Friday's Urban Legend: FALSE and FRAUDULENT
You've seen it on TV and you've heard the impressive testimonials from people like Ramsay Pang of Mississauga, Ontario (Canada) [Q-Ray Bracelet].
Q-Ray is really wonderful and the most interesting thing is you can tell the difference after you wear it. You can feel it. You can actually feel the difference.Now I know, dear readers, that you aren't stupid. You never would have fallen for a scam like the Q-Ray bracelet. (The titanium version shown here costs $265.97 (US).) I bet you wish those fradulent scam artists would get their rear ends sued.
Good news! They have been sued and they just lost their appeal in a decision released yesterday by United States District Court for the Northern District of Illinois, Eastern Division. The decision was written by Chief Judge Easterbrook and it's a hoot of a decision [FEDERAL TRADE COMMISSION v. QT, INC., Q-RAY COMPANY, BIO-METAL, INC., and QUE TE PARK].
WIRED Magazine recently put the Q-Ray Ionized Bracelet on its list of the top ten Snake-Oil Gadgets. See [10 Great Snake-Oil Gadgets].And that's just the opening paragraph!
The Federal Trade Commission has an even less honorable title for the bracelet’s promotional campaign: fraud. In this action under 15 U.S.C. §§ 45(a), 52, 53, a magistrate judge, presiding by the parties’ consent, concluded after a bench trial that the bracelet’s promotion has been thoroughly dishonest. The court enjoined the promotional claims and required defendants to disgorge some $16 million (plus interest) for the FTC to distribute to consumers who have been taken in. 448 F. Supp. 2d 908 (N.D. Ill. 2006), modified in part by 472 F. Supp. 2d 990 (N.D. Ill. 2007).
Here's more gems of wisdom from Chief Judge Easterbrook. The defendants said it was unreasonable to be forced to conduct rigorous scientific tests to verify their claims. The Judge agrees that in some cases such tests aren't necessary because the claims are quite reasonable and based on sound science. He gives the example of claiming that a bandage with iodine will prevent infection.
But how could this conclusion assist defendants? In our example the therapeutic claim is based on scientific principles. For the Q-Ray Ionized Bracelet, by contrast, all statements about how the product works—Q-Rays, ionization, enhancing the flow of bio-energy, and the like—are blather. Defendants might as well have said: “Beneficent creatures from the 17th Dimension use this bracelet as a beacon to locate people who need pain relief, and whisk them off to their homeworld every night to provide help in ways unknown to our science.”Apparently there was one study suggesting that people who wore the bracelet felt better. This is an example of the placebo effect, as the court notes. Is that good enough to overturn the conviction?
Although it is true, as Arthur C. Clarke said, that “[a]ny sufficiently advanced technology is indistinguishable from magic” by those who don’t understand its principles (“Profiles of the Future” (1961)), a person who promotes a product that contemporary technology does not understand must establish that this “magic” actually works. Proof is what separates an effect new to science from a swindle. Defendants themselves told customers that the bracelet’s efficacy had been “test-proven”; that statement was misleading unless a reliable test had been used and statistically significant results achieved. A placebocontrolled, double-blind study is the best test; something less may do (for there is no point in spending $1 million to verify a claim worth only $10,000 if true); but defendants have no proof of the Q-Ray Ionized Bracelet’s efficacy. The “tests” on which they relied were bunk. (We need not repeat the magistrate judge’s exhaustive evaluation of this subject.) What remain are testimonials, which are not a form of proof because most testimonials represent a logical fallacy: post hoc ergo propter hoc. (A person who experiences a reduction in pain after donning the bracelet may have enjoyed the same reduction without it. That’s why the “testimonial” of someone who keeps elephants off the streets of a large city by snapping his fingers is the basis of a joke rather than proof of cause and effect.)
Defendants insist that the placebo effect vindicates their claims, even though they are false—indeed, especially because they are false, as the placebo effect depends on deceit. Tell the patient that the pill contains nothing but sugar, and there is no pain relief; tell him (falsely) that it contains a powerful analgesic, and the perceived level of pain falls. A product that confers this benefit cannot be excluded from the market, defendants insist, just because they told the lies necessary to bring the effect about.Isn't this a clever argument? The placebo effect is beneficial to the patient and in order for the placebo to be effective you have to lie about the benefits of the Q-Ray bracelet. Therefore, this isn't fraud.
The court didn't buy that argument.
We appreciate the possibility that a vague claim—along the lines of “this bracelet will reduce your pain without the side effects of drugs”—could be rendered true by the placebo effect. To this extent we are skeptical about language in FTC v. Pantron I Corp., 33 F.3d 1088 (9th Cir. 1994), suggesting that placebo effects always are worthless to consumers. But our defendants advanced claims beyond those that could be supported by a placebo effect. They made statements about Q-Rays, ionization, and bio-energy that they knew to be poppycock; they stated that the bracelet remembers its first owner and won’t work for anyone else; the list is extensive.We need more judges like this.
One important reason for requiring truth is so that competition in the market will lead to appropriate prices. Selling brass as gold harms consumers independent of any
effect on pain. Since the placebo effect can be obtained from sugar pills, charging $200 for a device that is represented as a miracle cure but works no better than a dummy pill is a form of fraud. That’s not all. A placebo is necessary when scientists are searching for the marginal effect of a new drug or device, but once the study is over a reputable professional will recommend whatever works best.
Medicine aims to do better than the placebo effect, which any medieval physician could achieve by draining off a little of the patient’s blood. If no one knows how to cure or ameliorate a given condition, then a placebo is the best thing going. Far better a placebo that causes no harm (the Q-Ray Ionized Bracelet is inert) than the sort of nostrums peddled from the back of a wagon 100 years ago and based on alcohol, opium, and wormwood. But if a condition responds to treatment, then selling a placebo as if it had therapeutic effect directly injures the consumer. See Kraft, Inc. v. FTC, 970 F.2d 311, 314 (7th Cir. 1992) (a statement violates the FTC Act “if it is likely to mislead consumers, acting reasonably under the circumstances, in a material respect”).
Physicians know how to treat pain. Why pay $200 for a Q-Ray Ionized Bracelet when you can get relief from an aspirin tablet that costs 1¢? Some painful conditions do not respond to analgesics (or the stronger drugs in the pharmacopeia) or to surgery, but it does not follow that a placebo at any price is better. Deceit such as the tall tales that defendants told about the Q-Ray Ionized Bracelet will lead some consumers to avoid treatments that cost less and do more; the lies will lead others to pay too much for pain relief or otherwise interfere with the matching of remedies to medical conditions. That’s why the placebo effect cannot justify fraud in promoting a product. Doctor Dulcamara was a charlatan who harmed most of his customers even though Nemorino gets the girl at the end of Donizetti’s L’elisir d’amore.
CBC's Marketplace exposed the latest Q-Ray scam where they moved to Canada and backed off some of the more outrageous claims of health benefits.
[Hat Tip: Rebecca at Memoirs of a Skepchick (The Q-Ray gets ionized!)]
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