Medifast unit settles false ad claims for $3.7 million

WASHINGTON Fri Sep 7, 2012 11:58am EDT

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WASHINGTON (Reuters) - A subsidiary of Medifast Inc agreed to pay a $3.7 million civil penalty and meet new compliance requirements to settle a federal complaint that its claims about weight-loss products were false.

Jason Pharmaceuticals Inc, a wholly owned Medifast subsidiary, did not admit liability, according to a consent decree filed on Friday in U.S. District Court for the District of Columbia.

The company, the U.S. Justice Department and the Federal Trade Commission are parties to the consent decree.

Advertisements for the "Medifast 5 & 1 Plan" low-calorie diet told consumers they could "lose up to 2-5 pounds per week." It did not have a reasonable basis in scientific evidence to support the claims, the government agencies said.

Jason Pharmaceuticals said in July that it expected to reach a consent agreement with the Federal Trade Commission over an investigation into its advertising.

Medifast did not immediately respond to a request for comment on Friday.

(Reporting by David Ingram; Editing by Gerald E. McCormick and Leslie Gevirtz)

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