'Immoral' adverts for erectile dysfunction treatments banned

The case ends a five-and-a-half year legal battle between the companies and the consumer watchdog. Photo / Getty Images

Three million tapped phone calls, two shell companies and a Federal Court appeal: those dodgy erectile dysfunction ads just wouldn't go away.

But NRM Corporation and NRM Trading Pty, which sell nasal sprays that promise to boost sexual performance, have again been banned from advertising the products "in a manner which has the potential to exploit the vulnerable".

In dismissing their appeal against a Federal Court finding of unconscionable conduct by NRM, the Full Court upheld an order banning the company from making representations to any patient as to the efficacy of its treatments, unless made by a medical practitioner in a face-to-face or video consultation. That means no more annoying billboard, radio or online ads.

NRM, previously known as Advanced Medical Institute Pty and AMI Australia Holding, has already been found guilty of contempt for flouting the court orders, with a penalty hearing to be heard at a later date.

Unfair tactics

Federal Court Justice Anthony North slammed the business and its operators in his judgment last year.

"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," Justice North said.

"To target the patient's vulnerability in this way is to use an unfair tactic and that is a possible marker of unconscionable conduct".

He took aim at sales tactics used to convince men to sign up for treatment, which the court learned of thanks to millions of recorded telephone calls.

"Sales people used high-pressure selling techniques by telling men that their penis would shrink and they would suffer psychological impotence if they did not agree to the treatment," Justice North said.

The men were told they would get a refund if the treatment failed, but were not told that they must try all treatment options - including injecting the drug into their penises.

Poor advice

Justice North said doctors working for the company had failed to provide patients with proper care and act in their best interests, such as educating them on common causes of erectile dysfunction, such as cardiovascular disease and diabetes.

"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," Justice North said.

"It was formulated by management and imparted in an organised fashion through scripts and training sessions."

The Full Court also dismissed NRM director Jacov Vaisman's appeal against orders restraining him from training, supervising or counselling or terminating employees, agents or contractors of NRM for seven years.

It ends a five-and-a-half year legal battle between the companies and the consumer watchdog.

ACCC Chairman Rod Sims said the commission took on the case because of concerns that the business was "exploiting consumers' vulnerability for its own commercial gain" using "unconscionable advertising and sales techniques".

"This case provides a clear message that businesses must not take advantage of consumers who are vulnerable or disadvantaged," Mr Sims said.

"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."