ACCC institutes against StoresOnline and Galaxy Mall for allegedly deceiving consumers about e-commerce home business opportunities
The Australian Competition and Consumer Commission has instituted legal proceedings against StoresOnline International Inc, Galaxy Mall Inc and a Gold Coast resident, Mr Brett Perkins, alleging they have been engaging in misleading and deceptive conduct and other contraventions of the Trade Practices Act 1974 over the sale and promotion of home business e-commerce software packages.
The ACCC obtained the following orders on 1 June 2005 on an ex-parte basis:
an injunction preventing StoresOnline and Mr Perkins from transferring funds outside the jurisdiction of Australian courts, pending further hearings on the case
an order that, prior to the commencement of all remaining seminars or workshops to be conducted by StoresOnline in Australia, StoresOnline inform participants that the ACCC has commenced proceedings in the Federal Court of Australia seeking orders restraining StoresOnline from making misleading or deceptive representations.
StoresOnline is incorporated in Utah in the USA, and does not have any registered offices in Australia. Galaxy Mall is a registered foreign corporation.
The ACCC alleges that StoresOnline conducts seminars and workshops in capital cities across Australia, including Sydney, Melbourne, Perth, Adelaide and Brisbane as well as large regional centres.
The seminars are known variously as "Internet Cashflow Conferences" or "Internet Marketing Conferences", and participants are allegedly given the opportunity to purchase StoresOnline software and internet marketing tutorials for the purpose of setting up web based e-commerce businesses. The prices paid by purchasers for a StoresOnline package varies from approximately $2500 to approximately $5500.
The ACCC alleges that StoresOnline has engaged in conduct in breach of sections 52, 53, 55A and 59 of the Trade Practices Act 1974 as a result of making misleading or deceptive representations to participants of its seminars or workshops in Australia. The ACCC also alleges that Galaxy Mall was knowingly concerned in the alleged breaches by StoresOnline of the Act.
The orders the ACCC is seeking are intended to restrain StoresOnline from making a number of alleged misleading and deceptive representations to participants at seminars or workshops conducted in Australia, including that:
the software and tutorial package provided by StoresOnline for the purposes of setting up websites was easy to use
no previous computer knowledge or experience with the Internet was necessary to set up websites using a StoresOnline package
StoresOnline would provide support 24 hours a day, 7 days a week
specific services associated with setting up and maintaining websites were included in the StoresOnline package and purchasers would not be required to pay an additional amount
a testimonial of a person who purchased a StoresOnline package was unscripted and spontaneous, and
a person giving a testimonial about a StoresOnline package was not affiliated with StoresOnline, or a company associated with it.
The matter has been listed for hearing before the Federal Court, Sydney tomorrow (3 June 2005) for further consideration of the injunctive relief sought by the ACCC.
