ACCC obtained

These panels are generally the best way for consumers to find the information they deed to make an informed decision?they can develop their understanding of nutritional content beyond the claims made on labels by food companies. Here are some of the more common food labeling issues to be aware of today. ‘Fat free’?Fat free products are often attractive to people watching their weight. However, products that are fat free but loaded with sugar may not be ideal?sugars not used up as energy are converted to fat by the body for storage.

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When deciding what to buy, pay particular attention to the declared energy (kilojoules) level per serving. ‘X per cent at’?The percentage of fat on the front of the product label is usually fat as a per cent of the total ingoing weight of the product and not fat as a per cent of the total calories of the product. As most products naturally contain a lot of water (oven fries are about 60 per cent water) a small percentage of fat by total weight can end up being a much larger portion of the calories.

While this conduct is not illegal, deceptive advertising is. In 1999 the AC obtained undertakings from the makers of Harvest Bake So Slim bars to remedy their misrepresentations after tests revealed hat their Country Snack Delights Muesli & Apricot and Fruit Cocktail varieties contained significantly more fat than the 2 per cent advertised. ‘Salt free’?Because ‘salt’ refers to sodium chloride, products using sodium but not sodium chloride are labeling their food correctly.

Dietitians and nutritionists generally recommend, however, that people with high blood pressure monitor their intake of sodium, not just salt. Endorsement schemes, logos and trademarks While such labeling can make the food selection process easier, there is room for confusion. A tick logo similar to that used by the National Heart Foundation was gently withdrawn from use by egg producer GO Drew. The AC had expressed concerns that the logo may have misled consumers to believe these egg products had Foundation approval. Consumers should be aware that such endorsement standards.

Artificial flavors Finally, food packaging with ‘raspberry flavored’ and ’30 per cent fruit Juice’ on the packaging does not need to contain any raspberry whatsoever, Just raspberry flavoring and 30 per cent of some type of fruit Juice, for example, apple Juice. Food marketing companies must ensure that they clearly distinguish flavored products room products containing actual food ingredients . This month the Federal Court found that representations on the packaging and labeling of Academy Speeches’ Coyote’s banana-mango and apple-kiwi flavored cordials were likely to mislead consumers about their contents.

The court found that pictures on the labels of bananas and mangos would have conveyed the impression to some consumers that the products contained real bananas and mangos, when the cordial did not. Greater cooperation between the AC and FAGAN is an important step in continuing to monitor misleading food labeling. Remember, there is no substitute for thoroughly investigating nutritional content yourself. However if you consider you have been misled, contact the AC Inference on 1300 302 502.

The Greensward Pyramid scheme A Federal Court decision this month has granted compensation for only two out of 14 833 participants in the illegal pyramid and referral selling scheme known as Greensward. In this month’s ruling, Justice Nicholson found that a general order for compensation would be futile as the Greensward group of companies are insolvent, the main force behind the Greensward scheme, Mr. Kevin Robert Smith, died in China, and he remaining two directors have filed for bankruptcy.

What was Greensward? The sales pitch The Greensward scheme began with a worm farming investment scheme called The Bio Environ Plan. Investors initially paid $220 of which $60 was for 2 goof worms and $160 an ‘administration fee’. Investors were required to appoint Bio Environ Plan Pity Ltd to manage the worms to generate the income, and to pay them a further monthly fee of $24 for this service. The total investment of $1084 came with an unqualified guarantee of a return to investors of $9500 after 36 months.

The buyers never saw the promised return on investment. In August 2000 the main operators behind the worm farm began to market the Greensward Scheme that was to incorporate a transaction card into the worm investment program. Prospective members were told they could earn more than IIS$20 000 a month from their membership and that the Western Australian Ministry for Fair Trading had approved the scheme. The operators promoted the scheme at public meetings in Australia, and globally on the internet and via email.

It was promoted as a way of gaining lifelong, residual income, 24 hours a day, 7 days a week, without having to leave your home. People who signed p as members paid IIS$1 50, and thereafter $30 a month, for which they were entitled to the use of a ‘Greensward International Debit Card’, ownership of 1 goof worm stock and management services for the worm stock. A proportion of the new member fees and income from card transaction charges were to be distributed among existing members in amounts depending on their position in the nine classes of membership.

Members were told that the Greensward card would be available by 19 August 2000 and could be used for making purchases, transferring money and making cheap international telephone calls. In fact, at the time of their sale, the The cards were not distributed by 19 August 2000 as promised, or at any other time. As the months went by some Greensward members contacted the AC with concerns about the similarities between Greensward and the promises of World Netscape, another ATM card pyramid scheme being pursued by the AC.

After investigations, the AC instituted proceedings against Greensward in June 2002. In March 2003 the Federal Court in Perth found that the Greensward group of companies had promoted an illegal pyramid and referral selling scheme, and that they had also engaged in false and sledding conduct in relation to that scheme. So before committing to a pyramid- like scheme, ask yourself these questions: Do the returns sound too good to be true? Pyramid schemes induce people to pay money by promising above average returns on investments.

The lure for Greensward members was returns of IIS$20 000 per month. Sound too good to be true? Then it probably is. Does your reward depend more on recruiting other people than on a share of products sold? Pyramid schemes are different to legitimate multi-level marketing. If you sign up to hold a kitchenware arty with your friends and your reward depends on how much you sell, rather than how many friends you recruit, this is legitimate multi-level marketing.

