[Federal Register Volume 62, Number 108 (Thursday, June 5, 1997)]
[Notices]
[Pages 30857-30859]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14678]
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FEDERAL TRADE COMMISSION
[Docket No. 9260]
Jenny Craig, Inc.; Jenny Craig International, Inc.; Analysis to
Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft amended
complaint that accompanies the consent agreement and terms of the
consent order--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before August 4, 1997.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
Jeffrey Klurfeld, Federal Trade Commission, San Francisco Regional
Office, 901 Market Street, Suite 570, San Francisco, CA 94103. (415)
356-5270.
Matthew Gold, Federal Trade Commission, San Francisco Regional Office,
901 Market Street, Suite 570, San Francisco, CA 94103. (415) 356-5270.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and section 3.25 of
the Commission's Rules of Practice (16 CFR 3.25), notice is hereby
given that the above-captioned consent agreement containing a consent
order to cease and desist, having been filed with and accepted, subject
to final approval, by the Commission, has been placed on the public
record for a period of sixty (60) days. The following Analysis to Aid
Public Comment describes the terms of the consent agreement, and the
allegations in the accompanying complaint. An electronic copy of the
full text of the consent agreement package can be obtained from the
Commission Actions section of the FTC Home Page (for May 29, 1997), on
the World Wide Web, at ``http://www.ftc.gov/os/actions/htm.'' A paper
copy can be obtained from the FTC Public Reference Room, Room H-130,
Sixth Street and Pennsylvania Avenue, NW., Washington, DC 20580, either
in person or by calling (202) 326-3627. Public comment is invited. Such
comments or views will be considered by the Commission and will be
available for inspection and copying at its principal office in
accordance with section 4.9(b)(6)(ii) of the Commission's Rules of
Practice (16 CFR 4.9(b)(6)(ii)).
Analysis of Proposed Consent Order to Aid Public Comment
The Federal Trade Commission has accepted an agreement, subject to
final approval, to a proposed consent order from Jenny Craig, Inc., and
Jenny Craig International, Inc. (hereinafter ``Jenny Craig'' or
``respondents''), marketers of the Jenny Craig Weight Loss Program. The
Jenny Craig Weight Loss Program is offered to the public nationwide
through company-owned and franchised clinics.
The proposed consent order has been placed on the public record for
sixty (60) days for the reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and any comments received and will decide whether it should
withdraw from the agreement and take other appropriate action or make
final the agreement's proposed order.
The Commission's complaint alleged that the respondents deceptively
advertised: (1) their program's success in helping customers achieve
and maintain weight loss; (2) the time frame within which consumers
will achieve their desired weight loss goals; (3) the purchase price of
the program; and (4) the extent to which Jenny Craig customers would
recommend the program to others. The complaint further alleged that
respondents engaged in the deceptive practice of failing to warn
clients whom they monitor of the health importance of following the
diet protocol.
Weight Loss and Weight Maintenance Success Claims
The complaint against Jenny Craig alleges that the company failed
to possess a reasonable basis for claims it made regarding the success
of its customers in losing weight and maintaining the weight loss
achieved on the program. Through consumer testimonials and other
advertisements, Jenny Craig represented that its customers typically
are successful in reaching their weight loss goals and in maintaining,
either long-term or permanently, the weight loss achieved under the
Jenny Craig program.
The proposed consent order seeks to address the alleged success
misrepresentations cited in the accompanying complaint in several ways.
First, the proposed order, in Part I.A., requires the company to
possess a reasonable basis consisting of competent and reliable
scientific evidence substantiating any claim about the success of
participants on any diet program in achieving or maintaining weight
loss. To ensure compliance, the proposed order further specifies what
this level of evidence shall consist of when certain types of success
claims are made:
(1) In the case of claims that weight loss is typical or
representative of all participants using the program or any subset of
those participants, that evidence shall be based on a representative
sample of: (a) all participants who have entered the programs where the
representation relates to such persons; or (b) all participants who
have completed a
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particular phase of the program or the entire program, where the
representation only relates to such persons.
