The $41k problem with this Jenny Craig ad

Jenny Craig's lose 10kg for $10 ad has cost the company almost $41k in penalties. Photo / Jenny Craig

Weight loss company Jenny Craig has been forced to pay almost AU$38,000 (NZD $41,000) in penalties for allegedly misleading consumers on its lose 10kg for $10 advertisement.

The Australian Competition and Consumer Commission (ACCC) issued three infringement notices for alleged false or misleading representations in breach of the Australian Consumer Law.

From December 2017 to February 2018, Jenny Craig promoted in television advertisements that people could lose up to 10kg of weight for a $10 program fee, without adequately disclosing customers also had to purchase food at an additional cost, according to the Australian consumer watchdog.

In a statement, the ACCC said they were "concerned" that the advertisements "misled consumers into thinking they could participate in a Jenny Craig program and lose 10kg for $10".

"In reality customers would have had to spend far more than that," ACCC commissioner Sarah Court said.

Jenny Craig also failed to disclose that a person featured in an online testimonial video for its services was a Jenny Craig employee.

"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," Ms Court said.

In addition, Jenny Craig's standard form membership agreement represented that customers' refund rights in relation to faulty products required the customer to notify Jenny Craig within three days and return faulty products within 10 business days in their original packaging.

Mel B is an ambassador for Jenny Craig. Photo / Jenny Craig

"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 co-operated during the ACCC's investigation and took steps to rectify the conduct.

In a statement to news.com.au, Jenny Craig said: "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."