The consumer watchdog has fined Jenny Craig Weight Loss Centres $37,800 for allegedly misleading claims made in its advertisements.
Jenny Craig told consumers they could lose up to 10 kilograms of weight by paying just $10.
But the company did not adequately disclose that any customers who signed up to the deal would have to pay additional fees towards meals as part of the weight-loss plan, according to the Australian Competition and Consumer Commission.
It also failed to disclose that someone featured in an online testimonial video was in fact a Jenny Craig employee.
Here is an example of one of the ads in the series
The ACCC issued three infringement notices for alleged “false or misleading representations” in breach of consumer law.
“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.
“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.”
The sign-up also claimed – incorrectly – that customers couldn’t get a refund unless they notified the company within three days and returned faulty products within 10 business days in their original packaging.
“If a product fails to meet the consumer guarantees under the Australian Consumer Law, people are automatically entitled to a remedy, even if they did not comply with the notice and return requirements in the contract,” Ms Court said.
Jenny Craig took steps to rectify the problems during the investigation, the ACCC said.
A Jenny Craig spokeswoman told The New Daily it is committed to transparent advertising and promotions.
“The company has always disclosed the fact the cost of food is additional to any program fee in all its communications,” she said.
“The full weekly cost of Jenny Craig food has always been disclosed on the website and in its digital advertising.
“The voice-overs in the television commercials have always clearly stated that the cost of food is additional.”