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LA Weight Loss Settles With Washington ... Again

November 29, 2006

• Consumer Complaints • Health problems • Rebates • Refunds --- News • Pennsylvania Sues Pure Weight Loss • Oregon Sues LA Weight Loss and Franchisee • LA Weight Loss Settles With Washington ... Again • Washington Reaches Settlements with LA Weight Loss Program

It's an old story: the pounds come off, then the dieter slips back into those old habits and, soon, the pounds pile back on. Well, the same thing can happen to weight loss centers -- they can fall back into old habits.

Look at LA Weight Loss. Less than two years ago, it paid penalties to Washington State's to settle charges that it misrepresented its program costs and made unsubstantiated health claims.

And now, Washington state has reached new settlements with operators of LA Weight Loss diet centers, resolving allegations that the centers continued to misrepresent program costs and make unsubstantiated health claims even after paying penalties as part of a previous state lawsuit.

As part of the settlement terms, LA Weight Loss will refund the enrollment costs of some customers who received services in the state of Washington.

"Weight loss programs and health clubs have an ethical and legal obligation to describe how the program works and to clearly disclose all details about all costs, guarantees, and refund offers before customers decide to sign a contract," Attorney General Rob McKenna said. "In addition, claims about nutritional supplements or special foods they sell must be substantiated by competent and reliable scientific evidence."

The state filed agreements in Thurston and Spokane Superior Courts with two businesses, LA Weight Loss Centers, Inc., of Horsham, Penn., and NWM, Inc., of Lake Oswego, Ore.

"The Attorney General's Office settled with these same defendants last year, then launched a new investigation after we continued to receive complaints," McKenna said.

"We sent secret shoppers to all 19 LA Weight Loss locations in Washington who witnessed a classic bait-and-switch routine in which employees pushed the sale of protein bars and nutritional supplements after consumers had enrolled in the program. The products added hundreds or even thousands of dollars to the total program cost."

LA Weight Loss Centers, Inc., operates storefronts in Bellevue, Bellingham, Everett, Federal Way, Kent, Lacey, Lynnwood, Puyallup, Seattle, Silverdale, Tacoma and Tukwila. NWM operates centers in Kennewick, Longview, Salmon Creek, Spokane, Spokane Valley, Vancouver and Yakima.

The companies denied wrongdoing but each agreed to pay up to $50,000 in refunds to consumers who request reimbursement and received services in Washington. The refunds are solely for enrollment fees. They will pay additional money to cover attorneys' fees, costs and future monitoring; LA Weight Loss Centers will pay $50,000 and NWM will pay $40,000.

The agreements require LA Weight Loss diet centers to maker full disclose of all costs upfront and be consistent about indicating which products are or aren't a necessary part of the program.

The companies are prohibited from indicating their nutritional supplements have any health or weight loss benefit unless they can back those claims with competent and reliable scientific evidence. Health claims about their food products must be made in accordance with U.S. Food and Drug Administration regulations.

The settlements also require the companies to clearly disclose limitations of any program guarantee or rebate.

Assistant Attorney Jack Zurlini, who led both the 2005 and 2006 cases involving LA Weight Loss, said that in many cases, employees made claims about the benefits of these products that could not be proven.

"LA Weight Loss offered a written guarantee that was simply a promise to continue providing services for customers who achieved certain weight loss goals," Zurlini said. "But employees misrepresented it as a guarantee that customers would lose weight."

The state also alleged that LA Weight Loss Centers, Inc., failed to disclose all of the material terms of a rebate offer.

"LA Weight Loss Centers, Inc., customers were told they could get half of their enrollment fee refunded if and when they reached certain weight loss goals and maintained them," Zurlini said. "But the company didn't tell them up front that they had to purchase protein bars and other products and consume them as directed to be eligible for the rebate. The cost of the bars exceeded the rebate."

NWM had a similar rebate offer but did not require consumers to purchase food products to be eligible for it, Zurlini said.

In response to the state's latest investigation, both companies hired lawyers to review their sales practices and product claims and correct unfair or deceptive practices. In addition, LA Weight Loss Centers, Inc., eliminated the guarantee and rebate offers at its Washington diet centers and made its protein bars mandatory unless a customer is unable to consume them due to a medical reason.

The Attorney General's Office will send secret shoppers to the diet centers again in the near future.

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