Medifast Faces Stiff FTC Fine

WASHINGTON, D.C.A subsidiary of diet plan marketer Medifast Inc. will pay a $3.7 million civil penalty to settle Federal Trade Commission (FTC) charges that it violated a previous agency order by making unsupported claims about its weight-loss program. As reported by FTC, Jason Pharmaceuticals, a unit of Medifast, has agreed to settle FTC charges that weight-loss claims in the companys advertisements for meal-replacement products violated a 1992 FTC settlement order, which barred it from making any unsupported claims about users success in achieving or maintaining weight loss or weight control (see Subsidiary of Diet Plan Marketer Medifast Inc. to Pay $3.7 Million to Settle FTC Charges).

This enforcement action is part of the FTCs ongoing effort to ensure that companies comply with FTC orders, and the agencys crackdown on deceptive and misleading health claims. Under the FTC Act, companies may be liable for civil penalties of up to $16,000 per violation of an FTC order per day.

Filed on the FTCs behalf by the Department of Justice, the complaint against Jason Pharmaceuticals alleges that the company made unsupported representations since at least Nov. 2009 in radio, television, Internet and print advertisements that consumers using Medifast programs and products would lose two to five pounds each week. The company also represented that the experiences of consumer endorsers featured in the advertisements were typical, and that consumers would lose more than 30 pounds.

Under the new settlement order, Jason Pharmaceuticals is prohibited from misrepresenting that consumers who use any low-calorie meal replacement program, including the Medifast 5 and 1 plan, can expect to achieve the same results that an endorser does, or can lose a particular amount of weight or maintain the weight loss. FTC notes that such representations must be non-misleading and backed by competent and reliable scientific evidence that consists of at least one adequate and well-controlled human clinical study of the low-calorie meal replacement program, or a study that follows a protocol detailed in the settlement order.

Under the settlement order, the company also is prohibited from making any other representation about the health benefits, safety, or side effects of any low-calorie meal replacement program, unless the representation is non-misleading and backed by competent and reliable scientific evidence that is generally accepted in the profession to yield accurate results. The company also is prohibited from misrepresenting that any doctor, health professional, or endorser recommends a weight-loss product, program, service, drug, or dietary supplement.