How a gang of American spruikers is fleecing Aussies.
Here’s how an American seminar gang is pulling off a multi-million dollar spruiking heist in Australia.
They began with an advertisement in The Sydney Morning Herald in May. Come and see “Australia’s Number One Conference on Millionaire Secrets”. Learn how to buy real estate at 55% below value, earn 18.5% return; retire in two years. It was all offered for “FREE!”.
The two smiling speakers in the advertisement were Sydney agent, John McGrath and American author William Danko. By the time the seminar was presented, neither McGrath nor Danko would be speaking.
But next came a national letterbox campaign where free “VIP tickets” (allegedly valued at $149) were offered to tens of thousands of householders. This time there were four smiling speakers – William Danko, James Smith, Phil Town and Wayne Gray – all supposedly “Australia’s Greatest Financial Super Stars”. It was a lie – none were Australian.
Then, last week, the ACCC came to the rescue of consumers. Well, sort of.
Action was taken in the Federal Court compelling the American company, National Training Conference, to correct a multitude of misrepresentations made in its advertisements. But, as the former Chairman of the ACCC, Allan Fels, explained on Channel Nine’sBusiness Sunday yesterday, we have the absurd situation in Australia where the ACCC can only take action on the advertising and promotion of the seminars, not on their content.
The ACCC is responsible for claims made before the seminar doors open and then, once consumers walk through those doors, the responsibility passes to another government department, ASIC. Well, sort of. You see, it all depends who’s interpreting our spruiking laws. While spruikers fleece millions of bucks from consumers, governments pass the bucks on who’s responsible for protecting consumers.
Over three days (in Brisbane on Thursday, Melbourne on Friday and then Sydney on Saturday), around 3,000 people showed up to this “free” seminar. Large posters displayed details of the corrections required over the misleading advertising. But most of the advertised speakers did not appear.
The main speaker, Phil Towns, was urging people to attend a one-day “comprehensive workshop” about stock trading, at a cost of $5,000. Towns used a closing technique that went something like this – “We’ll give you a black briefcase filled with great material, you give us your credit card details to show us you are interested.”
Hundreds of people handed over their credit cards. In around three hours, over three days, in three states, this gang of spruikers probably raked in at least $3 million (after expenses).
Now, for those who are shocked that anyone could give their credit card to an American company they have known for three hours and where there are prominent signs around the room with admissions about false advertising, consider this – the ACCC action, as well-meaning as it may be, becomes part of “the sell” for the spruikers.
The inference is clear – Aw shucks, we made a mistake but, hey, we have corrected it and all is fine now. So, give us your money and we’ll show you how to get rich. And, of course, it’s all “guaranteed”.
Now, consider something else – if a company tells lies in public via its advertising, what do you think it will do in private? Suddenly become truthful? Of course not.
Public liars become worse in private. And, because of the ACCC action, naïve consumers – many of whom are eager to secure their retirement – come to believe that the seminar company has been given the “all-clear”.
This is the same pitch that was used by the disgraced spruiker Henry Kaye. After Kaye gave undertakings to the Federal Court last year concerning his misrepresentations, he created the impression that he was suddenly totally legit. Before he eventually folded, Kaye used this ‘all-clear-pitch’ to fleece millions of dollars more from consumers.
From the stage, the American spruikers were ultra-careful at their three seminars. Back-stage they were telling another story.
Said William Danko, “I don’t write the advertisements. I have been with this company for five years.” The inference was clear – everything is above-board.
Another staff member said, “The ACCC are reviewing the information.”
As for ASIC, the back-stage comments could have come straight out of Henry Kaye’s mouth, “They have approved it and said it’s okay for us to have the seminar.” This is a lie because neither ASIC nor any federal government department gives its approval to seminars. But most consumers would never know such a fact. They just believe what they are told, especially if it sounds good.
And what about the real estate agent, John McGrath, why did he appear in the May newspaper advertisement for this seminar? According to a staff member of the seminar company, they “heard bad press and so they cancelled him.” This is another lie.
According to his lawyers, John McGrath is “in the process of taking legal action to ensure that public apologies and retractions are made by the promoters of the conference regarding their false representations that John McGrath will be a speaker at their conferences.”
But how did John McGrath come to be involved with this American seminar company in the first place? Was he conned? Or did the seminar company just grab a photograph of him and use it in their advertising? McGrath is not saying, so the full extent of the lies of these Americans is not clear.
What is clear, however, is that they now have the credit card details of hundreds of Australians. They are holding three more seminars – at around $5,000 a head – in Melbourne on July 16, Sydney on July 17 and in Brisbane on July 18.
These American spruikers are such fly-by-nighters that they are even holding their Melbourne seminar at an airport hotel – ready for a quick getaway.
Action should be taken immediately to stop this gang from coming back to Australia. If not, at least $3 million is going to go missing.
And that’s just the seminar fees, next will come the trading losses when consumers act on the financial advice handed out by these spruikers.