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The distributor of an under-$30 hearing aid is paying $515,000 to settle consumer fraud suits for falsely advertising its hearing aids and selling them without the required FDA approval. Under a 1996 court settlement, the distributor, Telebrands Corp. of Roanoke, Va., also was forced to recall the hearing aids, refund the purchase price to consumers, and stop selling or advertising the products without FDA clearance.
Seventeen states, supported by an affidavit from FDA, took Telebrands to court over the company's unproven marketing claims for its Whisper XL hearing aids. Newspaper ads and television commercials, some of them featuring entertainer Steve Allen, indicated the device was a bona fide hearing aid by telling consumers, "Take it to the movies, theater or lecture hall and you'll never miss a word" and saying, "Now you can enjoy the crisp clear sound of a TV or radio playing at low levels, without annoying everyone else in the room."
FDA started investigating Telebrands based on some 1994 advertisements in Parade magazine and various newspapers. The agency sent a warning letter to Telebrands in July 1994, stating that the Whisper XL was an adulterated product being illegally marketed without FDA clearance.
The agency classified the Whisper XL as a medical device because it fit the legal definition of a hearing aid: "a wearable sound-amplifying device that is intended to compensate for impaired hearing."
Telebrands protested FDA's classification in several letters and a citizen petition it submitted to FDA in 1994. The company argued that the Whisper XL was not a hearing aid because it wasn't intended for people with hearing loss but rather for people with normal hearing to achieve "super hearing."
FDA responded by reiterating its position that the Whisper XL was a medical device--a hearing aid--that required FDA clearance for marketing. FDA said it based its decision in part on claims made in promotional labeling and advertising, including ads depicting older people using the product while doing normal daily activities, such as riding in a taxi, boarding an airplane, and watching television. This implied the product was intended to compensate for hearing impairment, the agency told the company, because people with normal hearing don't need sound amplification for these kinds of daily activities.
While never admitting the Whisper XL was a medical device, Telebrands offered to change its ads "to further expressly emphasize that the Whisper XL is intended to enhance normal hearing." The agency responded, in letters to Telebrands and in a September 1994 meeting with the company president and his attorney, that a market had already been established for the product and that relabeling the Whisper XL would not overcome the impression that the product could compensate for hearing loss.
While FDA collected evidence to support an intended seizure of the hearing aids, a number of state attorneys general were looking at Telebrands' marketing practices. In September 1995, 17 states, led by the Minnesota Attorney General Hubert H. Humphrey III, sued the company for falsely advertising the Whisper XL and selling it without FDA clearance.
FDA decided to support the states' efforts rather than pursue seizure. "It was more efficient for FDA to support the individual actions brought by the states," says Eric Latish, chief of FDA's dental, ear, nose and throat, and ophthalmic devices branch.
FDA gave the states a sworn statement explaining its classification of the Whisper XL as an unapproved medical device, not just a sound amplification device for people with normal hearing. Such devices for people with normal hearing might not require FDA clearance.
"The agency wasn't making a judgment about whether the product did or didn't work," says Byron Tart, director of FDA's devices promotion and advertising policy staff. "Our issue was that the device was a hearing aid, and a medical device without clearance to be marketed."
Minnesota and the 16 other states--Arizona, California, Connecticut, Florida, Illinois, Massachusetts, Missouri, Maryland, New Jersey, New Mexico, North Carolina, New York, Pennsylvania, Texas, Vermont, and Wisconsin--reached settlements with Telebrands on July 30, 1996. Telebrands, which had sold about $12 million worth of the Whisper XL hearing aids, agreed to the terms without any admission of wrongdoing.
The Federal Trade Commission reached a separate agreement with Telebrands for violations of that agency's advertising and mail-order rules.
In a press release filed by Minnesota's Humphrey the day the settlement was reached, the attorney general called the Whisper XL a "cheap, poorly-performing device." Continuous use of the Whisper XL could cause hearing damage, the release said.
FDA never received any complaints of injuries from the product.
Telebrands apparently has stopped marketing the Whisper XL, according to FDA's Latish. Since the July settlement, agency officials have not seen any ads for the hearing aid and have not received any complaints.
Between August 1994 and August 1996, FDA sent warning letters to more than 10 other companies that made unsupported claims for their hearing aids. Some companies have already notified FDA that they will correct the violations by revising the claims or ceasing marketing of the products.
Do these kinds of false claims mean consumers should ignore all promotional claims they see and read about hearing aids? Not necessarily. One clue to look for is a product's price, says Minnesota Assistant Attorney General David Woodward. "People should be skeptical of claims like those made for the Whisper XL hearing device--that they'll hear a pin drop from 50 feet away or that they'll hear a deer coming before it hears them--especially for a [hearing aid] being sold for $29."
Hearing aids typically cost between $300 and $3,000, according to the International Hearing Society. Says FDA's Tart: "Advertising is biased and intended to sell the product. Most consumers wouldn't know if a product had received clearance from FDA. But a hearing aid for $29? That sounds too good to be true, and it was."
Tamar Nordenberg is a staff writer for FDA Consumer.
As a result, in June 1996, Tim Themy-Kotronakis was convicted in the U.S. District Court for the District of Utah of criminal contempt for violating a 1989 and a 1994 injunction against his selling and promoting unapproved medical devices and a drug solution. Judge J. Thomas Greene sentenced Themy-Kotronakis Oct. 25 to six months' probation and 50 hours of community service.
Themy-Kotronakis originally manufactured the Ster-O-Lizer, a device he said could sterilize surgical instruments. He began making this device in 1984. In 1993, he began a large-scale promotion of the AIDS Treating Machine. The only difference between the two devices is shape. The Ster-O-Lizer is completely rectangular, while the AIDS Treating Machine has a cylinder on top of a rectangular base.