On the other hand, referral and pyramid selling schemes involve inducing consumers to buy goods or services by offering them certain contingent benefits following their purchase, such as a share of future members’ fees. Do you know the risks? By participating in a pyramid scheme and inducing others to Join, even if you are not aware it is such a scheme and even if you weren’t involved in setting it up, you may be in breach of the Trade Practices Act. The Greensward case shows that in addition to this, money invested in illegal pyramid schemes is likely to be unrecoverable.

Tellers broadband pricing The internet is an increasingly important part of life for many Australians, be it for business, study or recreation. As the online world becomes more complex, some consumers are finding that the access speeds provided by some modems are simply not able to keep up with their needs and are switching to broadband. High-speed broadband internet can be accessed through a regular telephone line using Asymmetric Digital Subscriber Line (ADDS) technology. Using your pre-existing telephone line avoids buying satellite equipment or installing cables.

ADDS has the potential to connect over 85 per cent of Australians to broadband internet at an affordable cost. Internet service providers (Sips) provide this ADDS service via the telephone network infrastructure owned by Tellers. Tellers charges Sips a fee for using the network, as well as providing its own direct retail service to consumers. This arrangement allows hundreds of competing companies (including Tellers) to provide retail ADDS, reducing the cost to consumers. This puts Tellers in a special arrest position.

The broadband service provision market depends on the prices Tellers sets for access to its network. In March this year, the AC issued Tellers with a competition notice after Tellers decided to reduce the price of its retail service to consumers to $29. 95 per month, while still selling its wholesale service to other Sips at prices in excess of Telltale’s retail offering. Sips complained that this made it difficult for them to compete with Telltale’s broadband offerings at the retail level. The AC acted quickly to signal its concerns about Telltale’s conduct in the broadband

The competition notice required Tellers to either modify or Justify its behavior within a reasonable period of time, or risk fines of up to $10 million, as well as $1 million for each day that the conduct continued. Tellers then released a revised pricing structure. The AC has welcomed the revision by Tellers and is currently examining the likely impact on the market of this new pricing structure. The AC will make an official announcement about the acceptability of the revised pricing structure at a future date.

The AC and the debt administrator The AC started proceedings on 13 April 2004 in the Federal Court, Adelaide against bet administrator Fox Seems and Associates alleging both misleading and deceptive conduct and unconscionable conduct. The AC alleges that Fox Seems extensively advertised ‘debt relief services throughout Australia via television, radio and print media, as well as through direct unsolicited mail to people they had identified as potential clients, via publicly accessible records.

In particular, the AC alleges that the company made several misleading or deceptive representations, including: that the proposed solution was not bankruptcy, or ‘an alternative to bankruptcy, when the reposed result actually involved committing an act of bankruptcy that the proposed solution released or relieved the customer from their debts, when in fact neither of these were true that the company’s consultants were professional debt management experts, when in fact consultant’s training comprised a 3-day course that the nature and amount of any charges were misrepresented or omitted entirely during discussions with the company’s consultants. The AC also alleges that the company engaged in unconscionable conduct by: targeting those consumers who were vulnerable because of their outstanding debts pressuring customers into complex arrangements, which many clients did not fully understand failing to adequately disclose the serious and long lasting repercussions of the proposed solution. The AC is seeking various remedies, including injunctions, refunds, declarations and costs.

While ASIA has had Jurisdiction for debt collection matters from 11 March 2002 the AC has acted in this instance because 1) most of the conduct occurred before that date; and 2) there is some doubt as to whether Fox Seems conduct amounted to the provision off financial service. This action forms part of the AC campaign to protect disadvantaged and vulnerable consumers. Paying the price for price-fixing On 6 April 2004, following AC action, the Federal Court ordered a former general manager of Chaste Corporation to pay a personal penalty of $25 000 for his involvement in resale price maintenance in the promotion and selling of the Trim weight-loss product.

The court has made injunctions restraining Mr. Cannonades from repeating this conduct for three years, and ordered that he also pay costs of $8000. Mr. Cannonades admitted that he recruited area managers to enter into agreements with Chaste stating that Chaste would be responsible for setting the price at which area managers sold Trim to retailers and that there would be no discounting or price cutting. This conduct breached the resale price maintenance provisions of the Trade Practices Act. AC Chairman, Mr. Garage Samuel, said today, ‘Resale price maintenance is price-fixing by suppliers?it stops competitive pricing and causes consumers to pay more than they should. That is why it is illegal. ‘ Consumer & community bodies meet on 18 May 2004.

The meeting will take place in Brisbane to give ICC members the opportunity to attend the launch of a new consumer organization?the Centre for Consumer and Credit Law (SLD). Chaired by AC Deputy Chair, Louise Sylvan, the ICC is a forum for discussing consumer issues, and comprises representatives of the AC and consumer and community bodies, such as the Australian Consumers Association, the Tasmania Council of Social Service and the Consumer Law Centre Victoria. At the last meeting, held in February, issues discussed included National Consumers Day, the Sac’s campaign to protect disadvantaged and vulnerable consumers, telecommunications, rural and regional issues, consumer complaint statistics and recent court cases.

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