A Failure to Regulate

A Failure to Regulate

New Zealand has several layers of regulation to protect us against misleading health claims. Sometimes they all fail. My struggle against quackery over the last few years has given me some familiarity with the ways we’re protected against it, and with their shortcomings.

Misleading people about their healthcare options is something that is clearly unethical. To quote the alt text of Randall Munroe’s xkcd comic strip Alternative Literature:

Telling someone who trusts you that you’re giving them medicine, when you know you’re not, because you want their money, isn’t just lying–it’s like an example you’d make up if you had to illustrate for a child why lying is wrong.

Alternative Literature | xkcd

Whether or not someone making misleading health claims knows they’re not true, this is something that can pretty clearly cause harm. At the lower end, a useless health product promoted for something that will get better on its own will cause financial harm. At the higher end, misleading people about their healthcare options could lead them to delay or avoid life-saving medical treatment. In all cases, it involves a violation of the person’s right to make an informed decision about their healthcare.

Our protection


The first line of defence we have against misleading healthcare claims is the conscience of the person making the claims. If no one ever made claims that are misleading in the first place, we wouldn’t need any regulation to deal with it.

In some cases, the advertiser themselves may have been misled, such as a store having been misled by a supplier. Sometimes, as I have written here before, once they are aware they have been misled their conscience may lead them to fix the problem.

Industry bodies

The second line of defence is industry self-regulation. This can take a few forms, such as the codes of conduct of professional societies. Perhaps the most prominent piece of general industry self-regulation in New Zealand is the Advertising Standards Authority (ASA).

The ASA has codes for various types of advertising, including a Therapeutic and Health Advertising Code which requires that therapeutic claims can’t be made in advertising unless you have good evidence to back them up.

The ASA won’t go out looking for non-compliant ads; instead they rely on people submitting complaints to them. The ASA considers each and every complaint lodged with them, and will always act if they agree it’s justified under their codes. If they find that an ad which has been complained about does not comply with their codes, and the advertiser refuses to fix it, the ASA will uphold the complaint.

When the ASA upholds a complaint, they ask the advertiser to remove their ad. However, they don’t have any legal power to enforce this, and there aren’t any penalties for violating the ASA’s codes.

Some industry groups have made a commitment to comply with the ASA’s rulings. For example, the Newspaper Publishers’ Association of New Zealand (Inc) is a member of the ASA. If an advertiser refuses to comply with an ASA ruling, any organisation that is member of the ASA should refuse to publish the ad.

However, many misleading claims are published directly by the advertiser, for example when they appear online on the advertiser’s own website. These advertisers have typically made no such committment to abide by the ASA’s rulings, and the ASA relies on their voluntary compliance.

The law

The third line of defence is legislation. We have laws against various ways in which consumers can be misled, and these are enforced by various government agencies.

The Fair Trading Act 1986 is one of these laws. It has a requirement for substantiation similar to the one in the ASA’s codes:

A person must not, in trade, make an unsubstantiated representation.

Fair Trading Act 1986 Section 12A(1)

This law is enforced by the Commerce Commission. There are some important differences that set the Commerce Commission apart from the ASA:

  • The Commerce Commission has power to enforce the law. Whereas the ASA can only ask an advertiser to withdraw an ad, the Commerce Commission can take them to court.
  • The Commerce Commission will not act on every justified complaint it receives. Instead it will assess them and decide whether or not to take action. Sometimes the decision is made to take no action even if there is a breach of the Fair Trading Act.

Also at this level of regulation is the Medicines Act 1981, which is enforced by Medsafe. The Medicines Act restricts certain health claims, only allowing them to be made for products that have been approved by the Minister of Health to be sold as a medicine for that purpose.

New medicines can be approved through a process in which they must provide evidence of their safety and efficacy. There are also some products that were already around in 1981 when the Act came into effect were “grandfathered” into the scheme and granted automatic approval, regardless of the evidence for them.

Like the Commerce Commission, Medsafe will not act on every justified complaint they receive, even if the Medicines Act has been breached. They prioritise complaints, and in my experience will typically not act unless there is a clear safety issue.

