Power Balance goes bust

ACCC action puts local distributor out of business
 
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  • Updated:1 Jun 2011
 

01.Power-balance-goes-bust

After an ACCC ruling last December forcing the distributor of Power Balance in Australia to remove claims of "performance technology" from its packaging, the company is in receivership with a reported $800,000 in unpaid debt.

Power Balance quick reviewShonky claims backfire

The ACCC’s insistence last year that the importer of Power Balance come clean and admit there is no evidence behind its claims has put an end to the business.

According to the online business publication, SmartCompany, Power Balance Australia owner Tom O'Dowd placed his importing business in receivership yesterday with about $800,000 in outstanding debts. The wristband, which has seen brisk sales in the US, was given a Shonky award by CHOICE last year, a move that was commended by ACCC chairman Graeme Samuel.

The ACCC required O’Dowd to remove any reference to “performance technology” on the product’s packaging and warned retailers they would be fined for selling products that still made that claim. Power Balance is a combination of rubber, a magnet and holograms and promises to improve balance, strength and flexibility by harnessing the wearer’s “energy field”. CHOICE tested the product in August 2010 and found it delivered no performance benefits.

O’Dowd says he continues to believe in Power Balance’s effectiveness and was not aware that promoting it was a potential violation of consumer law. “We thought we were selling a sporting product and we didn't realise that we were subject to the Therapeutic Goods Act,” O’Dowd said.

Samuel made a number of media appearances denouncing the product and used the occasions to warn consumers to beware of similarly dubious claims.

O’Dowd says the ACCC’s intervention meant no retailers were willing to buy Power Balance even after the “performance technology” wording was removed from its packaging early this year. He has reportedly left for a previously planned hike on the Kokoda Track but says he will return to face his creditors.

 
 

 

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