29 April, 2003
ACCC Obtains $1.2m Refunds For Misled Consumers
Following action by the Australian Competition and Consumer Commission, a fund of $1.2 million is to be made available to refund consumers who were misled or deceived by the promoters of a health and fitness product.

The Buyers Group Pty Ltd broadcast 'advertorials' promoting an electronic muscle stimulation machine called the Feminique Slimming System from October 1999 to August 2001. The advertorials were broadcast on Network Ten's Good Morning Australia and Bright Ideas programs and Seven Network's Morning Shift. The Feminique was also promoted on the company's website at www.buyersgroup.com.au.

The Buyers Group represented that the Feminique had the following performance characteristics:

•  that it can exercise, tone, firm or pull back into shape any part of the user's body without effort by the user;
• that it burns up fat;
• that it can flatten the user's stomach without any effort by the user;
• that it can result in the user losing three kilograms in weight and reducing the user's waist measurements by three centimetres in a matter of four weeks; and
• that it is ideal for those who want to see effective and immediate results.

By consent of both parties, Justice Cooper of the Federal Court declared that the representations made by The Buyers Group in relation to the Feminique were misleading or deceptive and in breach of the Trade Practices Act 1974.

The Federal Court has ordered that corrective advertisements be broadcast on Network Ten's Good Morning Australia program and on the company's website for two weeks.

The Buyers Group has agreed to make $1.2 million available for refunds to consumers who purchased a Feminique on the basis of the company's misleading claims.

Consumers who believe they have been misled regarding their purchase of the Feminique will have 28 days from the conclusion of the advertisements to apply for a refund.

The Court also found that The Buyers Group's sole director, Mr Josephus Schoonenberg, and an employee, Ms Marianne Schoonenberg, were knowingly concerned in the conduct.

Further, the court ordered by consent:

• permanent injunctions restraining The Buyers Group Pty Ltd and the two individuals from representing that the Feminique has the claimed performance characteristics; and
• each of the individuals knowingly concerned attend a Trade Practices Compliance Seminar with the purpose of ensuring compliance with the Trade Practices Act 1974.

"This is an important decision for consumers", ACCC Chairman, Professor Allan Fels, said today. "The ACCC was concerned that unsuspecting consumers were enticed to purchase the Feminique Slimming System as a result of The Buyers Group showing advertisements featuring fit, slim and toned people. The ACCC was concerned that everyday people were being conned into believing that by using the Feminique they too could look like the people in the advertisements.

"The health and fitness industry needs to be aware that if they are going to make claims in relation to the benefits consumers can achieve as a result of using their products, they need to have a reasonable basis for making the claims otherwise consumers can be misled".

Consumers who purchased a Feminique from The Buyers Group on the basis of these misleading and deceptive claims should contact the ACCC Infocentre on 1300 302 502 or refer to the ACCC website for more information.

Further information Professor Allan Fels, Chairman, pager (02) 6285 6170

Ms Lin Enright, Director, Public Relations, (02) 6243 1108 or (0414)613 520

MR 81/03 29 April 2003

BACKGROUND

The ACCC received a complaint from the Office of Fair Trading, Sydney alleging that The Buyers Group Pty Ltd made misleading representations while marketing a health and fitness product called the Feminique Slimming System. Numerous advertorials for this product appeared on Network Ten's Good Morning Australia and Bright Ideas programs, and on The Buyers Group's website at www.buyersgroup.com.au

During advertisements on Good Morning Australia, The Buyers Group made the following claims regarding the product:

• "Feminique makes it possible to exercise nearly every muscle in the whole body not only in the comfort of your own home but while you are lying on the couch";
• "I lost three kilos and three centimetres off my waist in just four weeks without exercising";
• "I love my new abs. Thanks, Feminique";
• "Exercise the easy way";
• "Immediate and effective results";
• "Stimulates exercise but you don't end up exhausted";
• "No pain no gain? Well that doesn't apply any more";
• "Can generate over a thousand contractions in half an hour"; and
• "Burns off fat"

The advertisements claimed that the Feminique used the known benefits of electronic muscle stimulation, which historically has been used to tone inactive or weak muscles. They claimed the Feminique sent electric impulses between electrodes attached to pads that were, in turn, attached to the skin. The electric impulses caused muscle spasms designed to simulate exercise.

The ACCC instituted proceedings against The Buyers Group Pty Ltd, Mr Josephus Schoonenberg and Ms Marianne Schoonenberg in the Federal Court Brisbane on 27 July 2001.

On 10 August 2001 Justice Dowsett granted interim injunctions by consent against The Buyers Group Pty Ltd and the individual respondents.