Smoking out cyber snake-oil merchants - News - Business

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This story was printed from ZDNet Australia.
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Smoking out cyber snake-oil merchants

By Andrew Colley, 0
January 30, 2002
URL: http://www.zdnet.com.au/news/business/soa/Smoking-out-cyber-snake-oil-merchants/0,139023166,120263185,00.htm

The Australian Competition and Consumer Commission sent a clear message that it won't tolerate online health-scam promoters yesterday.

"People's health is their most valuable asset. Businesses preying on those suffering from a genuine illness or affliction will not be tolerated in any society," said ACCC chairman, Professor Alan Fels in a prepared statement.

Backing the Professor's statements, the ACCC is co-ordinating a global dragnet operation targeting cyber-quacks offering miracle cures, and online marketers using deceptive and misleading practices to promote health products.

Yesterday, 13 Australian health and consumer authorities across five states searched the Web for three-hours in an effort to uncover 'cyber-shonks'. The ACCC said the Australian operation has brought an unspecified number of sites, offering cures for ailments ranging in seriousness from cancer and Ross River fever to hangover, under its scrutiny.

Australia operated alongside consumer protection authorities in 29 other countries belonging to the International Marketing Supervision Network (IMSN). The ACCC said the global network plays a vital role in taking action against fraudulent operators trading across international borders.

If the ACCC's recent successes in bringing health scams to heel provide a lesson, it may be harder for online frauds to exploit the legal vagaries of cyber-space than pornographers. However, the ACCC's commissioner in charge of health, Sitesh Bhojani, said that some have tried.

Purple Harmony Plates, failed to evade legal action brought against it for fraudulent activity last year, by claiming that its online practices fell within the jurisdiction of domain name registration regulatory codes enforced in Virginia -- the home state of its US parent company.

According to Bhojani, in that case a federal court judge found that the local licensee of the domain name was capable of acting independently of it US parent and ordered it to remedy its behaviour.

If cyber-frauds are looking for better legal loopholes Bhojani probably won't be losing sleep over it.

"If we can't take action against an operator locally we'll be going to our counter-parts overseas to seek prosecution," he said, explaining the benefits of acting in concert with IMSN.

The Australian watchdog also announced that it would soon take on the role of presiding over IMSN, relieving the network's current president, Sweden.