BSA Decisions Ngā Whakatau a te Mana Whanonga Kaipāho

Summary

An item on Holmes featured the Alpha Club which, it reported, represented itself as a travel club. The item suggested the club was involved in pyramid selling activities, and included amateur footage of a club meeting, a woman encouraging another person to join the club, and interviews with people who had attended meetings. An Auckland barrister expressed an opinion that he was in "no doubt" that the activities amounted to pyramid selling. The item was broadcast on TV One on 10 May 1999, commencing at 7.00 pm.

Mr Price complained to Television New Zealand Limited, the broadcaster, that the broadcast was inaccurate, unbalanced, biased and misleading, and that he had suffered financial loss as a result.

TVNZ responded that the barrister interviewed was a recognised expert in the field of consumer law. It denied that the item was untrue or inaccurate, unfair or unbalanced, and said there was nothing misleading about the information presented. It declined to uphold the complaint.

Dissatisfied with TVNZ’s response, Mr Price referred his complaint to the Broadcasting Standards Authority under s.8(1)(a) of the Broadcasting Act 1989.

For the reasons below, the Authority declines to uphold the complaint.

Decision

The members of the Authority have viewed a tape of the item complained about, and have read the correspondence which is listed in the Appendix. On this occasion, the Authority determines the complaint without a formal hearing.

The Holmes programme broadcast on 10 May featured the Alpha Club which it was reported represented itself as a travel club. The item suggested that the club’s activities constituted a pyramid-selling scheme which was operating in breach of New Zealand’s fair trading legislation. Amateur footage of a club meeting, interviews with two people who had attended meetings and declined to join, secretly-filmed footage of a club member encouraging a potential member to join the club, and an interview with an Auckland barrister, were shown. The barrister, the item reported, was experienced in the field of consumer law. He expressed himself in "no doubt" that the activities described amounted to pyramid-selling.

Mr Price complained to TVNZ that the item had portrayed the club’s business in a way which had made it look like a pyramid selling scheme. Had the programme done its homework on what a pyramid scheme was, he continued, it would have known that the Alpha Club was "most definitely not a pyramid scheme". The item had not mentioned, he wrote, that members/agents paid tax on their commissions, and that they received discounts on their travel and accommodation costs.

He questioned whether either the lawyer interviewed in the item, or the programme itself, knew what a pyramid scheme was. Mr Price asserted that as a result of the broadcast, he had lost the opportunity to enrol three people who had been willing to join the club. That, he claimed, equated to a loss to him of $6,300.00, for which he sought reimbursement from the broadcaster.

TVNZ considered the complaint in the context of standards G1, G6, G11(i), and G14 of the Television Code of Broadcasting Practice, which had been nominated by the complainant. The first three require broadcasters:

G1  To be truthful and accurate on points of fact.

G6  To show balance, impartiality and fairness in dealing with political matters, current affairs and all questions of a controversial nature.

G11  To refrain from broadcasting any programme which, when considered as a whole:

i) Simulates news or events in such a way as to mislead or alarm viewers

The remaining standard provides:

G14  News must be presented accurately, objectively and impartially.

TVNZ commenced by noting that a number of members of the public had expressed concerns to Holmes about the club’s activities. The programme’s decision to investigate was a legitimate function of journalism, it observed, and such inquiries often resulted in information which was a matter of public interest. In this case, it noted, it "took the responsible step" of discussing the matter with a recognised expert in the field, after concluding its inquiries.

Commenting that Mr Price had failed to establish why the club did not qualify as a pyramid scheme, TVNZ said that it stood by the expert advice it had received, together with the associated information it had obtained. The taxable nature of Mr Price’s income from the club, together with his travel benefits, did not make the club’s activities legal, it underlined. Mr Price’s own admissions about "[making] money by signing up new members" suggested, the broadcaster pointed out, that the prime activity of the club was that of a pyramid scheme. TVNZ concluded its observations by noting that the Commerce Commission, and its Australian equivalent, both were concerned about the Alpha Club.