The AIDS Treating Machine supposedly turns salt water, or "Solution A," into a treatment to "de-activate" pathogens and viruses. According to the instructions, Solution A becomes a potent drug after exposure to the electric currents inside the cylinder. The drug can then be administered intravenously, intramuscularly, orally, rectally, or in any combination of these methods.
Themy-Kotronakis operated under several business names, most recently as Brinecell Inc. and T & T Medical Products.
After receiving complaints from health professionals about the "AIDS Treating Machine," James Moore, an investigator with FDA's Salt Lake City resident post, inspected Brinecell in August 1993. During the inspection, Moore asked Themy-Kotronakis several times if he was manufacturing, marketing, promoting, or selling any medical devices. Each time, Themy-Kotronakis said no. He also denied operating under any other business name besides Brinecell. However, as the inspection continued, Moore noticed an envelope with the return address T & T Medical Products and the same street address as Brinecell. Also printed on the envelope was the statement "Ask about our AIDS Treating Machine." At that point, Themy-Kotronakis admitted he was promoting the machine for AIDS treatment. He added, however, that he was not going to sell any machines until he had FDA approval.
When Moore returned the next day to continue the inspection, Themy-Kotronakis would not allow him to enter the firm.
On Sept. 8, Moore, FDA investigator Frederic French, who was with the agency's Salt Lake City office at that time, and two U.S. marshals returned to Brinecell with an inspection warrant. This time, Themy-Kotronakis allowed them to enter.
During this inspection, Moore and French learned that Themy-Kotronakis had manufactured at least one AIDS Treating Machine and sent promotional letters all over the world. These measures indicated he intended to manufacture and sell the devices and Solution A. Their inspection found that the device had not been evaluated for safety and effectiveness by FDA and that the devices and Solution A were manufactured in complete absence of current good manufacturing practice requirements.
Themy-Kotronakis told the investigators he didn't realize he had to follow FDA laws and regulations. He said this even though the agency had cited him for violations seven times since September 1983, and seized his devices for violations in 1986 and 1987. Also, the agency had enjoined him in 1989 based on these violations.
On March 21, 1994, at FDA's request, the Department of Justice filed in the U.S. District Court for the District of Utah a request to permanently enjoin Themy-Kotronakis from selling and promoting his AIDS Treating Machine, Solution A, and any other medical devices and drugs until he obtains FDA approval.
Themy-Kotronakis signed a consent decree of permanent injunction July 7, 1994. But within days he was violating the injunction by running help-wanted ads for a national sales manager to promote the Ster-O-Lizer, says Shelly Maifarth, a compliance officer with FDA's Denver district office. Although the July 7 decree specifically prohibited selling and promoting the AIDS Treating Machine, it applied also to all unapproved medical devices, including the Ster-O-Lizer, explains Maifarth. In addition, the 1989 injunction prohibiting Themy-Kotronakis from manufacturing and shipping unapproved devices was still in effect.
On Aug. 2, Themy-Kotronakis held a press conference at the Hilton Hotel Conference Center in Salt Lake City to promote his AIDS Treating Machine and complain about the consent decree. During the next few months, he continued to promote both the AIDS Treating Machine and the Ster-O-Lizer in letters to individuals, firms and governments around the world. FDA investigators found these letters during an inspection Oct. 13 through 24.
Then, in May 1995, a Salt Lake City export broker told FDA that Themy-Kotronakis was trying to ship the Ster-O-Lizer to Spain. On June 2, U.S. marshals seized the device.
These violations prompted the Department of Justice, at FDA's request, to file a petition on June 12 with the U.S. District Court for the District of Utah requesting that Themy-Kotronakis be tried for criminal contempt of the two injunctions.
The court agreed, and a trial was held Jan. 29 and 30, 1996. On June 26, U.S. District Judge Greene found Themy-Kotronakis guilty of criminal contempt of both injunctions.
At press time, Themy-Kotronakis was appealing his conviction.
--Isadora Stehlin
The government filed the decree last Dec. 16 simultaneously with a civil complaint in the U.S. District Court for the Southern District of New York.
This consent decree is the latest in a series of actions by FDA to ensure the continued safety of the U.S. blood supply. FDA entered into similar agreements with Blood Systems Inc./United Blood Systems in 1996, and with the American Red Cross in 1993.
The New York Blood Center collects blood at both fixed and mobile donation sites in New York City and Melville, N.Y., and in New Jersey. It also performs blood donor testing for facilities in New Jersey, Pennsylvania and Tennessee and imports and exports blood products to and from Europe.
In late 1994, FDA investigators inspected the center's New York City facility on Amsterdam Avenue and found that the center was:
In late 1995, FDA investigators inspected the center's East 67th Street location, in New York City, examining a number of operations, including the center's interpretation of Western Blot testing. This test is done on blood from donors whose screening tests showed them to be reactive for infection with HIV, the AIDS virus. It helps distinguish true positive screening test results from false positive results.
Also that winter, FDA reinspected the Amsterdam Avenue location.
In those and follow-up inspections, FDA investigators found efforts for improving operations to be inadequate. The civil complaint followed.
Under the decree, approved by the court Dec. 17, 1996, the center agreed to:
For planned medical procedures, FDA generally advises patients that it is prudent to set aside their own blood, in advance, in case a blood transfusion is needed. The agency emphasizes that the risk of not having a medically necessary transfusion far outweighs the risk of receiving blood.
--Dixie Farley