(2) In the case of claims that any weight loss is maintained long-
term, that evidence shall be based upon the experience of participants
who were followed for a period of at least two years after their
completion of the respondents' program, including any periods of
participation in respondents' maintenance program.
(3) In the case of claims that weight loss is maintained
permanently, that evidence shall be based upon the experience of
participants who were followed for a period of time after completing
the program that is either: (a) generally recognized by experts in the
field of treating obesity as being of sufficient length to constitute a
reasonable basis for predicting that weight loss will be permanent; or
(b) demonstrated by competent and reliable survey evidence as being of
sufficient duration to permit such a prediction.
Second, Part I.B. of the proposed order requires the respondents,
when making any claim that participants of any diet program have
successfully maintained weight loss, to disclose the fact that ``For
many dieters, weight loss is temporary.'' In addition, Part I.C.
requires respondents to disclose the following information relating to
that claim:
(1) the average percentage of weight loss maintained by those
participants (e.g., ``60% of achieved weight loss was maintained''),
(2) the duration over which the weight loss was maintained,
measured from the date that participants ended the active weight loss
phase of the program, and the fact that all or a portion of the time
period covered includes participation in respondents' maintenance
program(s) that follows active weight loss, if that is the case (e.g.,
``Participants maintain an average of 60% of weight loss 22 months
after active weight loss (includes 18 months on a maintenance
program)),'' and
(3) the proportion of the total participant population that those
participants represent, if the participant population referred to is
not representative of the general participant population for that
program (e.g., ``Participants on maintenance--30% of our clients--kept
off an average of 66% of the weight for one year (includes time on
maintenance program)).'' (In lieu of that factual disclosure,
respondents may state: ``Jenny Craig makes no claim that this result is
representative of all participants in the Jenny Craig program).''
Third, for maintenance success claims made in broadcast
advertisements of thirty-seconds or less duration, the proposed order,
in Part I.D., provides that Jenny Craig, in lieu of making the factual
disclosures set out in Part I.C., may (1) include in such
advertisements the statement ``Check at our centers for details about
our maintenance record,'' and (2) provide consumers at point-of-sale
with a document containing certain maintenance information, which
includes the factual disclosures required by Part I.C. The proposed
order specifies that this document must be signed by the client and
retained in the company's client file.
The proposed order makes clear that the alternative disclosure
requirement contained in Part I.D. does not relieve Jenny Craig of the
obligation to substantiate any maintenance success claim in accordance
with Part I.A. of the proposed order. In addition, the proposed order
specifies that, if Jenny Craig makes a maintenance success claim that
uses numbers or descriptive terms that convey a quantitative measure,
such as ``most of our customers maintain their weight loss long term,''
Jenny Craig would have to make all the disclosures required by Part
I.C. in the ad and provide the disclosures at point-of-sale.
Fourth, Part I.E. of the proposed order addresses weight-loss and
weight-loss maintenance success claims, made through endorsements or
testimonials, that are not representative of what Jenny Craig Weight
Loss Program participants generally achieve. Part I.E. requires
respondents to disclose either what the generally expected success
would be for Jenny Craig customers, or the limited applicability of the
endorser's experience to what consumers may generally expect to
achieve. The proposed order's treatment of testimonial claims is in
accordance with the Commission's ``Guides Concerning Use of
Endorsements and Testimonials in Advertising'' 16 CFR 255.2(a). Under
the proposed order, Jenny Craig may disclose ``generally expected
success'' by use of the following format in the relevant advertisement:
``Weight loss averages__lbs. over__weeks.'' Alternatively, respondents
may disclose in the advertisement the average number of pounds lost by
their customers, and provide to each potential customer, prior to
entering into an agreement, a form containing more detailed weight loss
information. Respondents may disclose ``limited applicability'' by use
of one of several alternative statements, such as ``This result is not
typical. You may be less successful.''
