The Australian Competition and Consumer Commission has instituted proceedings against Greenstar Co-operative Ltd and a group of other related companies and associated directors alleging they were involved in an illegal pyramid and referral selling scheme.
The other companies are: Bio Enviro Plan Pty Ltd, Buyplus Commodities Brokers Pty Ltd, and Greenstar Management Pty Ltd.
The ACCC has also alleged that the companies misled consumers and made false representations about the attributes of a transaction card and an earthworm farming program which were part of the pyramid selling scheme.
The ACCC alleged the Greenstar conduct breaches a number of the consumer protection provisions of the Trade Practices Act 1974.
The Greenstar scheme has been extensively promoted on the Internet and at public meetings in capital cities across Australia. The ACCC alleged consumers were induced by Greenstar to join the scheme by promising members a worldwide business that could generate lifelong, residual income, 24 hours a day, seven days a week, from seven different streams of income, without the member leaving his or her home.
Further, the ACCC alleged Greenstar and the directors have claimed to prospective members that:
- Greenstar members who paid US$30 per month for 36 months and who wished to leave the scheme would receive their money back in full
- Greenstar was in negotiations for 'transaction cards' which would shortly be in use and these cards could be used by companies for paying employee payrolls, to pay their commission agents and by charity and non-profit organisations, and that the transaction charge from these users would be returned to the members 'world pool' providing the potential for huge returns to members
- Greenstar is the major shareholder in Australian Environmental Technologies and that dividends from these shares would flow into the Profit-Share pool, with AET anticipating an April/May 2001 float
The ACCC alleged these representations were false, misleading or deceptive.
The ACCC is seeking court orders, including urgent interim injunctions, against Greenstar, the other companies, and the directors. The orders sought include declarations of breaches of the law; injunctions stopping similar conduct in the future; refunds for affected consumers; and a compliance program and costs. A directions hearing will be held in the Federal Court, Perth before Justice Nicholson on 14 June 2001 at 11.45 a.m.