Power Balance and misleading and deceptive conduct


It is amazing how far some sellers of ‘beneficial’ products will go to avoid proper testing.

The ACCC recently hooked Power Balance Australia for misleading and deceptive conduct. Power Balance make wristbands and pendants. They were claiming that:

Power Balance  holograms  are designed  to work with your body’s  natural energy  field

In an undertaking to the ACCC, Power Balance Australia admitted that this and some of their other representations were misleading and deceptive, in breach of section 52 of  the Australian Trade Practices Act. The full undertaking is here. The admission is at paragraph 8. Note that at paragraph 5, the reason for the breach is explained:

At  the time of making  the Representations,  and as at the date of this Undertaking, Power Balance Australia  did not and does not have:

(a) any credible  scientific  evidence  that supports  the Representations;  and therefore

(b) any  reasonable  grounds  for making  the Representations.

So Power Balance Australia breached Australian law and misled consumers. At paragraph 11(a) of the undertaking it agreed:

that from  the date of this Undertaking  coming  into effect, it [Power Balance Australia] will not,  in trade or commerce,  in respect  of the Products, make any claims  to the effect  that  the Products:

i.  will improve  the user’s  balance,  strength and flexibility; or

ii.  are  ‘designed  to work with  the body’s natural  energy  field’;

iii.  nor,  in conjunction  with  the Products,  make  claims  that ‘Power Balance  is Performance  Technology’ or use the phrase  “Performance  Technology”.

Well, perhaps someone better tell the president of Power Balance LLC. A recent memo (covered here) starts:

Power Balance products work. The existing reports out there are fundamentally incorrect. Power Balance did not make any claims that our product does not perform.

Hmmm. I will let the lawyers work out if this is a breach of the undertaking. But the bit of the memo that got me is the disdain shown for any ‘double blind’ test as requested by the ACCC.

… they [the ACCC] requested Power Balance remove marketing claims until it could provide them with their narrow criteria of randomized, double-blind scientific studies that supports the use of those marketing phrases.

Sounds like standard scientific methodology to me. It is required for drug companies (to avoid incorrect positive results, for example, due to placebo effects). So why not for others making health claims, like Power Balance?

The really annoying thing here though is the disdain shown for Australian Law, consumers and scientific testing. This is reflected in the first sound byte suggested in the memo:

Power Balance products work.

Well – if that is the case, use a proper double-blind test and prove it.

7 Responses to "Power Balance and misleading and deceptive conduct"
  1. In a bizarre turn of events, a New York woman was charged in December with selling counterfeit Power Balance bands.
    Australian Skeptics has been waging a campaign against this scam and selling counterfeit bands for $2 apiece.
    News of the undertaking to the ACCC has traveled across the Pacific, and a class action lawsuit is being mounted in California against the company for “purposefully misleading the public and falsely advertising and marketing the products as having, when worn close to the body, physiological benefits including, but not limited to, increased strength, balance and flexibility”

  2. Stephen, do you think that the regulations need to be strengthened to include fines etc. that are large enough to discourage this type of behaviour?
    From the undertaking, it seems that the only provision that has any potential to cause significant losses or to erode past profits is the requirement to provide refunds (although I am sure the uptake of this provision will be low).

  3. <i>It is amazing how far some sellers of ‘beneficial’ products will go to avoid proper testing.</i>

    This isn’t amazing at all – relying on anecdotes underpins the whole business model.

  4. Over Christmas, one of my partners uncles ranted and raved about what a great product this was, with all sorts of nonsense stories about its powers and what-not (even after I explained the undertakings they had submitted).

    Still can’t decide whether he was joking or not!

  5. Several of us have been battling the vitamin company, Swisse (which is actually Australian) about its advertising and claims of efficacy.  The ads starring Ricky Ponting have been a particular source of irritation.  The ad talks about Proven results and Clinically tested for the Men’s Ultivite – a multivitamin product. Should we really believe that someone in the prime of life and as fit as Ricky is needs multivitamins?  The metaanalysis – source: Cochrane – suggests NOT.

    I complained to the Complementary Medicine Adversting Council but got nowhere – usual snow job.  My partner did not even get a reply.  A Professor of Paediatrics wrote to the company asking for their publications about the ‘proven results’.  He was told that there were three papers but that they were confidential.

    I’m thinking of dobbing them in to the ACCC.  What do you think, Stephen?

  6. I will start with my usual ‘I am not a lawyer’ caveat, but below is my understanding.
    For the ACCC to take action the company would need to be making claims that are ‘misleading and deceptive’. So it has to be a claim that can be tied down (‘proven results’ and ‘clinically tested’ are both rather vague. Also are these claims about the product or multivitamins in general?). Also the claims have to be more than ‘marketing fluff’ (i.e. a claim like ‘our pizzas are the best you will ever taste’ may be viewed as hyperbole rather than a ‘representation’ by the courts).
    I don’t think the ‘actor’ is relevant – most companies seem to use exactly the sort of people who do not need their product (think weight loss, beauty aids, fitness equipment, etc)!

  7. Lets say power balance removes all words product containing the words performance technology and balance, strength and flexibility.

    So what?

    they are still selling them, small businesses Australia seem to still back the product and stock it? Why? During The toughest times and potentially face public scrutiny and lose customers? I asked retailers and they said this; ‘Its helping the directors/staff and they believe in it. They done the test on me, but the staff member said they don’t do many tests because people just want them, they know what its doing’.

    Then my mother tells me its taken the athritis pain in her leg away when she sleeps at night. $60 my mother is sleeping “in her own head” that she has far far less pain and better sleeps as a result. My dad says its BS but hasn’t tried it.

    Pharmacuetical companies have to go through this process and you don’t get your money back if they don’t work. Because there credible testing says there no longer accountable until masses are affected in a negative way.

    My mate took his back with his credit card statement and got a full refund 9 months after purchasing it. He bought a new one with the money. 

    Its not a vitamin, you don’t swallow it. Its not breaking down in your system and activating chemicals and hormones artificially but as they say naturally.

    With or without the ‘CREDIBLE’ proof, enforced by ‘CREDIBLE’ groups i think this product is having a bigger effect then what we yet know or until we may take action to find out for ourselves.

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