SensaSlim Assets Frozen over Bogus research

The Australian Competition and Consumer Commission has won an order to freeze SensaSlim’s assets after a continuing investigation found evidence of fraud for  the research for their weight-loss spray. SensaSlim, which is allegedly an intercontinental research institute based in Geneva, claimed they had strong weight-loss results from 11,000 voluntary users of its spray.

The ACCC made its first move last week without notice to SensaSlim, effectively freezing the company’s account while it contained $282,000 after it demonstrated strong evidence of fraudulent conduct being engaged in by SensaSlim; including the allegation that the Geneva-based ‘Institute’ that had reportedly conducted the study was fictitious.

Australian newspaper “The Age” questioned SensaSlim about photographs that were allegedly SensaSlim executives – After the discovery that they were in fact medical practitioners at a Minnesota Lung Clinic, and questioning by The Age the photos were later changed.

The ACCC contends that it appears that SensaSlim has perpetrated a calculated fraud and had to date extracted some $6 million for ‘area managership’. As a result, SensaSlim’s were refused their cross-application for release of part of the funds.

Since the action taken by the ACCC against SensaSlim,  The Age has also revealed that law firm Slater and Gordon would also bring legal representation against SensaSlim, which could see SensaSlim facing a $4.2 million class action by more than 70 people for misleading them in to buying a franchise to sell the bogus “weight-loss” product.

A Brief Timeline

A more in-depth look at this time line is viewable at the Victorian Skeptics website.

September 2010

  • SensaSlim is listed on the Australian Register of Therapeutic Goods (ARTG).

January 2011

  • The CRP receives an anonymous complaint about SensaSlim.

March 2011

  • The CRP meets to consider the anonymous complaint lodged about SensaSlim. The determination is not favourable, but the CRP gives more time for SensaSlim to respond despite their attempts to contact them and subsequently does not publish their determination.
  • Dr Ken Harvey lodges a complaint with the CRP about SensaSlim.
  • The CRP publishes their determination on the anonymous complaint on their website. Within one hour the determination is removed from the CRP website after receiving representations from SensaSlim claiming that they had not received an invitation to respond to the allegations.
  • The CRP decides to withdraw the determination and give SensaSlim more time to respond.
  • SensaSlim demands that Dr. Harvey makes no further comment against them and threatens legal action.

April 2011

  • The Supreme Court of New South Wales acknowledges receipt of a Statement of Claim by SensaSlim Australia Pty Ltd against Dr. Harvey.
  • The CRP sets aside making determination on the Dr Ken Harvey complaint against SensaSlim as the CRP is unable to make determinations for products if there is current legal action.
  • A recent newsletter from SensaSlim to its distributors discusses the legal action against Dr Harvey:

Peter O’Brien didn’t accept such a fate but together with his lawyers found a way to defend the company. This defamation action, which could be in the courts for a year or two or even longer, basically gives an iron clad protection that nobody can raise a complaint against SensaSlim to the CRP and hurt us.

The Streisand Effect

The recent scrutiny of the company stems from a Strategic Lawsuits Against Public Participation. SLAPP‘s are intended to censor, intimidate and silence critics by burdening them with the cost and time of a legal defence until they abandon their criticism or opposition.

Because of the SLAPP, SensaSlim has invoked “The Streisand Effect“, so named after American entertainer Barbra Streisand, whose attempt in 2003 to suppress photographs of her residence (amongst 12,000 other residences) and sue the aerial photographer inadvertently generated further publicity – and as a result 420,000 more people visited the website.

A notable occurrence of libel abuse was in 2008 by the British Chiropractic Association against Simon Singh who criticising their activities in a column in The Guardian. The result was a filing of formal complaints of false advertising against more than 500 individual chiropractors within one 24 hour period, with one national chiropractic organisation ordering its members to take down their websites; and in April 2010, Simon Singh won his court appeal for the right to rely on the defence of fair comment. Two weeks later the BCA officially withdrew its lawsuit, ending the case.

While initially, SensaSlim had sanctions imposed against them after an anonymous report about their product,  recent legal representations by SensaSlim and against Dr. Ken Harvey to gain their product more shelf time have led to further investigations – and a lot of negative publicity.

Instead of accepting their demise for their fraud, SensaSlims’ insistence has now led to further scrutiny, their assets frozen, and legal action against them. It is likely they will lose more than they have made.

Australian Skeptics are taking pledges of financial support for Dr. Harvey, should that need arise. The latest information is made available at Australian Skeptics.

I highly recommend reading.

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