Successful Prosecution Over "Cellulite Pills"

Consumers who bought Celluslim, a product that claimed to "melt away fat and cellulite", are finally able to receive refunds.

The Commerce Commission successfully prosecuted Dennis O'Neil and Martini Limited (formerly trading as Marketing Direct Ltd) over the pills which were marketed and distributed in 2002 and 2003. The Judge in the initial case said "anyone who purchased Celluslim wasted their money."

Mr O'Neil and his company were ordered by the court to pay 1,750 people refunds totalling $175,972. Following appeals to the High Court and Court of Appeal, the original District Court orders in respect to refunds to consumers who purchased this bogus product have been restored.

A system for refunding consumers has now been put in place with an independent company being appointed by the Court to manage this process, at the cost of Mr O'Neil and his company. This will include advertising in the major daily newspapers seeking consumers who purchased the product. Consumers claiming a refund will have to provide proof of purchase.

Commission Chair Paula Rebstock said, "This is a major victory for consumers, who were taken in by blatantly misleading advertising, and deserved a refund. It is also significant that the wrongdoer is being required to bear the cost of distributing the refunds, rather than the taxpayer."

"Misleading claims about health and nutrition products remain a target area for the Commission because of the vulnerability of consumers in this area. Consumers simply have no way of knowing what is in a pill they buy, other than by relying on the claims made for it in advertising and on the packet," says Ms Rebstock.

An advertising campaign to try to contact all consumers entitled to a refund begins on 31 May 2008. The refund process is being managed independently by KordaMentha.

Any consumers who believe they may be entitled to a refund should write to:
Michele Raymond
KordaMentha
PO Box 982
Auckland
Background
The product
Apart from the fat melting claim made for Celluslim, it was also claimed the product had been scientifically developed and tested by a fictitious Doctor at the fictitious Saint Alto Research Centre in Switzerland.

At one stage, when the distributors ran out of the original manufactured Celluslim pills, they relabelled honey, garlic and apple cider vinegar pills as Celluslim.

The Court process
The Auckland District Court found Dennis O'Neil and Martini Limited (formerly trading as Marketing Direct Ltd) guilty of breaches of the Fair Trading Act in 2005. It imposed fines totalling $59,000 and ordered refunds to customers of $175,000, plus the costs of paying an independent company to administer the refunds.

In 2006 the fines were reduced on appeal by Mr O'Neil and Martini Limited to a total of $22,500. They had also successfully appealed the order to pay an independent company to administer the refunds.

The Commission had this order overturned in the Court of Appeal in October 2007. Last month the refund money was handed over to KordaMentha by Mr O'Neil and Martini Limited.

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