There was nothing presented in the item which was untrue or inaccurate, and the complainant had not shown that the barrister’s assessment of the club as a pyramid scheme was wrong, TVNZ wrote. It declined to uphold the complaint under standard G1.

The programme had invited a representative of the club to appear in the item, and he declined, it advised. Because the programme had provided the Alpha Club with the opportunity to contribute to the item, TVNZ wrote, it had complied with the requirements of standard G6 to provide fairness and balance.

No news event had been "simulated" in the item, TVNZ submitted. The information had been carefully gathered, and the views expressed were supported by the barrister’s expert comment. Therefore, there had been no breach of standard G11(i), it concluded. It failed to find evidence that the item was anything other than accurate, objective and impartial and, accordingly, declined to uphold any breach of standard G14.

In referring his complaint to the Authority, Mr Price said that the item provided a misleading and inaccurate portrayal of the Alpha Club. The material in the item was untrue, defamatory, and libellous, he wrote. He wanted, he reiterated, reimbursement of $6,300.00 which he could prove he had lost as a result of the broadcast. He wrote:

If the Alpha Club were a pyramid scheme why hasn’t the operation been shut down here in N.Z.? Why is the Alpha Club operational in 15 countries?

Mr Price concluded by re-emphasising that what was untrue and inaccurate about the programme was that "it’s not a pyramid scheme". The video of the Alpha Club meeting, which the barrister viewed, was only a small portion of the whole presentation, he wrote, so how could the barrister make an accurate judgment without having all the facts? He also denied that the item was fair and balanced, even if a representative from the club had been invited to appear. It was misleading, not objective and very biased, he argued.

When invited to reply, TVNZ said it had nothing further to add.

The Authority’s Findings

The Authority commences by noting that standard G11(i) refers to the simulation of news and events in a broadcast. It finds that this standard has no relevance to the complaint. There was no simulation depicted, as the broadcast contained actual footage and the Authority accordingly declines to uphold the complaint under standard G11(i).

Standard G14 requires news broadcasts to be presented accurately, objectively and impartially. On this occasion, the Authority subsumes that standard in its consideration of standard G1, to which it now turns.

Standard G1 contains a requirement that broadcasters be truthful and accurate on points of fact. Mr Price asserted that the programme breached that requirement because the Alpha Club was not a pyramid scheme. He did not provide any further explanation, except to remark that the programme failed to mention that members paid tax, and received travel and accommodation benefits. The barrister interviewed during the programme said that the scenario portrayed to him indicated that it was a pyramid scheme. Whatever technically might constitute a pyramid scheme, in the Authority’s view, the description given in the programme was a reasonably accurate representation of a pyramid scheme in which recruits find and commit new recruits, and each pays a monetary amount on recruitment. The programme’s failure to mention tax payments, and members’ benefits, was not relevant to an assessment of the club’s status. The Authority declines to uphold the complaint under standard G1.

Standard G6 is applicable to the programme in its assertion of the Alpha Club’s status as a pyramid scheme. That standard requires the broadcaster to show balance, impartiality and fairness in dealing with that "question of a controversial nature" which was raised by the programme’s assertion. The Authority notes that a representative of the Club had declined an invitation to appear on the programme. Furthermore, the Authority takes cognisance of the public interest nature of the item. In view of those factors and the opportunity given to the Alpha Club to participate in the broadcast, it declines to uphold the complaint under the standard.

For the reasons set forth above, the Authority declines to uphold the complaint.

Signed for and on behalf of the Authority

Sam Maling
Chairperson
13 September 1999

Appendix

The following correspondence was received and considered by the Authority when it determined this complaint:

1. Zane Price’s Complaint to Television New Zealand Limited – 17 May 1999

2. TVNZ’s Response to the Formal Complaint – 9 June 1999

3. Mr Price’s Referral to the Broadcasting Standards Authority – 22 June 1999

4. TVNZ’s Response to the Authority – 16 July 1999