contact the Department of Consumer Affairs at (800) 952-5210 or visit the department's web site at www.dca.ca.gov.