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FTC, GeneLink and Subsidiary Reach Deal to Settle Charges of False Advertising

NEW YORK (GenomeWeb News) – The US Federal Trade Commission announced on Tuesday it has reached an agreement with GeneLink and its former subsidiary foru International to settle charges of deceptive advertising claims made by the companies about their personalized nutritional supplements.

The settlement, which is not yet final, would also resolve allegations that GeneLink and foru engaged in "lax information security practices," the FTC said.

According to the agency, the two firms marketed nutritional supplements and a skincare product that was purportedly customized to each buyer's individual genetic profile based on a cheek DNA swab provided by the customer. Each of the products cost more than $100 per month.

In an administrative complaint, GeneLink and foru were alleged to have violated the FTC Act by making false and unsupported health claims about the products. Marketing materials that were approved by the companies included claims that the nutritional supplements could compensate for genetic advantages, and that the skin repair serum's effectiveness was scientifically proven, FTC said.

The companies further made claims through testimonials that the customized nutritional supplements could be used to treat serious ailments such as diabetes, heart disease, and insomnia.

The FTC also said that GeneLink and foru "deceptively and unfairly claimed that they had taken reasonable and appropriate security measures" to protect personal information collected from about 30,000 consumers. The complaint alleges that GeneLink and foru failed to protect information such as genetic information, Social Security numbers, bank account information, and credit card numbers.

The two firms also failed to require service providers to have appropriate safeguards for consumer personal information and did not use security measure that were readily available in order to limit wireless access to their network, the FTC added.

As part of the proposed settlement, GeneLink and foru are prohibited from a wide range of activities that include making claims that any food, drug, or cosmetic "will treat, prevent, mitigate, or reduce the risk of any disease, including diabetes, heart disease, arthritis, or insomnia," by changing the effect of genes, or based on a consumer's genetic assessment. If such claims are made, they must be supported by a minimum of two "adequate and well-controlled studies," the FTC said.

Any claim that a product treats or prevents disease in people with a particular genetic variation also needs to be supported by randomized clinical trials with patients that have the variation.

GeneLink and foru are further barred from making any other claims about the health benefits, performance, or effectiveness of any food, drug, or cosmetic by altering gene effects or the customer's individual genetic assessment, unless the claims are true and supported by "competent and reliable scientific evidence."

They cannot misrepresent scientific research regarding such food, drug, or cosmetic or any genetic test or assessment, the FTC said, though "[t]he orders provide a safe harbor for advertising claims that have been approved by the FDA."

GeneLink and foru also cannot provide their affiliates, or any person or entity the means to make any of the prohibited health claims, and are required to monitor claims made by affiliates on their behalf.

Additionally, the companies will have to establish and maintain comprehensive security programs and allow independent auditors to review their security programs every other year for 20 years. The proposed settlement bars GeneLink and foru from misrepresenting their privacy and security practices.

The settlement agreements are subject to public comment through Feb. 6. Afterward, the FTC will make a decision whether to make the proposed consent orders final.

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