A popular hair-smoothing treatment hailed as a revolution in hairstyling could be harmful to users as well as the stylists who apply it.

Health Canada is warning that the popular new hair-straightening product "Brazilian Blowout" from a company in California contains 12 per cent formaldehyde. That far exceeds the 0.2 per cent allowed in cosmetics.

"Any procedure containing formaldehyde above the allowable limits places clients and stylists at increased risk," said Health Canada in a statement. "Formaldehyde is a known irritant, sensitizer and is linked to cancer in humans when inhaled chronically over a long period of time."

Initially, Brazilian Blowout would not discuss the Health Canada warning, referring CTV News to a public relations firm in New York. By late Saturday, however, the prodyct's manufacturer issued a statement.

"We are working directly with Health Canada as the test results they've released are inaccurate and invalid. We have no further comment until proper testing is performed."

The official website of Brazilian Blowout maintains the products is safe –- but does not list its ingredients.

The company is apparently awaiting a patent.

Health Canada says it's working with the Canadian distributor of the product to address its findings. The agency said there is no cause for alarm for people who have used Brazilian Blowout and have not suffered any problems. But those who have experienced any negative effects are advised to seek medical attention.

Calgarian Suzanne Harvey is one of those people complaining of hair loss after using the product. Harvey noticed her long blonde hair falling out after undergoing a Brazilian Blowout treatment.

"Probably, I've lost 20, 25 per cent so far in about two weeks," she said.

Troy Winget, owner of the Red Bloom Salon in Calgary, said he had no idea there was any formaldehyde in the product, as the bottle claims it's free of the chemical.

Winget told CTV News his salon has had up to a dozen customers already booked this month who wanted the treatment, and has cancelled all of them. He said he's also contacting clients who've undergone the treatment in the last three months as a precaution.

Hairdresser Doug Holgate told CTV News he stopped using the product long before the Health Canada warning was issued, claiming he was suspicious of what was in the solution.

"They will not list ingredients and they won't tell you what's in it," he said. "I'm not going to endanger anybody."

With a report from CTV's Janet Dirks in Calgary