Finally, the proposed order, in Part I.L., generally prohibits the
company from misrepresenting the performance or efficacy of any weight
loss program.
Rate of Weight Loss Claims
The Commission's complaint further alleges that Jenny Craig failed
to possess a reasonable basis for its claim made during initial sales
presentations that consumers will typically reach their desired weight-
loss goals within the time frame set by the company's computer program.
To address this practice, Part I.I. of the proposed order prohibits
Jenny Craig from representing that prospective participants will reach
a specified weight within a specified period of time, unless
respondents possess and rely upon competent and reliable scientific
evidence substantiating the representation. Part I.J. of the proposed
order would prevent respondents from misrepresenting the rate or speed
at which any program participant has experienced or will experience
weight loss.
Price Claims
The Commission's complaint against Jenny Craig also alleges that
the company falsely represented that the price it advertised for its
diet program is the only cost associated with losing weight on the diet
program, when, in fact, there are substantial additional mandatory
expenses that far exceed the advertised price. The complaint further
alleges that respondents failed to disclose adequately to consumers the
existence and amount of all mandatory expenses associated with
participation in the diet program.
The proposed consent order seeks to address these practices in four
ways. First, Part I.F. of the proposed order prohibits untrue
representations that an advertised price for a weight loss program is
the only cost associated with losing weight on that program. Second,
for any advertisement containing a price at which any weight loss
program can be purchased, Part I.G. of the proposed order requires
Jenny Craig to disclose either the existence and amount of all
mandatory costs or fees associated with the program offered or a
statement identifying a list of all products or services that
participants must purchase at an additional cost. This disclosure must
be made orally under the proposed order if the price representation is
made orally in broadcast media.
Third, Part I.H. of the proposed order requires the respondents to
disclose over the telephone to callers who inquire or are told about
the cost of any weight loss program, the existence and amount of any
mandatory costs or fees
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associated with participation in the program. Finally, Part I.L.
generally prohibits the company from misrepresenting the price of any
weight loss program.
Health Risks Claims
According to the complaint, Jenny Craig provides its customers with
diet protocols that require the customers to come into one of proposed
respondents' centers once a week for monitoring of their progress,
including weighing in. In the course of regularly ascertaining weight
loss progress, respondents, in some instances, have been presented with
weight loss results indicating that customers are losing weight
significantly in excess of their projected goals, which is an
indication that they may not be consuming all of the food prescribed by
their diet protocol. According to the complaint, such conduct could, if
not corrected promptly, result in health complications. The
Commission's complaint alleges that Jenny Craig failed to disclose to
consumers who were losing weight significantly in excess of their
projected goals that failing to follow the diet protocol and consume
all of the food prescribed could result in health complications.
The proposed consent order seeks to address this allegation in two
ways. First, the proposed order, in Part I.K., requires Jenny Craig to
disclose in writing to all participants, when they enter the program,
that failure to follow the program protocol and eat all of the food
recommended may involve the risk of developing serious health
complications. Second, the proposed order, in Part I.L., generally
prohibits any misrepresentation concerning the safety of any weight
loss program.
Customer Satisfaction Claims
The complaint also alleges that Jenny Craig deceptively advertised
that ``nine out of ten'' Jenny Craig clients would recommend Jenny
Craig to their friends. The complaint further alleges that the
company's claim that competent and reliable studies or surveys
substantiate the ``nine out of ten'' claim was false.
The proposed order seeks to address these claims in two ways.
First, Part I.M. would require respondents to possess competent and
reliable evidence (which when appropriate must be competent and
reliable scientific evidence) for any representation that participants
on any weight loss program recommend or endorse the program. Second,
Part I.N. would prevent respondents from misrepresenting the existence,
contents, validity, results, conclusions, or interpretations of any
test, study, or survey.
The purpose of this analysis is to facilitate public comment on the
proposed order, and it is not intended to constitute an official
interpretation of the agreement and proposed order, or to modify in any
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 97-14678 Filed 6-4-97; 8:45 am]
BILLING CODE 6750-01-M