01.Peter Foster's involvement hidden
The Federal Court has found SensaSlim Australia (now in liquidation) engaged in misleading or deceptive conduct by failing to disclose Peter Foster’s involvement in the SensaSlim franchise system in its disclosure document. Regular CHOICE readers may remember Foster from previous “ventures” including miracle weight loss tea products, money laundering and the Cherie Booth Blair property fiasco.
The Court also found that SensaSlim, which received a CHOICE Shonky in 2011, engaged in misleading or deceptive conduct by making false representations about the role of SensaSlim’s officers Peter O’Brien and Michael Boyle, the “worldwide clinical trial” of the SensaSlim Solution, and the earning potential of SensaSlim franchises.
'Fabricated' worldwide clinical trial
SensaSlim supplied an oral spray, the SensaSlim Solution, which was supposed to cause weight loss. The company told franchisees that the product had undergone "a large worldwide clinical trial". In his judgment, Justice Yates said that the so-called worldwide clinical trial was “a fabrication, intended to lead prospective franchisees into the false belief that the efficacy of the SensaSlim product as weight loss product had been established scientifically”.
The SensaSlim Solution was distributed through franchisees to be on-sold to consumers through retail outlets. Franchisees paid $59,950 each to SensaSlim, which earned approximately $6.4 million from these franchise sales.
Foster’s involvement hidden
In his judgment, Justice Yates also found: “the evidence presents a convincing picture of Mr Foster as the puppeteer who pulled all the strings… Mr Foster controlled and directed, in an executive capacity, the way in which the SensaSlim business was carried on.”
ACCC Deputy Chair Dr Schaper said: “This case was particularly significant because Mr Foster went to great lengths in order to hide his involvement in the SensaSlim business from franchisees and others. The disclosure of Mr Foster as an officer of SensaSlim would have been particularly important to any potential franchisee, given the court orders which prevented Mr Foster from being knowingly concerned in the promotion or conduct of any business relating to weight loss, cosmetic or health industry products or services”.
Interpol alert reportedly issued
The news comes on the back of an Interpol alert reportedly being issued for Peter Foster, after he failed to front a hearing late last year.