Jenny Craig cut down to size with ACCC penalty
Competition & Consumer Protection June 5, 2018 12:01 pm By Cat Fredenburgh | Melbourne

The Australian Competition and Consumer Commission said Tuesday Jenny Craig Weight Loss Centres had paid a $37,800 penalty after the regulator issued three infringement notices over the ads’ for providing false or misleading representations.

The ads promised consumer could lose up to 10 kilos for a $10 program fee, but failed to disclose that food had to be purchased at an additional cost.

“We were concerned that Jenny Craig’s advertisements may have misled consumers into thinking they could participate in a Jenny Craig program and lose 10kg for $10, when in reality customers would have had to spend far more than that,” ACCC Commissioner Sarah Court said.

Jenny Craig cooperated with the ACCC’s investigation and took steps to address its concerns.

“While Jenny Craig already had in place stringent review and compliance mechanisms, it has used the ACCC examination of its processes to evolve these efforts even further. Jenny Craig is committed to ensuring all its advertising and promotions are
completely transparent and easy to understand,” the company said.

The ACCC also took the weight loss giant to task for not disclosing that a person featured in an online video testimonial was actually a Jenny Craig employee.

“Businesses need to be transparent about any relationships with people providing a testimonial. Consumers must be informed when a testimonial is given by someone who is employed by the business, and is not an independent reviewer,” Court said.

Finally, the ACCC said Jenny Craig violated the ACL with its standard form membership agreement, which said purchasers of faulty products were required to inform Jenny Craig within three days of purchase and return faulty products within 10 business days in their original packaging. Under the ACL, purchasers of faulty products are entitled to remedies even if they don’t comply with notice and return requirements in a company contract.

“Businesses must ensure that their standard form membership agreements do not breach the Australian Consumer Law and that they accurately represent consumer guarantee rights,” Court said.

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Christine Caulfield

Christine Caulfield has been a journalist for 18 years. She was most recently the Co-Managing Editor at US legal news publication Law360. Prior to that she worked as the County Court reporter for The Herald Sun. She is Co-Founder and Editor of Lawyerly.