Fifty-eight consumer protection and health authorities from all over the world swept the internet last month to improve the marketing practices of websites promoting health products, and to pursue fraudulent health businesses.

The 'International Internet Sweep' was an activity of the International Marketing Supervision Network (IMSN). The IMSN is a network of consumer protection authorities of 30 countries. Its main objective is to take action to prevent and redress deceptive marketing practices with an international component.

Websites were examined for claims that were likely to be false or misleading about the health benefits of products. In New Zealand, if a health product is claimed to have a therapeutic benefit, it must be registered as a medicine under the Medicines Act. If it is not registered, then not only will advertised claims be in breach of the Medicines Act, but also the Fair Trading Act.

Included in this assessment were oral treatments such as pills, skin treatments such as lotions, devices, weight loss products, 'cures' for HIV/AIDS, cancer and arthritis, folk or traditional treatments and sexual performance enhancing products.

Of particular concern were products that claimed to be a cure for serious and life-threatening diseases such as cancer and HIV/AIDS. Also attracting attention from the IMSN were products that advertised a delayed effect, forcing consumers to make an additional purchase before seeing any evidence of the effectiveness of the product.

Over 1,400 suspicious websites were identified all over the world. Fifty-three of these appeared to be operating in New Zealand. Of these New Zealand sites:

  • 60% used testimonials to sell the product or service, and only 19% of these testimonials claimed to be from relevant experts or professionals
  • 58% made reference to clinical studies or scientific experiments
  • 7% claimed approval or authorisation from an official agency (3% of these from an agency outside their own jurisdiction). (see background for International results)

Globally, costs for products of concern ranged from US$0.83 to US$6,930.90 compared to a range in New Zealand of NZ$2.50 to NZ$2,300.

In New Zealand, staff from the Ministry of Consumer Affairs, Commerce Commission and Ministry of Health's Medsafe participated in the Sweep.

All sites targeted were sent an email advising them of the Sweep and of the need to ensure compliance with laws relating to the fair trading and safe sale of health-related items. Warning letters have subsequently been sent to a number of traders. Medsafe and the Commerce Commission are continuing to monitor the websites and where necessary will prosecute.

"While the internet is undoubtedly an invaluable and extremely accessible source of information for consumers, it is also an invaluable and extremely accessible channel for unscrupulous business people wanting to make a quick buck," said Commission Chair John Belgrave.

"Consumers need to be extremely vigilant when it comes to internet transactions, and traders need to realise that the internet is not a 'free for all' where anything goes. The same consumer protection laws apply to transactions that occur in physical locations as to those that occur in cyber space."

The IMSN provides the following tips for consumers of health products:

  • If it sounds too good to be true, it probably is;
  • Beware of products or treatments that are advertised as a quick and effective cure-all for a wide range of ailments or for an undiagnosed pain;
  • Be cautious of testimonials claiming amazing results;
  • Watch out for promoters who use phrases such as 'scientific breakthrough', 'miraculous cure', 'exclusive product', and 'secret ingredient'; and
  • Before you purchase, consult your pharmacist, doctor or other health professional.

Background

What is a Sweep Day?

The Sweep Day is an initiative of the International Marketing Supervision Network (IMSN), an organisation made up of membership from 29 consumer protection agencies worldwide. New Zealand's Ministry of Consumer Affairs is a member of the IMSN.

The Network fosters cooperative efforts by member authorities to tackle consumer problems connected with cross-border transactions in both goods and services. Exchange of information between authorities also plays a key role in effective investigations and court action where necessary.

The Sweep Day is an annual event, coordinated by the Australian Competition and Consumer Commission (ACCC). The 2002 Sweep is the fourth such international sweep coordinated by the ACCC. The rate of participation in this year's Internet Sweep was the highest rate to date, equalled only by the Sweep in February 2001. The 58 agencies were from 19 member countries of the IMSN.

The IMSN has held Sweeps on three previous occasions:

  1. 1997
    2.  Sweep targeted 'get rich quick' schemes, identified over 1100 suspicious sites, 25% of which were modified or removed before the 'follow up Sweep' two weeks later
  2. 1998
    3.  Sweep targeted miracle cures and other misleading health claims, identified over 1400 sites, 25% of which were modified or removed before the 'follow up Sweep'
  3. 2001
    4. Sweep targeted compliance with OECD guidelines. 3,271 sites were assessed worldwide, including 229 Australian sites.

Participants in the health fraud Sweep included Australia, Austria, Belgium, Canada, Denmark, Ireland, Finland, France, Hungary, Japan, Korea, New Zealand, Norway, Poland, Portugal, Switzerland, Sweden, UK and USA.

Measurements

Sites were assessed as to whether certain elements were or were not present:

New Zealand results from questions used to assess sites:

Does the site make unsubstantiated claims of a dubious nature? 67% Yes

Does the site use testimonials to sell the product or service? 60% Yes

Are the testimonials from relevant experts or professionals? 19% Yes

Are the testimonials from other users of the product or service? 49% Yes

Is reference made to clinical studies or scientific experiments? 58% Yes

Are "before and after" shots used to promote purchases? 3% Yes

Does the site claim any approval/authorisation/affiliation with an official agency? 7% Yes

Is approval/authorisation claimed from an official agency outside your country? 3 % Yes

International results:

Of the suspicious websites identified:

  • 48.5% used testimonials to sell the product or service. Of these:
    • 38.6% used testimonials from relevant experts or professionals; and
    • 70.3% used testimonials from other users of the product or service
  • 37.7% made reference to clinical studies or scientific experiments
  • 13.9% of sites used 'before and after shots' to promote purchase
  • 13.2% claimed approval/authorisation/affiliation with an official agency. Of these, more than half (52.6%) were agencies outside the relevant jurisdiction)
  • 'Cures' for HIV/AIDS were few (only 2.1% of the suspicious sites)
  • 'Cures' for cancer were more of a concern (14.3% of the suspicious sites)
  • 'Cures' for arthritis were found on 11.1% of the suspicious sites

Orally ingested products and dietary products formed the majority of suspicious sites. Many products fell into both of these categories. Together, they made up 69.9% of the suspicious sites.

Costs of products varied. They were expressed in many currencies. For the sake of comparison, they were converted into US dollars at the time of writing. They ranged from US$0.83 on a New Zealand website for herbal tonic to US$6,930.90 on an Australian website for a house water filtering system. The average cost worldwide for a 'dodgy' health product was US$123.90. Only Korea, Australia, Belgium and Canada had country average costs over US$100.

Of particular concern are supposed 'cures' for diseases where no known cure exists, especially when consumers abandon traditional treatments in favour of these products. Also of concern are pills and potions that claim to have different time delays until they become effective, often meaning that consumers have to purchase a second bottle before realising that they are ineffective.

To report a suspected scam to the IMSN, go to www.econsumer.gov

For further information about the IMSN, go to www.imsnricc.org

Media contact: Fair Trading Projects Adviser David Snowden

Phone work (04) 471 0180

Communications Manager Jackie Maitland Phone work (04) 498 0920, mobile (025) 249 3407

IMSN President Guido Sutter

Phone work (0041 31) 322 2814, guido.sutter@secco.admin.ch