For Your Information: February 27, 1998
The Federal Trade Commission today announced the following action.
Consent agreements given final approval: Following a public comment period, the Commission has made final consent agreements with the following entities. The Commission action makes the consent orders binding on the respondents.
- The consent agreement with Sears, Roebuck and Co., Hoffman Estates, Illinois, settles FTC charges that Sears made certain misrepresentations in inducing consumers who filed for bankruptcy protection to agree to reaffirm their Sears credit account debts. The FTC alleged that Sears falsely represented that these "reaffirmation agreements" would be filed with the bankruptcy courts, as required by law, and that the consumers would be legally obligated to pay. The FTC also alleged that consumers whose reaffirmation agreements were not filed with the bankruptcy courts were subject to illegal collection activity by Sears. The consent order prohibits Sears from misrepresenting that any reaffirmation agreement it obtains will be filed with the bankruptcy court, that any reaffirmation agreement is binding, or any other material fact while attempting to collect debts subject to a pending bankruptcy proceeding. In addition, the order bars Sears from collecting debts that have been discharged in bankruptcy proceedings. The consent order also preserves the FTC's right to file an action in federal district court to seek full redress for consumers if Sears' refunds to debtors pursuant to a separate class action lawsuit settlement total less than $100 million. (See news release dated June 4, 1997 for further details about this case; Docket No. C-3786. The Commission vote to issue the consent order as final was 4-0, with Commissioner Mary L. Azcuenaga not participating. Staff contact is David Medine, 202-326-3224, or Paul Block, 617-424-5960.)
- The consent agreement with Jenny Craig, Inc. and Jenny Craig International, Inc., Del Mar, California, resolves deceptive advertising charges in connection with the diet program's claims about weight loss, weight loss maintenance, price and safety, as well as its use of consumer testimonials and endorsements. The settlement covers future claims, including testimonial claims, about weight loss and weight loss maintenance. The agreement sets out the types of evidence needed to support Jenny Craig's future weight loss and weight loss maintenance claims. It requires that claims about maintenance success include additional disclosures about the actual maintenance experience of Jenny Craig's customers, as well as the statement "For many dieters, weight loss is temporary." In addition, under the agreement, Jenny Craig would state, in connection with any atypical testimonial about weight loss or maintenance success, the generally-expected success for program participants or indicate that dieters should not expect to experience similar results. (See news releases dated May 29, 1997, and November 18, 1997, for further details about this case; Docket No. 9260. The Commission vote to issue the consent order as final was 3-0, with Chairman Robert Pitofsky recused and Commissioner Mary L. Azcuenaga not participating. Staff contact is Jeffrey Klurfeld or Matthew Gold, 415-356-5276.)
Copies of the documents referenced above are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-3128; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
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