Historical reports of the ACN Australian Communications Network legal proceeding against Peter Bowditch in 2005
Below you will find a fair use condensation of material from a variety of archival sources. The views expressed are those of the original posters and not the editors or publishers of this site unless so indicated. I have not been able to locate a copy of the original complaint but it must have been based on the comments made by Peter Bowditch about ACN Australia.
Mr. Bowditch appears to remain convinced that ACN operates in a pyramid-like fashion despite the ruling of the Australian Federal court which ultimately came to a different conclusion.
More detailed info can be found at ACN MLM networking business.
Historical forum postings from 2005 Scam.com covering ACN.
ACN (Australian Communications Network)
The Millenium Project was unavailable for just under three hours on Friday, April 8. This was because the organisation hosting the site had been presented with a demand by Australian Communications Network Pty Ltd, a company recently convicted in the Federal Court of Australia of conducting an illegal pyramid scheme.
ACN did not contact me first, but there is no reason for me to expect courtesy from them anyway. ACN's claim was that certain material on this site violated their copyright and should be removed immediately. The hosting organisation acted properly in this case, and spent a week in negotiation with ACN before notifying me of their intention to take down the site.
They had no real choice in this matter as they did not want to leave themselves open to possible criminal charges. The take-down process has several stages, but unfortunately someone was a bit hasty and did everything at once and this meant that the site became inaccessible only 21 minutes after the notification to comply was emailed to me.
I have since received an apology for the disruption and the site was back up literally within minutes of my informing them that I had made the necessary changes. At no time was any other part of the RatbagsDotCom site affected and nobody at OzHosting was anything other than helpful and sympathetic, including their legal representative.
I know of other hosting organisations which would have had no hesitation in simply cancelling my account and shutting down the complete domain, and I would like to publicly thank everyone at OzHosting for the way they conducted themselves and their demonstrated commitment to customer service (and free speech).
ACN can't stand the heat, wants kitchen shut down. (9/4/2005)
The method chosen by ACN to attack my freedom of speech was to claim that I had breached their copyright by publishing materials which belonged to them. It is always encouraging when people react to criticism not by responding to the criticism but by trying to suppress the evidence which supports the criticism.
It is doubly encouraging when they admit by their actions that the suppressed material is factual. If they own it and it is protected by copyright then they cannot deny its existence or legitimacy.
This lesson was learnt by the criminal cult of Scientology when they simultaneously tried to argue that material published on the Internet was both a fabrication and a disclosure of trade secrets. It can't be both. When they finally decided on the trade secrets argument they were admitting to the validity of the documents.
Most of ACN's alleged copyrighted material could be removed from this site without doing any damage to my criticism, but there were two issues which I would like to comment on further.
The first of these was a photograph of a building known as One Pacific Highway, located in North Sydney. The photograph in ACN's advertising material shows this building without any signs on its roof, although in reality there are two large neon signs advertising the insurance company ING.
I am very pleased that ACN have formally admitted, by their claim of copyright, that the photographs in their brochures do not show the building as it really is but have been modified to disguise the facts.
Put simply - ACN have stated that images which have been modified to hide the truth are their property and they use them to influence people who may potentially do business with them. I thank them for this, and for confirming my original claim that the advertising brochures were misleading.
By the way, in a discussion I had with a lawyer about this the argument was raised that ACN probably do not own the copyright for the image in question as it could be considered an original artistic work of whoever it was who digitally modified the photograph to remove the ING signs.
In any case, all instances of the allegedly copyrighted image on this site have been replaced by my original work of art which can be seen at the right of the screen.
The second matter was a list of the first nine things that a new ACN representative should do in order to firmly establish his or her "ACN Global Enterprise". ACN claimed that the material I had here had been taken from an ACN web site, but it had, in fact, been downloaded from the now-defunct web site of Mr Keith Janke.
It is quite normal for multi-level marketing organisations to pretend that web sites run by representatives are autonomous, thus giving them a form of plausible deniability for statements and claims made on those sites.
It is good to see that ACN are not trying to distance themselves from Mr Janke's site and are claiming it as their own. Although Mr Janke has closed his site, it is still available in the archive of the Internet Wayback Machine.
I can understand why ACN would not want this information to be freely available, as representatives are expected to pay $500 before seeing it.
I have paraphrased the nine steps below. (The paraphrase is an original artistic work by Peter Bowditch and he claims copyright in all countries which honour the Berne Convention. Anyone can freely reproduce the paraphrase provided that the original source is acknowledged.)
A Spoof on ACN opportunity called "The nine steps to financial freedom":
1. Register yourself with ACN and give them your credit card number so that they can directly bill you for whatever they need to for the business. Connect your own telephones to ACN so that your upline can get his commission on your phone bills.
2. Go to a web site called "Winners World" which does not look like it has anything official to do with ACN but where you can find out about what opportunities will be coming up in the near future for you to spend money on things like meetings and seminars. (The Winners World web site was owned by a Keith Janke but now exists only on the Internet Wayback Machine.)
