Jenny Craig Weight Loss Centres, best known as simply Jenny Craig, ran a campaign of television advertisements suggesting that consumers could lose up 10kg for just $10. The ads ran between December 2017 and February this year.
However, the Australian Competition and Consumer Commission alleged that this amounted to misleading conduct, given the additional cost of food was not adequately conveyed to consumers.
“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.
Another no-no done by the company was that it failed to disclose one video testimonial actually featured a Jenny Craig employee, and that its standard membership form misrepresented consumer guarantees.
“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,” said Ms Court.
She added: “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.
“Businesses must ensure that their standard form membership agreements do not breach the Australian Consumer Law and that they accurately represent consumer guarantee rights.”
Despite co-operating with the ACCC and taking steps to rectify the situation, Jenny Craig was still issued with three infringement notices totalling $37,800, which it has since paid.
In a statement in response to the ACCC action, Jenny Craig said it is committed to transparency.
“The company has always disclosed the fact that the cost of food is additional to any program fee in all its communications. The 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 food is additional,” it said.
“Jenny Craig Australia has valued the opportunity to work collaboratively with the ACCC. This has given Jenny Craig the opportunity to continue working towards establishing best practices.”
Melbourne-based Jenny Craig employs around 400 people nationally, and has been in operation for 34 years.