Full Court upholds unconscionable conduct finding against Advanced Medical Institute

The Full Court of the Federal Court of Australia has dismissed an appeal against the decision of Justice North that Advanced Medical Institute had engaged in unconscionable conduct through its business promoting services and medications for men suffering from sexual dysfunction.

In dismissing NRM’s appeal, the Full Court rejected NRM’s arguments that the trial judge had made errors of fact and law in finding that NRM had engaged in unconscionable conduct targeting vulnerable consumers by its advertising and sales techniques.  The Full Court noted that this vulnerability related to the particularly sensitive and personal nature of the services supplied by NRM and the sales techniques employed by the salespeople, and was well supported by the evidence.

The Full Court upheld an order made by Justice North permanently restraining NRM from making statements and representations to any patient or prospective patient as to the efficacy of NRM treatments unless they are made by a medical practitioner in a face to face or video consultation.  The Full Court considered “There remains a continuing need, and there remains a factual foundation, for an order restraining the Appellants from advertising in a manner which has the potential to exploit the vulnerable”.

The Full Court also dismissed Mr Vaisman’s appeal against orders restraining him from having a role in connection with training, supervising or counselling or terminating employees, agents or contractors of NRM for a period of seven years.

ACCC Chairman Rod Sims said: “The ACCC brought these proceedings because NRM sought to exploit consumers’ vulnerability for its own commercial gain, by targeting vulnerable consumers with unconscionable advertising and sales techniques”.

“This case provides a clear message that businesses must not take advantage of consumers who are vulnerable or disadvantaged. Consumer issues in the health and medical sector are a priority for the ACCC. We will not hesitate to take appropriate enforcement action where businesses in this sector are exploiting the vulnerability of consumers,” Mr Sims said.

This appeal judgment follows an earlier finding by Justice Moshinsky that NRM was guilty of contempt for failing to comply with the orders made by Justice North prohibiting NRM from making statements about the efficacy of NRM treatments unless the statements are made by a duly qualified medical practitioner during a consultation in-person or by video-link.  A hearing on penalty for NRM’s contempt will be heard on a date to be fixed.

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