WASHINGTON, July 12, 2000 -- Operators of a group of online pharmacies that promoted themselves touting medical and pharmaceutical facilities they didn't actually have and making privacy and confidentiality assurances they didn't keep, have agreed to settle Federal Trade Commission charges that their promotional claims were false and violated federal laws.

The settlement with the promoters prohibits the deceptive claims; requires disclosures about medical and pharmaceutical relationships; bars the billing of charge cards without consumer authorization; prohibits disclosure of the information collected from consumers without the consumers' authorization; and, requires them to notify consumers of their practices regarding the collection and use of consumers' personal identifying information.

The FTC alleged that Worldwidemedicine.com, Focusmedical.com and a group of other Web sites, individuals and corporations made claims such as "Focus Medical Group is a full service clinic with a full time staff dealing with the treatment of sexual dysfunction. The clinic's licensed medical physicians network with an organization of physicians throughout the United States and Internationally." The FTC alleged there was no clinic, and that the "network of physicians throughout the United States and Internationally," consisted of one physician in a distant state. Consumers who requested prescription drugs for the first time were asked to provide billing and shipping information and to answer questions about their medical history on a form titled, "Secure Viagra Order Form Personal and Payment Information." They were charged $75.00 for a "medical consultation." According to the FTC, the medical information was faxed to an out-of-state physician who reviewed it and approved or denied prescription requests. The physician was paid $10.00 per review, but only if he approved the prescription request.

The sites also claimed "All of our prescriptions are filled on premises," touting their on-site pharmacy. The FTC alleged they have no on-site pharmacy; their prescriptions are filled by a local drug store. The complaint alleges that the sites misrepresented the security and encryption used to protect consumers' information. It also alleges that the defendants used information in a manner contrary to their stated purpose. Finally, the complaint alleges that the defendants sent "spam" to 11,000 customers informing them that their credit cards would be billed $50 for "Y2K Remediation." The FTC charged that the spam misrepresented that the defendants had the legal authority to debit consumers' credit cards without prior authorization violated federal law.

Settlement of the charges bars the defendants from misrepresenting medical and pharmaceutical arrangements; prohibits misrepresentations about their use of credit card information and bars misrepresentations about any other material fact about the scope or nature of defendants' goods, services or facilities. The settlements bar the defendants or anyone who works for them from operating any Online pharmacy unless they disclose the name, business address and phone number for the pharmacy that will dispense the drugs; the physician who will prescribe them - including the state or states where he is licensed to practice - and the company offering the drugs for sale. They also require the defendants to post a notice on any Web site they operate that offers prescription drugs stating, "Dispensing a prescription drug without a valid prescription is a violation of Federal law. More information on purchasing prescription drugs Online is available at www.fda.gov "

The settlements also prohibit the defendants from "selling, renting, leasing, transferring or disclosing the personal information that was collected from their customers without express authorization from the customer." Finally, the settlements require that the defendants post a privacy policy that discloses the types of personal identifying information they are collecting either actively or passively, through such technologies as computer cookies; the uses that will be made of the data; the means by which a consumer may access and review his or her personal information; and, a means by which a consumer may modify or delete personal information on file. The defendants also are required to establish and maintain reasonable procedures to protect the confidentiality, security and integrity of personal information collected from consumers. The settlements also contain record keeping provisions to allow the FTC to monitor compliance with its order.

The defendants named in the FTC's complaints are: Sandra L. Rennert and Philip Rennert of Las Vegas, Nevada; International Outsourcing Group, Inc.; Focus Medical Group, Inc.; Trimline, Inc.; Affordable Accents, Inc.; Worldwide RX, Inc.; WorldWide Medicine, Inc.; PSRenn, Inc., and; Doctors A.S.A.P., Inc.

An additional defendant, Lyle Mortensen, was not active in the Online pharmacy, but participated in the unauthorized credit card billing scheme. The settlement with Mortensen bars material misrepresentations, prohibits unauthorized billing of credit cards and contains the same Online privacy and security provisions as the other settlement.