The companies marketing the Ab Circle Pro exercise device have agreed to pay as much as $25 million in refunds to customers to settle federal regulators' charges of deceptive advertising.
The Federal Trade Commission says it was deceptive to promise that people could lose 10 pounds in two weeks by using the abdominal exercise device for only three minutes a day. The TV infomercials touted the fiberglass disk with handlebars and knee rests selling for $200 to $250.
The FTC had filed a civil lawsuit against the companies. In the settlements announced Thursday, Fitness Brands Inc., Fitness Brands International Inc., Direct Holdings Americas Inc. and Direct Entertainment Media Group Inc. agreed to pay a total of at least $15 million and up to $25 million, depending on the amount of refunds requested.
Consumers should carefully evaluate advertising claims for weight-loss products, the FTC said.
Reader's Digest Association Inc., which ran print ads for the device, also agreed to contribute to the refunds. The magazine was named as a relief defendant in the FTC's suit filed Wednesday in federal court in Miami. That means it wasn't accused of wrongdoing but the FTC sought to recover money from the magazine that the agency said it received from Direct Holdings Americas and Direct Entertainment Media Group, its subsidiaries, as proceeds from the deceptive advertising.
Fitness Brands Inc., Fitness Brands International and Michael Casey and David Brodess, who the FTC says control the companies, agreed to pay a total $1.2 million. Direct Holdings Americas, Direct Entertainment Media Group and Reader's Digest together are paying $13.8 million and up to an additional $10 million, depending on the volume of customer' refund requests.
The TV infomercials ran more than 10,000 times between March 2009 and May 2010, according to the FTC. Pitchwoman Jennifer Nicole Lee said in the commercials that the Ab Circle Pro enabled her to lose 80 pounds.
In addition, the device was sold on the Internet, in stores and in print ads.
Lee and her two companies agreed in the settlement not to falsely claim that the device, or any similar device, exercise equipment, food or drug contributed to her weight loss.
The FTC said marketers should "think twice" before promising magic solutions to health problems. "Weight loss is hard work, and telling consumers otherwise is deceptive," David Vladeck, director of the agency's consumer protection bureau, said in a statement.