Business Blog
Phenomenal abdominals? Not so fast, Ab Circle Pro.
If you haven’t heard of the Ab Circle Pro, you need to spend more time in your recliner. Between the infomercial blitz, the online presence, and a retail campaign that promoted the product with a prominent “As Seen on TV” logo, ads were everywhere. The marketers claimed that using the device for just three minutes a day would lead to a 10-pound weight loss in two weeks and inches off the stomach, hips, and thighs — benefits equal to or better than longer workouts at the gym.
But before you rush to your phone, you should know that according to an FTC lawsuit, those claims were misleading. The settlement offers something for consumers and businesses: refunds totaling between $15 million and $25 million for people who bought the Ab Circle Pro and important compliance tips for companies.
The Ab Circle Pro is a two-foot fiberglass disk with knee rests and handles. Users hunker down and twist their hips around, purportedly to exercise their abs. The infomercial told people they could get a 30-day risk-free trial of the product for $14.95 plus shipping and handling. The actual price ran between $200 and $250, plus $35 or more for delivery.
The ads promised impressive results with minimal work:
- "In fact, with the Ab Circle Pro System, we guarantee you'll lose ten pounds in just two weeks or your money back.“
- "Best of all, it’s fun and easy and takes just three minutes a day.“
- "Burns Fat Faster than Treadmill!“
- "You can either do 30 minutes of abs and cardio or just three minutes a day. The choice is yours.”
In addition to charging that the weight loss, fat loss, and “just three minutes a day” claims were misleading, the FTC says the marketers reinforced those claims via numerous consumer testimonials. But according to the complaint, the representation that users would get similar fast results was deceptive. The FTC also alleged that infomercial host Jennifer Nicole Lee’s claim that she lost 80 pounds using the product was false.
The FTC’s complaint names 13 different individuals and companies — you’ll want to read the court papers for details — but certain aspects of the lawsuit merit special attention.
For example, the complaint charges Fitness Brands, Inc., and Fitness Brands International, Inc., the companies that first marketed the Ab Circle Pro. But it also names corporate officers Michael Casey and David Brodess individually. In addition, the FTC sued infomercial producer Tara Borakos and her companies, Tara Productions and New U, Inc.
Also charged were infomercial host Jennifer Nicole Lee and two companies she controls. According to the complaint, Ms. Lee, who made the allegedly false 80-pound weight loss claim, earned royalties on sales of the product.
Usually it’s the commercial that says “But wait! There’s more!” But this time we’re talking about the FTC’s complaint, which names The Readers Digest Association, Inc., as a “relief defendant.” Here’s why: In 2009, a company called Direct Entertainment Media Group, Inc., got the rights to market and distribute the Ab Circle Pro in the United States. A related company — Direct Holdings Americas, Inc. — created, reviewed, and approved marketing materials for the product. Both Direct Entertainment Media Group and Direct Holdings Americas are wholly owned subsidiaries of The Reader’s Digest Association, Inc.
The FTC’s complaint names the two subsidiaries, but also includes The Reader’s Digest Association. As the complaint explains, Reader’s Digest “has received funds that were derived from consumers as a consequence of Defendants’ unlawful acts and practices” and “has no legitimate claim to those funds.” What’s the practical effect? Under the settlements, the Fitness Brands defendants will pay $1.2 million in consumer refunds. Direct Holdings Americas, Inc., Direct Entertainment Media Group, Inc., and The Readers Digest Association will pay at least $13.8 million and as much as $23.8 million depending on the volume of refund requests.
Buyers can find out about refunds here.
Businesses, read our next post for more on what the settlement means for you.
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