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FOR IMMEDIATE RELEASE
November 27, 2006
Attorney General McKenna Announces New Settlements with LA Weight Loss Following Ongoing Complaints


SEATTLE – Attorney General Rob McKenna today announced new settlements with operators of LA Weight Loss diet centers in Washington. The agreements resolve allegations that LA Weight Loss 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 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,” 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 today in Thurston and Spokane Superior Courts with two businesses, LA Weight Loss Centers, of Horsham, Penn., and NWM, Inc., of Lake Oswego, Ore. 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 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.”

The agreements require LA Weight Loss diet centers to fully disclose 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 haveany health or weight loss benefit unless theycan 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.

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.

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

“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.

Refund Requests:
Consumers who believe they were misled when they enrolled in the LA Weight Loss program may request a refund of their enrollment fee. To be eligible, they must have enrolled in the program between Dec. 23, 2005, and Aug. 31, 2006, and received services from an LA Weight Loss diet center in Washington state.

Send a written request to the Attorney General’s Office, LA Weight Loss Centers, Inc., or NWM at one of the addresses below. Request must be received within 30 days.

For more information about refund requests, call the Consumer Protection Division at 1-800-551-4636 (toll-free available only in Washington State) or 509-458-3509.

  • Washington State Attorney General’s Office

Online: Refund requests can be made by filing a consumer complaint online atwww.atg.wa.gov. Click on “File a Complaint.”

By Mail: Consumers can also mail a complaint form or written request to the Attorney General’s Office Consumer Resource Center in Spokane. Complaint forms can be downloaded atwww.atg.wa.govor call 1-800-551-4636 (toll-free available only in Washington State) or 509-458-3509 to receive a form by mail. Send completed forms to:

Attorney General’s Office
Consumer Resource Center
Re: 2006 LA Weight Loss Settlement
West 1116 Riverside
Spokane, WA 99201-1194

  • LA Weight Loss Centers, Inc.

    Send a written request to:
    Marjorie H Gordon, General Counsel
    La Weight Loss Centers Inc
    747 Dresher Road – Suite 100
    Horsham, PA 19044
    Fax: (215) 346-8782

  • NWM

    Send a written request to:
    Diane Gilmore, Director of Training
    LA Weight Loss Centers

    5000 SW Meadows Road – Suite 151
    Lake Oswego, OR  97035
    Fax: (503) 620-0979                

Background:
The Attorney General’s Office reached agreements in December 2005 with LA Weight Loss Centers, Inc., NWM, Inc., and a third company, LA Weight Loss Franchise Company. LA Weight Loss Franchise Company is not a party in the new settlements because the Attorney General’s Office did not find evidence that it violated the 2005 settlement or the state’s Consumer Protection Act.

The 2005 settlements included $800,000 restitution for customers who paid enrollment fees or purchased certain products sold by LA Weight Loss diet centers in Washington between January 2004 and March 2005. Those refund periods have expired.

Additional Materials:
NWM, Inc. Assurance of Discontinuance
LA Weight Loss Centers, Inc. Assurance of Discontinuance

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Contacts: Kristin Alexander, Public Information Officer, (206) 464-6432
Jack Zurlini, Assistant Attorney General, (509) 458-3538

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