Shark Challenge 2000 promoters settle ACCC action

Universal Sports Challenge Limited, the promoter of the Shark Challenge 2000 Golfing Competition, today settled a legal action bought against it by the Australian Competition and Consumer Commission, Professor Allan Fels, said today.

The ACCC instituted legal proceedings on 8 April 2002 against USCL for alleged misleading and deceptive conduct in relation to the promotion of the competition. The ACCC alleged that USCL offered consumers an opportunity to compete in a golfing final to be held in Australia (the National Final) and for those who qualified in the top half of that final, an opportunity to compete in a second final to be held overseas (the International Final), when it had no intention of providing for an International Final.

In fact, the International Final was not held at an overseas destination, but rather at Pelican Waters, Caloundra, Queensland, Australia on the weekend of 27-28 January 2001.

The ACCC also instituted legal proceedings against Mr Michael Kotowicz, the Chief Executive Officer of USCL at the time, for allegedly being knowingly concerned in USCL's conduct. The ACCC's legal proceedings continue against Mr Michael Kotowicz, who is defending the case.

The competition was publicised throughout 2000 on the www.sharkchallenge.com.auInternet site, in national newspapers, radio and in printed materials available through golfing clubs at golf courses, from golfing shops and newsagencies. Competitors entering the competition paid a membership fee of $55.

After the commencement of the ACCC's investigation USCL provided refunds of the $55 membership fee to approximately 3, 720 competitors, totalling $204, 600, so it became unnecessary for the ACCC to seek refunds from the court.

"The running of promotional competitions such as the Shark Challenge 2000 Golfing Competition, can be a valuable and effective marketing tool", Professor Fels said . "However considerable care must be taken by companies that run such promotions, that prizes offered to consumers are supplied as offered. In the present case USCL's promotion of the Shark Challenge 2000 Competition did not alter for sometime after it was apparent that the overseas final would not be supplied.

"Where the terms or conditions of a competition change, it is essential that promoters of a competition take immediate steps to cease making misleading representations and inform consumers of the change".

USCL has consented to the following orders before the Federal Court:

• declaration that USCL, in breach of section 52 of the Trade Practices Act 1974, engaged in misleading and deceptive conduct by representing that a second final at an overseas destination would be awarded to successful participants of the competition when no such prize was awarded

• declaration that USCL breached section 54 of the Act, as it had the intention of not providing or of not providing as offered, a second final at an overseas destination

• an injunction restraining USCL offering gifts, prizes or other free items, in relation to the promotion of sporting events, with the intention of not providing such gifts, prizes or other free items or from engaging in similar misleading conduct in the future

• an order requiring USCL to send a corrective letter to affected consumers.