ACCC takes contempt action against Advanced Medical Institute

24 August 2015

The Australian Competition and Consumer Commission has commenced proceedings in the Federal Court against NRM Corporation Pty Ltd and NRM Trading Pty Ltd (together, NRM) alleging contempt of court.  NRM owns and operates the business known as the Advanced Medical Institute (AMI).

“The ACCC alleges that NRM has breached orders made by Justice North on 22 April 2015, in earlier proceedings brought by the ACCC. In those proceedings, Justice North found that NRM engaged in unconscionable conduct and used unfair contract terms in the way that it promoted and supplied medical services and medications to men suffering from sexual dysfunction,” ACCC acting Chair Delia Rickard said.

Justice North made orders against NRM that permanently restrain NRM from making representations to consumers regarding:

  • the efficacy of AMI treatments; or
  • a patient’s need for AMI treatments and any adverse consequences resulting from a consumer not obtaining such treatments, unless the representations are made by a qualified medical practitioner during a consultation in person or via video-link.

“The ACCC alleges that NRM has breached Justice North’s orders by statements or representations made on the AMI website and in television and radio advertisements,” Ms Rickard said.

NRM has appealed from the judgment of Justice North. The appeal is scheduled to commence before the Full Court of the Federal Court on 16 November 2015 in Melbourne.  Following the appeal being lodged, NRM sought a stay of Justice North’s orders, pending the outcome of the appeal.  This stay application was refused.

A directions hearing for the ACCC proceedings alleging contempt will be listed in the Federal Court in Melbourne.

Background

The ACCC instituted proceedings against the companies formerly known as Advanced Medical Institute Pty Ltd and AMI Australia Holdings Pty Ltd (together, the AMI companies) and Mr Jacov Vaisman in December 2010.  At that time the ACCC was concerned that the AMI companies had engaged in conduct that took advantage of vulnerable consumers.  When the AMI business was subsequently sold to NRM, the ACCC remained concerned that the conduct was continuing and, as a result, NRM was joined to the proceedings.

See: ACCC alleges unconscionable conduct in promotion and supply of men's sexual dysfunction treatment program – December 2010

On 22 April 2015 the Federal Court found that the AMI companies and NRM, by operating the AMI business, engaged in unconscionable conduct and used unfair contract terms in the way it promoted or supplied male sexual dysfunction products.

The Court also declared that Mr Vaisman, who was a director and CEO of the AMI companies, then subsequently NRM, aided and abetted and was knowingly concerned in the unconscionable conduct by the AMI companies and NRM. Mr Vaisman was restrained for a period of seven years from having a role in connection with training, supervising or counselling or terminating employees, agents or contractors of NRM.

See also: Federal Court finds Advanced Medical Institute engaged in unconscionable conduct – April 2015

Release number: 
MR 153/15
Media enquiries: 
Media team - 1300 138 917

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