ACCC leads international internet sweep for health scams

29 January 2002

Cyber health scams around the world are under the microscope this week as the Australian Competition and Consumer Commission and other consumer and health protection authorities from Australia and up to 30 other countries begin searching thousands of websites to uncover shonky health claims.

The International Marketing Supervision Network Internet Sweep is targeting websites which offer 'miracle' health products and services, as well as sites promoting legitimate products as if they have properties they do not have.

The IMSN is a network of consumer protection authorities of 30 countries. Its main objective is to take action to prevent and redress deceptive marketing practices with an international component. The Network fosters cooperative efforts by member authorities to tackle consumer problems connected with cross-border transactions in both goods and services. Exchange of information between authorities also plays a key role in effective investigations and court action where necessary.

Due to the growth of the Internet, cross-border consumer transactions are increasing. This brings challenges for law enforcement. The IMSN is based on action, rather than policy discussion, which is the role of the OECD Committee on Consumer Protection. The Sweep Day is a significant annual event on the IMSN calendar.

"While the advent and proliferation of the Internet has been valuable for societies around the world, there are unscrupulous business people who are using the medium to make a fast dollar by taking advantage of vulnerable consumers", ACCC Chairman, Professor Allan Fels, said today.

"For example, many people turn to the Internet because it provides consumers easy access to information about their health concerns. However, it is important for consumers to be aware that the Internet also provides promoters of fraudulent health products and treatments easy access to consumers from all over the world. Health scams not only waste consumers' money, but in extreme cases may harm their well being.

"People's health is their most valuable asset. Businesses preying on those suffering from a genuine illness or affliction will not be tolerated in any society.

"Worryingly, there seems to be a belief in some quarters that the Internet means 'anything goes' and this business medium is a 'free for all'. This is not true and suggests a misunderstanding or ignorance of the consumer protection parts of the Trade Practices Act and equivalent Fair Trading Act of the States and Territories".

The ACCC is an active player in the IMSN. As well as being the International Sweep Day Coordinator, the ACCC will be taking on the Presidency of the Network in the coming financial year, with the first of two conferences to be held in September 2002. The ACCC is also bringing joint actions with other authorities wherever possible.

"The IMSN is a valuable forum for addressing scams of this nature, and the ACCC is happy to be playing its part in helping to stamp out Internet fraud", Professor Fels said.

The ACCC's Canberra office will house the main Sweep Room, with other regional Sweep centres in ACCC offices in Melbourne, Sydney, Adelaide, Perth and Brisbane.

The ACCC has expanded its activities to expose and punish individuals and businesses which prey on unwitting and vulnerable consumers of health products. Past cases where the ACCC has achieved success in stopping cyber health scams include Purple Harmony Plates, advice about Chronic Fatigue Syndrome, Australian Institute of Permanent Makeup, Giraffe World, and Listen Systems.

The ACCC is alleging misleading and deceptive conduct about health products in a number of current cases such as Crowded Planet, Slender Tone and Buyers World.

Purple Harmony Plates Pty Ltd claimed its product could perform a list of tasks, from protecting against electromagnetic radiation, to strengthening the immune system, and lowering body stress and fatigue levels. A Federal Court judge found that these claims could not be reasonably demonstrated and ordered the company to publish a corrective statement on its website.

In the case of Crowded Planet, David Zero Population Growth Hughes was allegedly supplying contraceptive pills over the Internet without a prescription, a practice which is illegal in Australia. He also allegedly made comments on his website which indicated that he had ACCC approval to do so. The trial has been held and judgement reserved.

IMSN agencies provide the following tips to avoid health fraud:

  • If it sounds too good to be true, it probably is
  • Beware of products or treatments that are advertised as a quick and effective cure-all for a wide range of ailments or for an undiagnosed pain
  • Be cautious of testimonials claiming amazing results
  • Watch out for promoters who use phrases such as "scientific breakthrough," "miraculous cure," "exclusive product," and "secret ingredient"
  • Before you purchase, consult your pharmacist, doctor or other health professional.

Consumers who believe they have been a victim of a health scam on the Internet can call and report the matter to the ACCC Infocentre on 1300 302 502.

Professor Allan Fels, ACCC Chairman, will be available in the Canberra Sweep Room, Level 4, 470 Northbourne Ave, Dickson ACT, from 11am to 12pm today to answer questions.

Other organisations present in the Canberra Sweep Room include the Consumer Affairs Division of the Treasury, the Therapeutic Goods Administration, and the ACT Office of Fair Trading.

Other Australian venues for the sweep include:

Melbourne, VIC – 11am – 12pm Contact: Tom Fahy (03) 9290 1860
Level 35, 360 Elizabeth St Melbourne

Mr Sitesh Bhojani, ACCC Commissioner responsible for health matters and ACCC representation at the IMSN will be available to the media, along with the Honourable Marsha Thomson, Minister for Consumer and Business Affairs, and Ms Beth Wilson, Victorian Health Services Commissioner.

Sydney, NSW – 11am – 12pm Contact: Rose Webb (02) 9230 9133
Level 7, Angel Place, 123 Pitt St Sydney

Ms Amanda Adrian, Commissioner, NSW Health Care Complaints Commission.

Perth, WA – 11am – 12pm Contact: Larry Kelly (08) 9325 3622
Level 3, 233 Adelaide Terrace Perth

Mr David Kerslake, Director, Office of Health Review, WA.

Brisbane, QLD – 11am – 12pm Contact: Alan Ducret (07) 3835 4666
Level 10, 500 Queen St Brisbane

Adelaide, SA – 11am – 12pm Contact: Bob Weymouth (08) 8213 3453
Level 1, 13 Grenfell St Adelaide

The 30 IMSN Member Countries are:

Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Japan
Korea, Republic of
Latvia
Luxembourg
Malta
Mexico
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
Spain
Sweden
Switzerland (current President)
UK
USA

Release number: 
MR 014/02
ACCC Infocentre: 

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