3. Make a list of everyone you know who might be a possible prospect for adding to your downline. This list is dynamic and will change over time as you meet new people and cross others off because they have either joined up or exhibited chronic loserness. You should aim to have 100 people on the list.
Sign up at least six telephone customers within the first 72 hours. If you don't do this you will not receive any of the bonuses.
4. Arrange for your first meeting in your home where you show the plan to potential suckers. You should hold this meeting within a few days and invite 10 to 20 people.
Someone higher in the pyramid than you will do the actual presentation, as you may not have the experience yet to be convincing when you tell them how rich they are going to become.
As your upline is a very busy person and has many other potential suckers to talk to, you should not waste his time by not having enough prospects there or by cancelling if, for example, your mother dies.
5. Have a conference telephone conversation with your upline and other pyramidees. This will only cost you $1.99, which is less than the commission you will receive for $200 worth of telephone calls made by your "customers" and is therefore a real bargain. This is training for you to "build your ACN Global Enterprise!".
6. Read the "self help" book which you got in exchange for $500 (now $200). Pay particular attention to the part which tells you how little commission you are going to really get from your telephone "customers".
7. Within the first 21 days sign up 20 fixed-line telephone customers and also sign up three ACN distributors who have each paid their $500 and themselves signed up at least six telephone customers. This will allow you to get an even bigger share of the bonuses which had (initially) been ruled illegal by the Australian Federal Court.
8. Put your name down for the next international ACN conference, which will be organised by and profited from by someone higher in the pyramid than you (but they will not mention the profit, even if you ask them).
9. Just as they tell you in every other pyramid scheme - duplicate this system exactly with everyone you recruit. If you do not do it exactly, ACN will see that you are a failure and a loser and may declare you to be unsuccessful.
Editor's note: Peter Bowditch replies below to queries and snide remarks regarding the ACN legal proceeding which he settled out of court by consent. Having gone through such things myself, it appears that it was simply not worth the hassle and expense of maintaining whatever comments he had posted.
No trial was held and there is no access to the claims themselves. No facts were proven on either side and no costs were assessed.
ACN got their way, but only in the form of a retraction. From experience I know that scammers routinely hire expensive lawyers to suppress negative free speech, however truthful. Few of us can afford to repel the intimidation that a bogus legal proceeding brings. Not that that was the case here.
Removal of ACN material & Apology by Peter Bowditch of Ratbags.com
Under the terms of settlement of a legal dispute the owner and author of this site has agreed not to make any representations or comment regarding ACN or its related companies and has otherwise agreed to keep the terms of that settlement confidential.
The website owner and author wish to apologise for any hurt or damage caused to ACN, its employees or Independent Representatives by the former contents of the website.
April 2006 - "Of course (the apology) is still on my site. It will be on my site at the URL
mentioned until the period specified in the confidential Deed of Settlement has expired, after which I am REQUIRED to remove it. Apart from that, I can say no more about this page.
A notice that action was commenced against me on 13 September, 2005. The Applicant didn't bother to notify me of this (it's called commencing an action ex parte) and when they appeared in court on 14 September without me the judge told them to go away and serve some papers on me. The first day I appeared in court was 21 September. Now read on.
Yep! My counsel was on holidays, and as I was only given 6 days' notice of the court appearance the judge refused to hear the applicant's case while I was not represented. He did, however, issue an interim order (with my consent and, in fact, at my suggestion - I wasn't forced to do anything that I objected to) that I had to announce that action had commenced and I was not going to keep doing what was being objected to until a final hearing had been completed. He was four days late in making it formal, because I had already announced it on my site the previous weekend.
You can also see links to several other places on my site where I have displayed information about the progress of the case, some of which I am no longer required
to display because the court orders have been superseded. As I mentioned above, I will be under no obligation to display the latest statement shortly, but I will continue to do so.
(If anyone wants to see the complete history of court proceedings, go to http://www.fedcourt.gov.au/ecourt/ecourt_esearch_slide2.html
, click on "Accept" to continue, choose "Search by File Number, Name or
Application Type" and search for Prefix NSD Sequence Number 1689 Year
2005. The file number is NSD1689/2005.)
That order is the only one which matters, because it supersedes all previous orders."
The final consent order.
AUSTRALIAN COMMUNICATIONS NETWORK PTY LTDABN 85 108 535 708
GEBESSE HOLDINGS PTY LTD
ABN 25 003 383 604
JUDGE: Justice Madgwick
DATE OF ORDER: 15 February 2006
WHERE MADE: Sydney
THE COURT ORDERS, BY CONSENT, THAT:
1. The First Respondent and the Second Respondent, by itself, its directors, its employees or agents be restrained from making, whether expressly or impliedly, by electronic or print media (including the world wide wed), in letters, facsimiles, electronic mail, posters, pamphlets, brochures, materials or any other means of communication:
(a) the representations struck out or amended by the Court on 28 October 2005 in Exhibits AH-1 and AH-6 to AH-19 to the Affidavit of Andrew Hamilton dated 14 September; or
(b) other representations to like or similar effect.
