60,000 Suckered In ‘Quackery’ Scam

International cooperation between Australian and American agencies has shut down an internet medical eBook scam.

The Australian Competition and Consumer Commission (ACCC) has been successful in its attempt to stop two New South Wales individuals from selling dodgy eBooks that claim to cure a range of illnesses including acne, asthma, multiple sclerosis, fibromyalgia, menopause and prostate cancer.

The ACCC has obtained final orders, by consent, in the Federal Court of Australia against two individuals, Leanne Rita Vassallo and Aaron David Smith of Cecil Hills, New South Wales, for false, misleading and deceptive conduct in relation to a health cure scam.
The scam was brought to the ACCC’s attention by the Washington State Attorney General’s Department and the Australian consumer body’s investigation was carried out in conjunction with them. The US State has also filed its own proceedings against Vassallo and Smith in the King County Court, Washington State, US.

The ACCC’s court action alleged that over two years Vassallo and Smith operated a large number of websites selling the misleading eBooks, which were sold to more than 60,000 consumers internationally.

The websites were similar as each was dedicated to a particular medical condition. They featured a person who had supposedly suffered from the condition and had purportedly discovered an effective home remedy. Across a number of different websites the photograph of the author was the same, but with different names. The websites also contained testimonials from happy users of the eBooks. The testimonials were from the same people across numerous different websites. The ACCC’s expert evidence was to the effect that the treatments would not have any therapeutic benefits for, or medical efficacy in the treatment of the health conditions.

On 30 July 2009 before Justice Moore, the ACCC obtained interlocutory injunctions, by consent, restraining Vassallo and Smith from engaging in the conduct on any website pending final hearing.  The injunctions also required the respondents to take down the websites.

At the final hearing on Thursday 20 August 2009, Justice Graham, in an ex tempore judgment, found that Vassallo and Smith had engaged in false, misleading and deceptive conduct.

He described them as “purveyors of quack medical advice and of quack medicine.”
He reached the conclusion that the testimonials were plainly contrived. He noted that the evidence showed that the respondents had received more than $US 1 million from the sale of the eBooks.

Justice Graham also made injunctions on a final basis preventing the respondents from making these or similar representations in the future. The respondents were also ordered to pay the ACCC’s costs.



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