This means that some parts of the Medicines Act, such as Section 58(1)(c)(iii) which prohibits the use of any sort of health testimonial in medical advertisements, can go entirely unenforced.

Consumer advocates

With almost every level of regulation, nothing will happen unless someone complains. The system relies heavily on individual consumer advocates and consumer advocacy organisations. Groups like the Society for Science Based Healthcare (which, to be clear, I’m the chair of), Consumer NZ, and the NZ Skeptics can do what the regulators can’t.

Though we don’t have any powers of enforcement, we can bring issues to the attention of regulators, work to educate and inform consumers, and raise awareness of issues that regulators have failed to resolve.

Such as the ongoing case of the Homeopathy Centre’s misleading advertising…

When it all goes wrong

In March 2015, I was sent a message about an advertorial written by a business called the Homeopathy Centre, which was published in the Christchurch Mail newspaper.

This business was making a lot of misleading claims about homeopathy, both in the advertorial and on their website. They were using pseudoscientific language to convince people that homeopathy is effective:

The carefully selected homeopathic medicine is energetic in nature and can stimulate the vital force, which is not material, but a vibrant energetic structure interconnected with the body and mind.

Homeopathy Centre

The ads also claimed homeopathy could help with a large number of health problems such as insomnia, anxiety, and a “Weak immune system”. The most prominent claim for homeopathy was:

No matter what state of health you are in, you can improve it!

Homeopathy Centre

Advertising Standards Authority

Through my volunteer work at the Society for Science Based Healthcare, I make a lot of complaints about misleading health advertisements.

Almost always, I go to the Advertising Standards Authority first. Misleading health claims are often made by people advertising their own products and services, so dealing with them directly is unlikely to be helpful. On the other side, neither the Commerce Commission nor Medsafe are likely to take action on small things such as misleading claims on the website of a small business. The ASA is a good middle ground, as they will take action on these small things and often end up fixing the problem. But sometimes, even when they uphold a complaint, nothing changes.

I lodged a complaint with the ASA regarding these ads soon after being made aware of them in March 2015. In May, the ASA decided my complaint was justified, and it was upheld.

…therefore the advertisements were misleading, had unduly glamorised benefits of homeopathy and had portrayed unrealistic outcomes.

Consequently, the Complaints Board said the advertisement had not been prepared with the requisite standard of social responsibility.

Complaint 15/137 Homeopathy Centre | Advertising Standards Authority

The advertiser’s response to my complaint was to say they did not plan on continuing the newspaper advertorial, and that they were in the process of making changes to their website “over the next few months”.

Normally, that decision to uphold my complaint would have been the end of it. Most advertisers are responsible enough to comply with the ASA’s rulings in this way. As far as I am aware, the Christchurch Mail did, but that wasn’t the case with the Homeopathy Centre’s website.

Whenever I complain about online content, I set up a change monitoring system that sends me an email if a web page changes. As a result, I am able to see in detail every change made to the pages on the Homeopathy Centre website since I complained two years ago. When I complained, I set up change monitoring for 40 pages on their website, including those directly relevant to my complaint.

Since my complaint in March 2015, only five of these pages have had any changes. Most of these changes are irrelevant, such as a change of address and an increase in their prices. Whatever the changes they’d planned on making to their website, they don’t appear to have happened yet – two years down the line.

I’ve been following up with the ASA to try to get the Homeopathy Centre to comply with this decision since June 2015.

Advertising standards authority, again

In March 2016, when it was clear the promised changes were not forthcoming, the ASA suggested I submit another complaint that they could consider anew and, if upheld, seek compliance on. So that’s what I did.

In July 2016, the ASA upheld my second complaint regarding the Homeopathy Centre website. This time, the advertiser’s complete response to the complaint was a simple attempt to opt out of regulation:

No thank you, I don’t wish to respond

Homeopathy Centre Christchurch

It was abundantly clear by this point that the advertiser had no interest in voluntary compliance. When you make a complaint to the ASA, they ask that you sign a waiver saying that, if they accept your complaint, you won’t take the issue to another authority. So I tried to work with the ASA to help them gain compliance.

