The company behind the billboards flogging nasal sprays to treat erectile dysfunction has again been found to have exploited its customers through its dubious medicines.
A full court of the Federal Court tossed aside an appeal from NRM Corporation, the operator of Advanced Medical Institute, against a 2015 ruling that it had targeted vulnerable men by its advertising and sales techniques.
Following its failed appeal, NRM is restrained from making claims as to the efficacy of its products unless those claims are made by a doctor in a face-to-face or video consultation.
NRM director Jacov Vaisman has also been restrained from having a role in connection with training, supervising or counselling or terminating employees, agents or contractors of NRM for seven years.
According to the judgment handed down by the court late on Thursday: “There remains a continuing need, and there remains a factual foundation, for an order restraining the appellants (NRM and Mr Vaisman) from advertising in a manner which has the potential to exploit the vulnerable.”
The original Federal Court judgment was scathing of the company that became a household name in the 1990s, finding there was no proper scientific basis to the treatments it sold through high-pressure tactics.
The action was brought by the Australian Competition and Consumer Commission.
The Federal Court found last year both NRM and Mr Vaisman had engaged in unconscionable conduct in dealings with patients.
“It is immoral to seek to harness the fears and anxieties of men suffering from ED [erectile dysfunction] or PE [premature ejaculation] for the purpose of selling medical treatments. To target the patient’s vulnerability in this way is to use an unfair tactic and that is a possible marker of unconscionable conduct,” Justice Tony North said.
“The technique of frightening men by telling them of the dire adverse consequences of not agreeing to treatment and assuring them that the treatment was effective was part of the business system of AMI and NRM. It was formulated by management and imparted in an organised fashion through scripts and training sessions,” Justice North said.
ACCC chairman Rod Sims said the action against NRM and Mr Vaisman provided 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.