A company that offered wealth seminars, courses and mentoring programs has been hit with a federal court case for promoting misleading information.
A court on Monday ordered Master Wealth Control Pty Ltd – or the Directorate General of Management Institute – to pay millions of dollars in fines and restitution through a compensation scheme for its formerly enrolled students.
The Australian Competition and Consumer Commission said on Monday that more than 3,000 students paid between $4,500 and $9,200 to enrol in two of the company’s programmes between 2017 and 2022, after which the commission began legal proceedings.
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These programs – Real Estate Rescue (RER) and Master Wealth Control (MWC) – provided students with advice on investing in real estate and businesses, including asset protection strategies.
The total cost of compensation for the 2,100 students enrolled in the MWC program alone is $14.7 million.
“The DG Institute must contact consumers who may be eligible for compensation and post information about the compensation scheme on its website and Facebook pages,” the Australian Competition and Consumer Commission said on Monday.
RER and MWC were promoted during other free wealth content shows run by company director Dominique Grubisa, and on the DGGI website throughout the five-year period until 2022.
The Federal Court found a number of specific statements made during the promotion and sale of the software that were found to be misleading.
One such claim was that RER students would be able to help distressed homeowners retain some equity when they sold their homes, but any remaining equity would be lost if the mortgage holder took possession of the home.
They claimed in part that this was because “banks are not giving change”, but the Australian Competition and Consumer Commission said: “In effect, the borrower is only entitled to the amounts owed to them, plus any reasonable costs of recovery.”
Another claim, made to MWC students, claimed that students “can fully protect all of their assets from creditors by establishing a specific trust fund at DG Institute called a ‘Vestey Trust’ using transaction documents provided by DG Institute.”
But the Australian Competition and Consumer Commission said: “In fact, the transaction documents provided did not provide the level of protection from creditors that was promised.”
It also claimed that the Vesti Box had been tested and found effective by the Federal Court, but the Australian Competition and Consumer Commission said this was not true.
Grubisa was fined $5 million for making false statements.
For her “willful involvement in the wrongdoing,” she was also banned from managing companies for five years and ordered to pay another $1 million.
Grobica was also banned from making similar or identical claims for five years, and the court ordered the institute’s general directorate to pay costs.
The significant orders and penalties “reflect the serious nature of the conduct and clearly demonstrate the consequences of making false claims when promoting goods or services to consumers,” said Lisa Carver, Australian Competition and Consumer Commission Commissioner.
“These orders underscore the importance of companies and their managers’ commitment to ensuring that the information they provide to consumers to promote their products and services is accurate and not misleading.”
