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Jenny Craig Agrees to Settle Ad Complaint

Marketing: Weight-loss firm to provide more information on success rates, risks, pricing. No wrongdoing is admitted.

May 30, 1997|From Times Staff and Wire Reports

After four years of wrangling, Jenny Craig International Inc. settled a federal deceptive-advertising complaint by agreeing to provide more complete information on success rates, health risks and pricing of its weight-loss program.

The agreement, announced Thursday by the Federal Trade Commission, is the fourth deceptive-advertising settlement in as many years with some of the nation's most popular weight-loss programs. About 8 million Americans join such diet regimens each year.

The agency could be close to resolving similar charges against Weight Watchers International Inc., a unit of H.J. Heinz Co. FTC staff members reached a draft settlement with the company, and the agency's five commissioners are now reviewing that agreement, FTC spokeswoman Bonnie Jansen said.

As with agreements reached in the early 1990s with Diet Center, Nutri/System and Physicians Weight Loss Center, Jenny Craig did not admit any wrongdoing and is not subject to any fine.

"The company does not anticipate any changes in its advertising practices as a result of today's announcement," the La Jolla-based company said in a statement.

"In fact, the company strongly believes that its advertising, for several years, has followed the guidelines that the consent agreement simply formalizes."

Jenny Craig's previous advertising agency, J. Walter Thompson, settled with the FTC in 1995.

In its complaint, the FTC said that Jenny Craig used glowing testimonials in its ads that misled consumers about what kind of results they could expect from the program. "I lost 95 pounds in just over six months," said one ad. "And I've kept the weight off for over a year."

The FTC said the company also misled consumers about the cost of the program by touting low membership fees but failing to mention the cost of meals participants must buy. The tab for prepared meals from Jenny Craig can run as high as $100 a week.

"Pay as you go for just $9 a week, or lose all you want for $49," said one ad.

Under the settlement, Jenny Craig agreed to substantiate weight-loss claims in advertising and include a disclaimer that weight loss is temporary for most dieters. It must base any claims about weight loss on actual losses by customers tracked over two years.

Testimonials used in ads must reflect what most customers experience; otherwise, the examples must be depicted as unique.

In advertising or responses to consumer inquiries on prices, Jenny Craig must reveal all associated costs, including any special foods or vitamins that might accompany the base plan.

The Center for Science in the Public Interest, a consumer advocacy group, said the settlement does not go far enough.

The group wants weight-loss programs to detail all costs, risks and guarantees in writing before the customer signs up, said Leila Farzan, senior staff attorney.

"We just want upfront information," said Farzan, who contends the settlement compels full disclosure only when it is requested.

Jenny Craig has reeled in recent years from a series of legal battles, including a class-action lawsuit by shareholders and growing competition from prescription weight-loss drugs. The company's share price has fallen 65% since hitting $18.125 last June 13. Meanwhile, the company's sales dropped to $401 million last year from $490 million in 1993.

The settlement is subject to a 60-day public comment review.

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