Conwoman Belle Gibson is facing more than $1 million in fines after she was found to have misled vulnerable cancer patients.
In her judgement in the Federal Court on Wednesday, Justice Debra Mortimer said: “All Ms Gibson’s marketing of herself and her company projected the image of a successful, booming enterprise with a wholesale dedication to charitable giving.
“Any reasonable member of the community reading the statements from The Whole Pantry Facebook or Instagram accounts would be led, erroneously, to believe that this was an enterprise where substantial proportions of what people paid over to purchase the apps or the book would be given to charitable causes, on a regular and ongoing basis.”
In the court proceedings initiated by Consumer Affairs Victoria it was alleged Gibson (Annabelle Natalie Gibson), claimed to have been diagnosed with brain cancer and rejected conventional cancer treatments in favour of embarking on a quest to heal herself naturally and had developed and promoted a smartphone application and a book.
The court heard that Gibson promoted herself both under her own name and under a business name, The Whole Pantry. It heard that while she claimed part of the proceeds from sales of the application and the book would be donated to charities, many or most of these donations were not made. The charities involved were One Girl, the Asylum Seekers Resource Centre, the Birthing Kit Foundation and the Schwarz family, which was raising funds for treatment for their son.
“I am satisfied [Gibson] engaged in conduct that was misleading or deceptive in contravention of s 18 of the Australian Consumer Law (ACL) and the ACL (Vic),” Justice Mortimer said.
The judge reserved her decision on whether any penalties should apply to a date to be fixed.
Reports casting doubt on Gibson’s cancer diagnosis and allegations of missing donations surfaced in March 2015. Gibson did not appear during the Federal Court hearing.
Legal resource not-for-profit organisation Justice Connect said the findings in the Gibson trial demonstrated that the Australian Consumer Law (ACL) was an effective weapon in prosecuting misleading and deceptive conduct by fraudulent charity fundraisers.
“Fittingly, the judgment was handed down by Justice Mortimer of the Federal Court on World Consumer Rights Day,” director not-for-profit law at Justice Connect Sue Woodward said.
“The Federal Court’s finding shows that the nationwide ACL is well up to the task when it comes to prosecuting fundraising misbehaviour in the not-for-profit sector, and that the Victorian Commissioner for Consumer Affairs was right to use it in Belle Gibson’s case rather than the state-based Fundraising Act.
“While the penalty is yet to be determined, the national consumer law arms the regulator and courts with other enforcement tools where fines are impractical. This is important when a fundraiser or fraudulent charity has no money, as is the case with Belle Gibson.”
Woodward, who is part of the NFP sector’s campaign called #fixfundraising, said: “Our campaign argues that with the seven different state and territory laws, any charities that aspire to collect Australia-wide, or even small groups using the internet to raise funds, must abide by a minefield of rules and regulations that add millions of dollars in unnecessary cost to the not-for-profit sector.
“The duplicative and complex nature of Australia’s current regime, with charities having to deal with both the Australian consumer law and the archaic state-based laws, diverts and distracts many wonderful volunteers from compassionate activities to mind-numbing and unnecessary paperwork.”
The Victorian government has also publicly confirmed the need for nationally consistent fundraising regulation.
In her opening address to the National Consumer Congress in Melbourne, Minister for Consumer Affairs Marlene Kariouz said she supported the community sector’s call to “overhaul this aspect of the Australian consumer law”.
She said she hoped that her colleagues in other jurisdictions shared the same view, and most importantly that she would “continue to advocate for national reform while taking appropriate action to remove red tape for charities and not-for-profits operating in Victoria”.
“Legislation currently in the Parliament will enable me to exempt an incorporated association or a class of associations from annual financial reporting requirements where they are also registered with and reporting to another regulator,” Kariouz said.
Woodward said: “Minister Kariouz is the first state government minister to say publicly during the Australian consumer law review process that fundraising laws across Australia need to change, and the Australian consumer law is the way forward. Other consumer affairs ministers should follow her lead.”