Redwood Scientific Technologies under investigation for FTC Act violations
BehindMLM recently reviewed RengaLife on April 13th.
While I didn’t personally come across any suspect marketing claims as part of my research, it has emerged RengaLife’s parent company, Redwood Scientific Technologies, is being investigated for suspected violations of the FTC Act.
In August, 2017, the FTC issued Redwood Scientific Technologies with a civil investigative demand (CID).
The CID was part of the FTC’s
investigation into (Redwood Scientific Technologies’) advertising and marketing practices for a smoking cessation product and an appetite suppressant.
These products are TBX-Free and Eupepsia Thin, both offered through RengaLife.
Specifically, the FTC are investigating whether Redwood Scientific Technologies
- made false or unsubstantiated representations concerning TBX-FREE’s efficacy as a smoking cessation product
- made false or unsubstantiated representations concerning Eupepsia Thin’s efficacy as an appetite suppressant and weight loss product
- falsely represented that certain medical institutions and publications have endorsed TBX-FREE as a smoking cessation product
- falsely represented that TBX-FREE comes with a
money back guarantee and
- violated ROSCA by enrolling consumers in automatically-recurring purchase plans (also known as “autoship plans”) without their express informed consent
One of the key regulatory compliance issues BehindMLM identified in our RengaLife review was mandatory affiliate autoship.
It seems Redwood Scientific Technologies has been pushing autoship onto unsuspecting consumers outside of RengaLife too.
With respect to the false representation of endorsement, last May the Massachusetts Medical Society sued Redwood Scientific Technologies for trademark infringement.
On September 6th a permanent injunction was entered against Redwood Scientific Technologies, prohibiting them from using the “New England Journal of Medicine” trademark.
Upon receiving the FTC’s CID last August, Redwood Scientific Technologies had until September 6th to comply.
The company however missed multiple deadlines, including self-imposed deadlines set by the company’s attorneys.
Despite attempts to reach Redwood’s counsel on or before the due date, Redwood failed to provide any information on or before the CID’s stated deadline of September 6, 2017.
On September 11, 2017, FTC staff informed Redwood’s counsel that the company was in default.
Staff did not receive a response until September 27, 2017, at which time counsel stated that she was working with the company to prepare its response and requested an extension in the form of weekly rolling production dates on three dates in October.
Staff denied the request for modification of the CID, but agreed to forbear from seeking judicial enforcement provided that the company met each of its proposed deadlines.
As of this date, however, Redwood has not produced any information.
The FTC chalked this up as Redwood Scientific Technologies refusing to cooperate, and alleged their inaction was stymieing the FTC’s investigation.
On October 30th, 2017, the FTC filed a petition requesting an order to enforce the CID (from which the above paragraphs are quoted).
On January 16th an order to show cause was made, directing Redwood Scientific Technologies to explain why an enforcement order shouldn’t be entered by January 23rd.
On or around January 22nd Redwood Scientific Technologies and the FTC entered into negotiations.
On January 24th, a joint stipulation was filed between the parties.
As per the stipulation, Redwood Scientific Technologies agreed to comply with the CID by February 9th.
After promising the FTC and the court they’d comply, Redwood Scientific Technologies… did absolutely nothing.
A March 5th application for an order to show cause filing by the FTC stated
Redwood has not responded to any of the CID’s 22 interrogatories or 16 document requests, nor has it provided any reasons it is unable to comply.
The order was granted on March 6th, requiring a Redwood Scientific Technologies company executive and attorney attend an April 9th “show cause” hearing.
A subsequent March 20th order rescheduled this hearing to April 23rd.
If Redwood Scientific Technologies intended to file anything, they were directed to do so by April 13th. A reply had to of have been filed by April 17th.
Despite being served with the March 20th order on April 2nd, to date Redwood Scientific Technologies have failed to file anything or make an appearance on the case docket.
Surely even if they’d committed violations of the FTC Act, the smart thing to do would be comply with the FTC, admit it, cop administrative punishment on the chin and get on with it?
Contempt of court can lead to prison time… so either Redwood Scientific Technologies are hiding much more than the FTC suspects, they’ve received terrible legal advice – or both.
In the meantime the fate of Redwood Scientific Technologies’ MLM company, RengaLife, hangs in the balance.
April 23rd is next Monday. Stay tuned…
Update 23rd April 2018 – The petition hearing has been continued to May 29th.
A joint status report is to be filed by both parties by May 22nd.
Update 24th may 2018 – After coming up with six new production deadlines across April 27th to May 25th, Redwood Scientific Technologies has missed five of them.
The continued show cause hearing is currently scheduled to take place on May 29th.