Injunction against Destiny Telecomm Internation Inc continued

7 March 1997
An injunction against US-based multi-level-marketing phonecard company, Destiny Telecomm International Inc, has been continued today in the Federal Court, Sydney. The injunction prevents the company and Australian representatives and promoters from promoting the scheme, or any like scheme, known as Destiny Telecomm International's Binary Marketing Program.

The Australian Competition and Consumer Commission last week was granted an ex parte injunction to prevent the scheme's formal launch, on the basis that the scheme appeared to breach the Trade Practices Act. The scheme, as promoted, involves consumers purchasing a phonecard for approximately $100 for international, STD and/or mobile telephone use. If those consumers introduce further customers to the scheme, they receive a commission. The amount of commission increases according to the number of customers introduced. The Court restrained all but one respondent and accepted undertakings from Julian Timothy Cooper, trading as Destiny Telecomm International in Australia (which is allegedly not related to the US company), that the scheme would not be promoted. ACCC Chairman, Professor Allan Fels, said the ACCC had moved quickly to gain injunctions because it understood more than 14,000 people had become involved in the promotion which it believed breached the Trade Practices Act.

"Further, people had given authorisation for debits from their credit cards to an overseas company. The ACCC sought to prevent these monies being removed from the Australian jurisdiction." Since the ACCC had taken its action, it had learned that State and civil prosecutions had begun in the United States over the scheme. "The ACCC understands that a search warrant has been served on the US company and a $US 20 million lawsuit has begun. An Alameda County judge has frozen Destiny's assets and appointed an outside receiver to oversee the firm's finances." Justice Lehane in the Federal Court, Sydney stood the ACCC action over to 25 March 1997.

Further information Professor Allan Fels, Chairman, (03) 9290 1812 or pager (016) 373 536 Ms Lin Enright, Director, Public Relations, (06) 264 2808
Release number: 
MR 022/97