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AMI loses appeal over sexual dysfunction treatment

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The Advanced Medical Institute (AMI) has lost a long-running legal battle over its aggressive promotion and supply of unproven medications for men suffering from sexual dysfunction.

The Australian Competition and Consumer Commission (ACCC) first instituted proceedings against AMI and its director, Jacob Vaisman, in December 2010, concerned that the company was taking advantage of vulnerable men.

It argued that AMI, which was later sold to NRM Corporation Pty Ltd and NRM Trading Pty Ltd, trained its staff to use high-pressure techniques to sell the treatment programs.

The ACCC put forward 168 individual patient cases, in which medications with no proven efficacy, and sold only by NRM and AMI, were offered. AMI doctors failed to diagnose any underlying cause for their patients’ sexual dysfunction or refer them on to specialists.

Men were also falsely led to believe they might suffer heart attacks or strokes if they did not buy the treatments.

In April 2015, the Federal Court agreed with the ACCC, finding that AMI and NRM engaged in unconscionable conduct and used unfair contract terms in the way they promoted or supplied male sexual dysfunction products.

NRM and Mr Vaisman appealed. On 22 July 2016, the Full Court of the Federal Court dismissed the appeal and ordered NRM to pay the full court costs.

“It is immoral to seek to harness the fears and anxieties of men suffering from erectile dysfunction or premature ejaculation for the purpose of selling medical treatments,” Justice Anthony 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.

“The salespeople were trained to tell men that if they did not agree to treatment, they would suffer adverse medical consequences, including shrinkage of the penis and psychological impotence. There was no scientific basis established before the court for these claims.”

The Full Court upheld an order permanently restraining NRM from prescribing medications and consulting patients over the telephone, with any statements or representations to be made by a medical practitioner in a face-to-face or video consultation.

NRM had earlier been found guilty of contempt for not complying with the order. A date is yet to be fixed for a hearing on a penalty for the contempt.

Mr Vaisman is also prohibited from having a role in connection with training, supervising, counselling or terminating staff for seven years.

“The ACCC brought these proceedings because NRM sought to exploit consumers’ vulnerability for its own commercial gain, by targeting vulnerable consumers with unconscionable advertising and sales techniques,” ACCC Chairman Rod 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.”

Maria Hawthorne