New Zealand Council of Homeopaths

I pointed out that Elisabeth Fink, the director of the Homeopathy Centre since 2009, is a member of an organisation called the NZ Council of Homeopaths. According to the Homeopathy Centre website, she has been a member of this organisation since 1987.

This is important because the NZ Council of Homeopaths is another part of that second line of defence I mentioned earlier. They have Rules of Practice that requires, among other things:

Any advertising will not contravene the Commerce Act 1986, the Fair Trading Act 1986, section 58 of the Medicines Act 1981, and must be in compliance with current Code for Therapeutic Advertising of the Advertising Standards Authority.

Rules of Practice | NZ Council of Homeopaths

As the ASA had already ruled that the Homeopathy Centre’s advertising is not in compliance with their current code for therapeutic advertising, this seemed remarkably clear cut. Elisabeth Fink was breaking the rules of practice of a professional organisation she’d been a member of for nearly three decades.

The ASA agreed in November 2016 to get in touch with the NZ Council of Homeopaths to gain compliance via this route. Later that month, I was told the executive members of the council would meet within a week to discuss the issue, and that they were planning to address it with the advertiser.

Then, in February 2017, I had an update:

The NZ Council of Homeopaths has been in touch with the advertiser. Unfortunately they have not been able to make any progress. You have the option of referring the advertiser to Medsafe.

Advertising Standards Authority

Commerce Commission

With this email the ASA released me from the waiver I’d agreed to, which said I wouldn’t take my complaint up with another authority. My experience with Medsafe in the past has been that, unless there is a pressing safety issue, they are unlikely to take any action.

For example, I have a complaint regarding misleading health claims made about “Harmonized Water” with Medsafe that has been “active”, but without any meaningful action, since September 2014.

So I decided to try the Commerce Commission first instead. I’ve had some success with them in the past, where they issued a formal warning against an advertiser of “amber teething necklaces” (which, by the way, don’t help teething in any way and can be unsafe) who had refused to comply with upheld complaints from the ASA.

I lodged the complaint with the Commerce Commission in the wake of their action against Reckitt Benckiser for misleading marketing of Nurofen specific pain products. It was encouraging to have seen Dr Mark Berry, the Commerce Commission Chairman, recently say:

The Commission will continue to take cases where traders do not promote their products truthfully. Products need to be as described on the box, and these were not. We take a particularly dim view when goods for human consumption are misdescribed; especially where pharmaceutical or healthcare products are not promoted truthfully. With these types of products consumers have little opportunity to verify the claims being made and tend to rely heavily on what they are told by the trader. To be able to choose the product best suited for them, consumers must have accurate and reliable information

Dr Mark Berry | Commerce Commission Chairman

This morning, two months after lodging my complaint with them, I have heard back from the Commerce Commission. It was not good news:

Dear Mark

Thank you for the information you provided the Commerce Commission regarding Homeopathy Centre.

We have now completed our assessment of the concerns you have raised and are writing to advise you that we will not be taking any action against Homeopathy Centre at this time.

Commerce Commission

Though this is so far a repeat of what happened with Baa Baa Beads – the Commerce Commission initially decided not to act then later changed their mind – a repeat of that behaviour hardly feels like something to rely on.

What’s next?

Medsafe will be receiving a complaint about Homeopathy Centre shortly, but I don’t honestly anticipate that they will do anything about it. In the meantime, this company will continue to mislead the public about their healthcare options, as they have knowingly done for at least two years now.

The lesson I would like everyone to take away from this story is that a rule is only useful if it is enforced. You can have the best rules in the world, but if they’re not enforced they don’t matter at all. If consumer protection rules aren’t enforced, consumers are not protected.

In this particular case, the ASA cannot enforce its rules, the NZ Council for Homeopaths chooses not to enforce its rules, and the Commerce Commission chooses not to take action. More often, no one complains about misleading claims, so nothing happens.

As a result of all this and more, quackery thrives in our country.