The former director of a now-defunct franchise has been declared bankrupt in court after he failed to pay hundreds of thousands of dollars in penalties issued against him.
Peter Foster was the head of SensaSlim Australia, which has since been put into liquidation.
The company sold an oral spray, known as the SensaSlim Solution, which it claimed would induce weight loss and had been the subject of “a large worldwide clinical trial”. SensaSlim sold around 110 sales areas to franchisees, raising an estimated $6.4 million.
However the company began a downward trajectory from 2011 after the ACCC began legal proceedings, claiming that Mr Foster used SensaSlim to engage in false or misleading conduct towards both consumers and to franchisees.
After a protracted legal battle, Mr Foster was found guilty in April 2014, and in addition to being permanently banned from leading a company, was hit with a massive $660,000 fine as well as ordered to pay the ACCC’s legal costs.
Mr Foster then appealed his conviction but lost, and was ordered to pay the ACCC’s additional costs in defending the verdict.
But he failed to pay any of these, and as such, the ACCC was successful in having the Federal Court declare Mr Foster bankrupt.
“The ACCC took this action because we are committed to enforcing compliance with court orders made against individuals and companies for breaching consumer law,” ACCC Commissioner Sarah Court said.
“The ACCC will continue to take action against those who do not pay penalties and costs orders made against them by the court,” Ms Court said.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.