An Auckland man and his company have been ordered to refund $175,000 after falsely claiming a tablet could "melt away" fat and cellulite.
However, the refunds, which could benefit thousands of customers who bought Celluslim tablets, are on hold pending an appeal.
From 2002, Dennis Johnson O'Neill marketed Celluslim tablets
through Martini Ltd, as a product that would get rid of fat and cellulite in just three weeks without dieting or exercise.
Customers paid $168.80 for an eight-week supply of the tablets, but an Auckland District Court judge said anyone who bought them was wasting money.
In his sentencing, Judge David Wilson, QC, said: "The only evidence is that Celluslim could not reduce cellulite fat and weight and moreover made some customers feel unwell."
An advertising brochure said Celluslim was scientifically developed and tested by Doctor Malissi at Switzerland's Saint Alto Research Centre, but neither existed.
At one stage, O'Neill and his company ran out of the tablets and relabelled a honey, garlic and apple cider vinegar tablet as Celluslim so they could continue to fill orders, the Commerce Commission said.
O'Neill and Martini Ltd, of which he is listed as a director with Tania Anne Couper, were prosecuted after being warned by government agency Medsafe that he was breaking the law and should stop marketing and distributing the product.
O'Neill was fined $25,000 and Martini $34,000 for breaching the Fair Trading Act.
They were ordered to refund $175,000 and pay another $20,000 for the refunds to be distributed.
Martini Ltd and O'Neill first became aware of Celluslim in April 2002 after receiving a brochure from Singapore on the product.
O'Neill employed a New Zealand company to manufacture the tablets based on the list of ingredients found on the Singaporean brochure.
The Commerce Commission said Martini Ltd and O'Neill had indicated they would appeal against the penalties and refund order, and the commission planned to oppose any appeal.
If the appeal upholds the refunds, newspaper advertising will inform consumers how to get their money back.
