Weight loss company Jenny Craig has been hit with thousands of dollars in penalties after making alleged false or misleading representations about a promotion.
The '10kg for $10' television ads ran from December 2017 to February 2018, with it represented that people could sign up and lose 10kg for just $10.
However, the Australian Competition and Consumer Commission (ACCC) said that this amount only covered the program fee and did not make clear that customers had to purchase the food for an additional cost.
The company has been hit with almost $38,000 in penalties as a consequence.
“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.
Furthermore, it was raised that the person featured in the footage was a Jenny Craig employee, and not an independent reviewer.
This was also highlighted as an issue by the ACCC.
There were also issues with the company's refund policy, which made representations that the customers were obliged to inform the company within three days and return the products within 10 business days in original packaging.
However, this is not compatible with guarantees under the Australian Consumer Law.
“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.
“Businesses must ensure that their standard form membership agreements do not breach the Australian Consumer Law and that they accurately represent consumer guarantee rights.”
Jenny Craig made a statement to news.com.au regarding the issue, and denied that the costs were unclear.
The company has always disclosed the fact the cost of food is additional to any program fee in all its communications. 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. 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