ACCC acts against alleged false business sales

The Australian Competition and Consumer Commission, through the Director of Public Prosecutions, has filed criminal proceedings in the Federal Court in Adelaide against Queensland based companies Back to Basics Worldwide Education Aids Systems Pty Ltd, Hartwich Pty Ltd, and the companies directors John Moon (aka John Robert Croke) and Wayne Baker.

The companies and directors are alleged to have placed advertisements in newspapers such as The Age, The Sydney Morning Herald, and The Advertiser.

These invited people to invest up to $65,000 to become distributors in a business activity known as 'Back to Basics' selling a range of educational aids such as wristwatches, posters, and wall charts to primary school students and parents. At least seven distributors were recruited, mainly couples.

The ACCC alleges that representations were made which were false or misleading in relation to profitability and risk, in particular claims that:

• high sales returns had been achieved;
• incomes of up to $150,000 per annum could comfortably be earned; and
• other distributors were doing well.

In addition to penalties the ACCC will seek redress in the form of refunds and rescission of contracts. The matter is set for hearing in the Federal Court, Adelaide, on 26 April 2000.