Oregon Department of Justice

Attorney General Ellen F. Rosenblum

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AG SUES LA WEIGHT LOSS AND ITS OREGON FRANCHISEE

July 13, 2007

Attorney General Files Lawsuit Against LA Weight Loss And Franchisee For Allegedly Misrepresting Program Costs And Benefits

Oregonians complain of company's deceptive advertising in marketing its weight loss program

Attorney General Hardy Myers today filed a lawsuit against LA Weight Loss Franchise Company (LA Weight Loss) and an Oregon franchisee alleging false and misleading representations about the costs, fees, products, and benefits associated with the program. Named in a complaint filed in Marion County Circuit Court is LA Weight Loss Franchise Company, a Delaware corporation operating out of Horsham, Pennsylvania, and an Oregon franchisee, NWM, Inc., of Lake Oswego.

The Oregon LA Weight Loss franchisee, NWM, Inc., currently has locations in Clackamas, Corvallis, Eugene, Gresham, Lloyd (Portland), McMinnville, South Salem, Sherwood, Tanasbourne (Portland), Washington Square (Tigard), and Wilsonville. It also operated locations in Bend and North Salem.

The lawsuit alleges that LA Weight Loss and its franchisee violated Oregon's Unlawful Trade Practices Act (UTPA) by advertising that the program could be purchased for only $9 a week when, in fact, consumers were required to pay hundreds of dollars for the entire program at the time of enrollment. In addition, the lawsuit alleges that customers were presented with the actual cost of "LA Lites", so-called nutritional bars that are in reality similar to candy bars, three to four days after enrollment. Customers were then told that to take advantage of the "guarantee" and "rebate' of half the program costs, they must eat these bars throughout the program. Today's price for a box of seven bars is $16 or, if purchased in bulk at the beginning of the plan, $10.50. The LA Weight Loss program includes eating two bars a day for the initial "weight-loss weeks" plus during an additional six weeks of "stabilization". Consumers also must eat one bar per day for the following "maintenance" year.

The lawsuit also alleges that advertised one-on-one counseling with an "individualized" menu plan was, in fact, one of eight menu plans based on general factors such as amount of weight to lose, age and gender.

The lawsuit further alleges that LA Weight Loss and its franchisee have no competent and reliable scientific evidence to substantiate effectiveness claims about their "dietary supplements" such as asserting that one of their supplements "FB 500" normalizes blood pressure.

During the investigation of consumer complaints, DOJ found the company's advertising to be misleading in many aspects, including use of the word "guarantee". The so-called "guarantee" had nothing to do with guaranteeing weight loss but was instead a "guarantee" that customers can stay on the weight loss program until they reach their target weight. In order to maintain the "guarantee", customers must strictly adhere to the plan and use the required amount of "LA Lites".

DOJ also found that so-called "counselors" available for one-on-one counseling were in reality staff (many of them former customers) who had no health or nutritional training or experience; however, they wore white lab coats and took customers' medical history and blood pressure. In addition, the "counselors" pushed customers to buy the "LA Lites", supplements and other products to meet weekly sales quotas.

"Although the LA Weight Loss franchisee was quick to give refunds to Oregonians who complained to our office, the misleading marketing continued," Myers said. "It's always good to offer disgruntled consumers their money back but if the company continues to operate in the same misleading manner, the refunds are just "smoke screens" devised to hide the intentional violation of law."

DOJ opened its investigation file as to LA Weight Loss in September 2005 and attempted to negotiate a settlement agreement with the companies from the beginning of 2006 through this week. After months of stalling by the companies, DOJ issued a deadline for agreement and filed suit when the deadline was not met.

Today's lawsuit seeks restitution for Oregon consumers covering most costs and fees connected with joining the weight loss program, including payments for "LA Lites" and any "dietary supplement". The lawsuit also asks for civil penalties of $25,000 for each UTPA violation and for attorney fees and investigative costs.

In addition, the lawsuit seeks permanent changes in the way the companies market their products and to require that they only use competent and reliable scientific evidence to substantiate their claims.

"Oregonians of all ages should be generally cautious when choosing the right weight loss program," Myers explained. "Consumers should first consult with their doctor or nutritionist before obligating themselves to an expensive program that may or may not work for them."

Myers also suggested researching diet programs online and at the local library. For example, Consumer Reports, a nationally recognized consumer magazine, rates diet books and plans in its July 2007 issue. The report is online at www.consumerreports.org.

Consumers wanting more information about this lawsuit and other consumer protection issues may call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392. The Department of Justice is online at www.doj.state.or.us.

Contact:

Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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