Tuesday 8 August 2006 06 – LAWFUEL – Law News Daily – Further action taken against a company promoting a petrol payment scheme, known as Fuelbanc, should act as a warning to consumers faced with offers to save on the cost of petrol, the Australian Securities and Investments Commission (ASIC) said today.
The Federal Court of Australia, in Melbourne, today made further interim orders until 31 August 2006 restraining the directors of Fuelbanc Australia Pty Ltd, Mr Stephen McDougall, Mr Timothy McDougall and Mr Matthew McDougall (the defendants) from:
• leaving Australia; • further operating the Fuelbanc scheme; • advertising, promoting or marketing any business or service that involves the use of stored value or debit cards for the payment of petrol; • receiving, transferring or disposing any funds in connection with the Fuelbanc scheme; • operating or promoting the Fuelbanc scheme; and • dealing with, transferring or disposing of any funds or assets held by the defendants.
The defendants’ passports have been surrendered to the Court. Mr Stephen McDougall is the father of Mr Timothy and Mr Matthew McDougall. Mr George Georges and Mr Adrian Brown, of Ferrier Hodgson, were appointed as receivers of the Fuelbanc scheme and provisional liquidators of Fuelbanc Australia, Paycards Global, Paycards Investments and PC Property Group by the Federal Court on 20 July 2006.
ASIC will seek declarations that the defendants operated a scheme which required registration as a managed investment scheme but was not registered, and that they have carried on a financial services business in Australia without holding an Australian financial services licence. ASIC is also concerned about the misleading nature of statements made on the www.fuelbanc.com website.
ASIC took action because, in our view, the Fuelbanc scheme was not licensed, as a registered managed investment scheme, therefore failing to provide members with certain legal protections. ASIC is also concerned that members of the Fuelbanc scheme may not have been properly made aware of the workings of the scheme. The matter returns to Court on 31 August 2006. ASIC’s investigation is continuing. Fuelbanc members seeking further information can contact ASIC’s Infoline on 1300 736 419. Those calling from overseas should contact ASIC on + 61 3 5177 3053.
Background The Fuelbanc petrol scheme has been in operation since about 18 January 2006. It was advertised on the internet at www.fuelbanc.com and members joined the scheme over the internet. Membership of ‘Ebanc’ is a prerequisite to joining the Fuelbanc scheme. The Ebanc system is based on bartering and facilitates the indirect exchange of goods and services among members. It is through the association with Ebanc that members gained access to the so-called benefits of the Fuelbanc scheme. While cheaper petrol was not offered, the Fuelbanc scheme did offer another way to pay for petrol. The website offered consumers a chance to turn their barter units, known as trade dollars, into petrol. The scheme offered the member, in exchange for cash and trade dollars, a debit card, or ‘fuel card’, on which a weekly deposit was made. The fuel card provided a mechanism by which the member could pay for petrol (at any petrol station outlet) to the weekly debited amount. The member could choose the length of the period for which they chose to invest their cash and trade dollars – either 10, 26 or 52 weeks. However, the full amount for the 10, 26 or 52-week period had to be invested on joining the scheme. In the case of the 26 and 52-week periods, the invested amount comprised of 50 per cent cash and 50 per cent trade dollars. Members paid a $99.00 membership fee which could be made in full as a trade dollar deposit. The scheme made a return on the funds by pooling the cash and trade dollar components and loaning them to another company, Paycards Global Pty Ltd. Paycards Global was responsible for generating returns on investments made to meet the schemes requirements to debit each Sunday evening the members’ chosen weekly balance. ASIC understands there are more than 700 Fuelbanc scheme members who live across Australia. There are also members based in New Zealand, Belgium, Holland and the United Kingdom. ASIC has been advised that these orders will impact on members’ use of their Fuelbanc fuel cards from Monday 24 July 2006. In the interim, ASIC has advised members to ensure they have alternate means of paying for petrol in case any difficulty is experienced with use of the cards. For further information contact: Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769