2. The application otherwise be dismissed.
3. No order as to costs.
Date that entry is stamped:
A person boasting online about the earlier interim order stated that it reflected the apparent press release type text below but Bowditch made these preceding comments afterwards in April 2009.
"That would be the case where the late Justice Selway found the company to be operating an illegal pyramid scheme in breach of the Trade Practices Act. The company's spin as quoted in my case was not his ruling."
"Justice Selway found them to be operating an illegal pyramid scheme. Some rebuttal. By the way, an illegal pyramid scheme can be "viable and competitive" and its offerings attractive to customers. Heroin sales are profitable and attractive to customers but like pyramid schemes they are illegal."
"I did not have to place any disclaimer on my site following the DISMISSAL of the action. The words "by consent" mean that I agreed to what I was doing without coercion."
"Which means that I had to stop saying nasty things about a company which had been found by a court to have been operating illegally. Upon voluntarily agreeing to this, the action was dismissed and I didn't have to pay their court costs."
On 22 September 2005, as an interim measure pending a full hearing on ACN’s application for interlocutory injunctions against Ratbags, the Federal Court of Australia (with the consent of Mr Bowditch and Gebesse) ordered Ratbags to publish this statement by ACN on the ratbags.com website. The Federal Court of Australia does not necessarily endorse any of the contents of this statement.
General statement re ACN:
· ACN is the Australian subsidiary of the global telecommunications company American Communications Network Inc which commenced in 1993 and operates:
- in 18 countries worldwide (North America, Western Europe and Australia);
- has 1.5 million phone customers worldwide (approx);
- had 2004 revenues of US$600 million (approx).
· Federal Court Justice Selway found that:
- ACN's business was "viable and competitive"
- "There is no suggestion that its marketing strategies are a sham or that its financial projections cannot be realised"
- "ACN's offering to customers is competitive and may even be attractive."
· The direct selling/multi-level marketing (MLM) industry of which ACN is a part, along with companies such as Tupperware, Nutrimetics & Avon, has around 500,000 Australians working in it and has revenues of around A$1.2 billion annually.
· ACN employs over 100 people in its North Sydney Offices and has acquired over 30,000 local and/or long distance customers in less than 12 months and almost 4000 mobile customers in less than 2 months.
Response to false and misleading statements by Ratbags
Allegation of being a pyramid scheme
There is no basis to suggest that the current MLM model ($200 + GST entry fee) used by ACN is a pyramid scheme:
· Justice Selway expressly failed to find that ACN’s MLM model would be a pyramid at a $200 entry fee;
· Justice Mansfield expressly limited his declarations against ACN to the period ending on 11 April 2005, when ACN changed its entry fee to $200;
· Justice Mansfield expressly stated: “The decision and orders of the Court do not relate to a scheme in which the participation payment is $200 plus GST.”
· Justice Selway’s finding against the original $500 MLM model is subject to appeal.
Allegations regarding legitimacy and sustainability of ACN’s business
There is no basis to suggest that ACN is not a legitimate, sustainable business.
The Federal Court of Australia has made the following factual findings in respect to ACN's business:
· ACN's offering to customers is competitive and may even be attractive.
· ACN’s commitment to offer quality products and services to customers at competitive prices is a real commitment.
· ACN’s commitment to provide prompt, courteous service from a dynamic support scheme is a real commitment.
· ACN's commitment to process all orders in a prompt and efficient manner is a real commitment.
· There is a real market in which ACN provides real services to real customers.
· There is no suggestion that ACN's marketing strategies are a sham of that its financial projections cannot be realised.
· There is no evidence that ACN cannot operate viably in the telecommunications market and the ACCC did not dispute that ACN's business was viable and competitive.
· There is no evidence that the scheme operated by ACN is not sustainable. ACN has operated successfully in the United States, Canada and Europe and based on the scheme operated by ACN elsewhere in the world and the fact that returns to participants are ultimately based on actual business in real products and services provided to actual customers, ACN’s business may sustainable long term.
Allegations regarding ability to succeed financially as an ACN Independent Representative
There is no basis to suggest that it is not possible to succeed financially or make money as an ACN Independent Representative.
ACN pays substantial amounts of money to those Independent Representatives who succeed in acquiring telecommunications customers and building effective sales organisations. For example:
· In the last weeks alone well over 100 Independent Representatives have shared in over $35,000 of bonuses for acquiring customers;
· In addition, ACN will be paying almost $90,000 in monthly commissions to Independent Representatives in September 05.
ACN’s compensation plan provides opportunity to make money, at a range of commitment levels from a few hours a week to full time. Independent Representatives can double their $200 entry fee by acquiring just 10 fixed line and 10 mobile customers in their first 30 days.
For further information on the proceedings concerning ACN's business you should refer to the following judgments that can be found at http://www.austlii.edu.au:
Australian Competition & Consumer Commission v Australian Communications Network Pty Ltd  FCA 988
Australian Competition and Consumer Commission v Australian Communications Network Pty Ltd  FCA 276