The Advanced Medical Institute Pty Limited and its Managing Director, Mr Jacov Vaisman, engaged in misleading or deceptive conduct when advertising various impotency treatments to its potential patients, the Federal Court declared yesterday.
The declarations were made by consent following Australian Competition and Consumer Commission action.
Mr Vaisman was declared to be personally involved in the unlawful conduct.
AMI operates a number of impotency clinics in capital cities and regional centres around Australia. From February 2001 until April 2002, AMI made representations in newspaper advertisements and promotional materials about the suitability and effectiveness of its treatments and the nature of its services.
The Federal Court declared that AMI breached the Trade Practices Act 1974 by making misleading or deceptive representations.
For example, AMI claimed that:
- its treatments would provide guaranteed results when in fact treatments for impotence and erectile dysfunction cannot be guaranteed;
- no needles would be involved when in actual fact self injection treatments were regularly prescribed by AMI to some patients;
- its treatments were suitable for men of all ages with almost any medical condition when in fact erectile dysfunction is less responsive to treatment in older men and men with certain conditions, such as diabetes;
- all its treating doctors had six years of experience in sexual medicine when many of its doctors did not;
- its doctors were supervised by Dr Lionel Jacobs, a consulting urologist, when he did not supervise most treating doctors;
- it would provide full refunds of the treatment cost if it was ineffective but refunds were not paid to all patients when the treatment did not work;
- a 12 month impotency treatment program was most beneficial for cure when expert evidence indicated that a 12 month course of injection therapy is no more likely to provide a cure than programs of a shorter duration;
- the IntraGlans Gel treatment was both simple and convenient to use and acted in just five to 10 minutes when in fact it was not easy to use for some men and took longer than claimed to produce a full erection; and
- the IntraGlans Gel has no side effects when in actual fact there are a range of potential side effects.
The court made injunctions preventing AMI from engaging in misleading and deceptive conduct in the future in relation the impotency treatments it formerly or presently supplies.
It also declared that Mr Vaisman had been directly or indirectly, knowingly concerned, or a party to, the contraventions of the Act by AMI. He has also been injuncted from being directly or indirectly knowingly concerned, or a party to, making such misrepresentations in the future, whether with AMI or with any other corporation.
The court also ordered that AMI:
- publish corrective notices once a week in various newspapers circulating throughout Australia for six weeks; and
- implement a trade practices compliance program.
AMI also agreed to provide full refunds to more than 160 patients who, despite seeking a refund on the basis that the treatment they had been prescribed was not effective, had not yet had all money refunded.
"The main focus of the ACCC in taking this case was to ensure that Mr Jacov Vaisman, the individual within AMI responsible for the misleading or deceptive claims, was held accountable and prevented from repeating the conduct whether through AMI or any other company", ACCC Chairman, Mr Graeme Samuel, said today.
"This case shows the ACCC will act against persons in corporations responsible for misleading or deceptive claims to ensure that they are held personally liable for their conduct.
"It also reinforces the ACCC's commitment to protecting vulnerable consumers from companies such as AMI which make unsupportable claims about the efficacy of the services they offer.
"The ACCC recognises that in cases involving sensitive medical conditions, such as male impotency, customers who have been misled may be reluctant to complain and even more reluctant to appear as witnesses in any subsequent trial. In this regard, the ACCC would particularly like to thank each of the former AMI patients who were willing to assist the ACCC by giving evidence at the trial*, so that the practices of AMI could be stopped".
*NB: A two to three week trial of this matter was set to commence on 1 December 2003 before Justice Tony Whitlam. On this first day of the trial, and prior to the ACCC leading any evidence in the trial, AMI entered into negotiations to settle the proceedings.