Friday 21 July 2006 – A company promoting a petrol payment scheme, known as Fuelbanc, has been ordered to suspend its business following action taken by the Australian Securities and Investments Commission (ASIC). The Federal Court of Australia, in Melbourne, made interim orders restraining Fuelbanc Australia Ltd, Paycards Global Pty Ltd, Paycards Investments Pty Ltd, PC Property Group Pty Ltd, Mr Stephen McDougall, Mr Timothy McDougall and Mr Matthew McDougall (the defendants) from:
• 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; and • receiving, transferring or disposing any funds in connection with the Fuelbanc Scheme.
The defendants were ordered to cease: • operating or promoting the Fuelbanc scheme; and • dealing with or disposing of any funds or assets held by the defendants. Messrs Stephen McDougall, Timothy McDougall and Matthew McDougall were restrained from leaving Australia.
Their passports have been surrendered to the Court. Mr Stephen McDougall is the father of Mr Timothy and Mr Matthew McDougall. The Court also appointed Mr George Georges and Mr Adrian Brown, of Ferrier Hodgson, as receivers of the Fuelbanc scheme and provisional liquidators of Fuelbanc Australia, Paycards Global, Paycards Investments and PC Property Group. ASIC will also 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. We are also concerned that members of the Fuelbanc scheme may not have been properly made aware of the workings of the scheme’, ASIC’s Executive Director of Enforcement, Ms Jan Redfern said.
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. 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.
ASIC’s investigation is continuing. Fuelbanc members seeking further information can contact ASIC’s Infoline on 1300 300 630. Those calling from overseas should contact ASIC on + 61 3 5177 3053. For further information contact: Jan Redfern Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769List your legal jobs on the LawFuel Network