FOR FURTHER INFORMATION CONTACT:

Jennifer Salvato, Genene Morris (973) 504-6327

NEWARK - United Micro Systems, Inc., ("UMS") has settled the State's allegations that it defrauded consumers by selling a bogus "hair replacement system" by agreeing to pay nearly $300,000 in consumer restitution and costs to the State, Attorney General John J. Farmer, Jr., and New Jersey Division of Consumer Affairs Director Mark S. Herr announced today.

Without admitting any wrongdoing, UMS has also agreed to make changes in its sales and advertising practices.

"We work hard to enforce the laws of the State and to take action against those who fail to comply with these laws," Farmer said. "We are satisfied with the outcome of this case because it emphasizes our commitment to fighting fraud and preserving consumers' rights."

"Under this agreement, UMS can't make its fraudulent claims anymore," Herr said.

In January 1999, a Camden County Superior Court judge partially froze UMS' assets after New Jersey accused the Voorhees company of repeatedly making false and misleading claims in Internet advertisements and in national magazines about the "Dermal Retention" system. The complaint also alleged UMS charged victims across the country and in Canada anywhere from $2,000 to $8,000 to undergo an alleged "permanent" hair replacement process that involved gluing toupees to clients' scalps. The company is located at Promenade North, Suite 3018, Main St., Voorhees.

The suit also named as defendants UMS' former owner, Karen Levine, Cherry Hill; its current owner and president, William Fillmyer, Delran; Fillmyer's assistant, Robert Calderone, Delran; Donna Anthony, an employee of UMS responsible for carrying out the Dermal Retention procedure; Ann Scaricamazza, UMS' customer service manager; and Robert Pease, office manager and sales consultant.

As part of the agreement, UMS will, among other things:

• pay $215,836.20 in consumer restitution and $80,000 to cover the administrative, legal and investigative costs incurred by Consumer Affairs;
• refrain from using "before and after" photographs and testimonials of purported clients unless they are accurate and actually do involve satisfied clients or disclose if models are used;
• remove all references to full or complete warranty in any advertisement unless such warranty is available;
• remove the terms "permanency," "FDA approved," and like terms from all its advertisements;
• require all sales consultants to follow a truthful sales script when discussing the UMS hair replacement system to potential clients;
• create and retain a file for each client and potential client for a minimum of three years from the date of the consumer's initial inquiry;
• maintain a list of at least five current clients, who are not employees or agents of the company, whom potential clients may contact as references; and
• allow clients to be accompanied by one other person during the application process.

Deputy Attorney General David Puteska of the Division of Law handled this case for the State.