A judgment ordering the suppliers of failed fat-loss pill Celluslim to pay more than $250,000 has been interpreted as a ground-breaking control on "snake-oil" sellers.
Consumers' Institute chief executive David Russell said he was unaware of such tough penalties being imposed before.
"It sends a clear signal to the peddlers
of hope with no substance that if they get caught the penalties are going to be very severe."
It showed the Commerce Commission was prepared to act and that the courts would use the high and "inventive" refund penalties available under the Fair Trading Act, Mr Russell said.
The Auckland District Court's orders follow its separate conviction of Zenith Corporation in June for making bogus claims about a weight-loss product called Body Enhancer between 2000 and 2002. Zenith has not yet been sentenced. The commission has asked for a fine close to the maximum penalty of $2.6 million.
In the Celluslim case, the court fined Auckland company Martini and one of its directors, Dennis Johnson O'Neill, a combined $59,000 for making false and misleading representations about the capsules, marketed as able to get rid of fat and cellulite in three weeks without dieting or exercise.
An eight-week supply of the capsules cost $168.80.
Judge David Wilson, QC, also ordered them to refund customers $175,000 and pay $20,000 to distribute the refunds.
Celluslim did not work and made some who took it feel unwell, the judge said.
O'Neill and Martini have indicated they will appeal against the penalties.
Two separate distributors have promoted Celluslim in New Zealand, one of them based in Singapore.
British internet websites are advertising online sales of Celluslim. It is unclear if it is the same kind of product as Martini's, but the claims are similar.
One of the websites said the capsules and an associated cream could "get rid of cellulite and fat".
Mr Russell said "more fool them" of anyone who chose to buy the products online. He thought the capsules were no longer available within New Zealand.
He said the planned transtasman drug regulation agency would tighten control of alternative medicines, but despite that and the courts' tougher stand, some consumers would remain gullible and unscrupulous suppliers would continue to take their money.
What is cellulite?
Dimpled skin and fat on the thighs and buttocks.
Develops as a person ages.
More commonly affects women than men.
Cannot be removed by taking pills.
Can be removed by plastic surgery.
A judgment ordering the suppliers of failed fat-loss pill Celluslim to pay more than $250,000 has been interpreted as a ground-breaking control on "snake-oil" sellers.
Consumers' Institute chief executive David Russell said he was unaware of such tough penalties being imposed before.
"It sends a clear signal to the peddlers
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