The Conoga Park, Calif., company marketed its Isis system - one of dozens of breast enhancement products available by telephone and over the Internet - as a safe and effective way for women to increase their breast size. Consumers spent more than $22 million on the herbal capsules and cream beginning in 1999, the FTC said.
But federal regulators, in a complaint filed in federal court in Los Angeles, said the company had no basis for its claims in radio, TV and print advertising that its product worked in most cases and did so without negative side effects.
Vital Dynamics received "hundreds of complaints about side effects, including headache, nausea and allergic reactions," the FTC said.
Vital Dynamics' three top officers, Geoffrey V. Knight, Mark D. Berman and Allen Smith, agreed to pay a total of $50,000 to settle the complaint. Knight has filed for Chapter 7 bankruptcy protection.
The three men also could be liable for up to $22 million if the court finds they misrepresented their finances, according to the settlement.
The company did not admit to any wrongdoing, said Claudia Lewis-Eng, its Washington-based lawyer.
The agreement is awaiting approval from a federal judge in Los Angeles.
The FTC began its investigation of the Isis system in September 2001, said Janet Evans, an FTC lawyer. Vital Dynamics stopped marketing its product early last year for unrelated reasons, Evans said.