ACCC penalises Jenny Craig for its “10kg for $10” TV ads
The Australian Competition and Consumer Commission (ACCC) has taken action to reiterate the importance of transparency between businesses and consumers by requiring adequate disclosure.
The ACCC action has also emphasised the importance of consumer rights to a refund for faulty products or services.
The ACCC announced on 5 June 2018 that it had has issued planned meal program provider Jenny Craig with three infringement notices totalling $37,800 for alleged false and misleading representations made in its “10kg for $10” television advertisements which aired between December 2017 and February 2018.
The ACCC alleged that Jenny Craig not only failed to adequately disclose to customers that food had to be purchased at an additional cost but also that the person featured in the online testimonial video was a Jenny Craig employee.
The Australian Consumer Law, which is designed to protect consumers, expressly prohibits businesses from making false or misleading claims regarding the price of goods or testimonials regarding goods.
The ACCC Commissioner, Sarah Court said ‘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.’
She also said that ‘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.’
In addition, the ACCC alleged that Jenny Craig’s membership contract misrepresented customers’ rights to a refund in relation to faulty products – requiring customers to notify Jenny Craig and return the products in their original packaging within 10 days.
Ms Court said ‘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.’
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