Distribution scheme 'business opportunity' draws ACCC's first public warning

The Australian Competition and Consumer Commission today issued its first Public Warning Notice.

The Notice has been issued concerning the conduct of the following corporations:

• Halkalia Pty Ltd, a corporation whose principal place of business is Smithfield South Australia, and whose sole director is Mr Norman Lander
• Heartlink Enterprises Pty Ltd, a corporation whose principal place of business is Broadford Victoria and whose sole director is Ms Vicki Lowe, and
• National Semi Retired Group Pty Ltd, a corporation whose principal place of business is Springvale Victoria, and whose sole director is Mr Laurence Hann.

The ACCC can issue a Notice if it has reasonable grounds to suspect the conduct may breach certain provisions of the Trade Practices Act 1974; is satisfied that one or more persons has suffered, or is likely to suffer, detriment as a result of the conduct; and is satisfied that it is in the public interest to do so. A key consideration for the ACCC in issuing a Notice is whether it considers there is an imminent need to inform consumers so they can avoid suffering detriment.

In this matter, the ACCC suspects the companies breached the Act by making misleading claims about the income from the business opportunity the companies promote, that is, delivering Heartlink-branded household products to independent supermarkets.

The 'part time delivery business' is advertised in rural, regional and metropolitan newspapers and claims earnings of between $900 and $2,000 per week for between three to four days' work. The ACCC considers the companies have no reasonable basis on which to claim these income projections and the conduct may constitute contraventions of the Act.

The Public Warning Notice follows complaints from individuals who paid between $10,000 and $30,000 for a business.  The majority have earned no income and none have reached the projected figure.

An example advertisement is shown:

The ACCC is warning the public that the advertisements may be misleading and that individuals who pay money for the advertised business opportunity may derive no earnings from the business.

PW 01/10