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Mr KELVIN THOMSON(10.21 a.m.) To commence, I think it is appropriate to take the
House through some of the actual provisions of the Hearing Services Administration Bill
1997, which we are now debating. This bill establishes a voucher system for the provision of
government funded hearing services from 1 July. The intention of that is to give adults with a
hearing loss a choice of service provider. The outline of the bill talks about introducing
managed competition within and between the private sector and the government provider of
hearing services, with greater industry involvement in self-regulation and standards.
Within the bill we find: a scheme for the accreditation of suitable service providers, including
the current government provider, Australian Hearing Services; rules of conduct for service
providers; and rules surrounding the nature, extent and use of the vouchers. Other
arrangements with service providers are to be dealt with through contractual arrangements.
Administration of the voucher system is likely to be delegated by the Minister for Health and
Family Services (Dr Wooldridge) to the department. Under that delegation, the department
will primarily issue the vouchers to eligible adults who qualify to be participants in the
system, it will accredit appropriate bodies as providers of hearing services to those people
who are issued with a voucher, and it will provide advice relating to hearing services.
Currently government funded hearing services are provided through Australian Hearing
Services. If we look further into the bill, and the notes on clauses, it talks about contracted
service providersthat is, service providers who have been approved under the accreditation
scheme and who have entered into a contract to provide hearing services to voucher holders.
We see hearing services defined as the services and goods provided for hearing rehabilitation,
assessment of hearing or hearing loss prevention. Goods will include hearing aids and related
devices. The bill says it is envisaged that most hearing loss prevention will still be undertaken
by Australian Hearing Services.
On the issue of eligible persons, the bill does not include eligibility for Commonwealth
seniors card holders. That removal was announced in the 1996-97 budget. I may have the
opportunity to return to that issue later on in the debate but, if not, I indicate at this point that
I think that the removal of eligibility for Commonwealth seniors health card holders is a very
shabby provision indeed.
I am most concerned about a bill which introduces this element of deregulation and
encourages the private sector provision of health services because of my experience with a
couple of what I would only describe as bogus hearing test companies and companies which
have provided hearing services in Victoria andI am led to believeeven interstate.
I have had over 100 complaints from people in my electorate about the activities of two of
these companies, which go by the names of Ear Care and Better Care, which have contacted
people at their home through the use of telemarketers inviting them to come for free hearing
tests, luring them with the promise of extravagant amounts of compensation from their
former employers for industrial deafness, offering them hearing aids and the like to provide
hearing services, but ultimately ripping them off, often for amounts like $250 or even $400
or, in more extreme cases, thousands of dollars.

I have been approached not only by people who have been the victims of this scam but also
by telemarketers involved in the operation who subsequently came to realise that they were
involved with an improper organisation. These telemarketers were told to tell the people they
rang that, if they suffered a hearing loss due to work force participation of even as little as
one per cent, they were entitled to some form of compensation. In Victoria that is not the
case. For better or worse, there is legislation in Victoria which establishes a seven per cent
threshold before a person can make a claim for work related hearing loss. The telemarketers
were told not to mention any costs or money and, if they were queried about scams, people
were to be told, `You do have to pay $250 but, if the claim is not proceeded with, you will get
it refunded.' In fact, these people did not have their money refunded.
One of the telemarketers, Ms Lorraine Crupi, was so convinced by the company's
representations that she even organised for her own mother to come in and have a test. Her
mother was told by the consultant that she had a strong case for compensation so she should
pay over the $250 so they could proceed. Subsequently, she received a letter from the Ear
Care solicitors seeking a further $150, which she sent off. Then she received a report back
from the solicitors saying it would not be wise to proceed because her hearing loss was not
substantial enough and they had therefore closed her file. There was no mention of any
refund and the medical report that they referred to was dated 26 July, a date at which the
solicitors had the report in their possession when they sent the letter to her saying that she had
a good case for compensation. When she sought a refund, she received a further letter which
put her on an absurd treadmill from which it was simply impossible for her ever to get a
decision out of the company about refunding her money.
At various times the telemarketers were told by their supervisors that they did not come over
strongly enough and that if they did not get in more people the telemarketing operation would
close. They were told that it was better to contact people with ethnic names from ethnic
backgrounds. They were told, `Australians know better.' The telemarketers were told that if
they were queried about hearing loss scams they were to say, `Oh, that involves other
companies. We are a branch of WorkCover.' Indeed, some of the telemarketers thought that
statement was true. They were told to say, `This is an accredited part of WorkCover,' or `We
are authorised by the government to conduct these tests.'
This second telemarketer also said to me that people were told to ring people from nonEnglish speaking backgrounds. The supervisors said, `Concentrate on ethnic names.
Australians will not claim. They know how the system works.' Indeed, our system has no
need of companies like Ear Care or Better Care and people can get hearing tests at their
doctor's surgery or community health centres without having to pay for them. If they have a
legal right to compensation, they can pursue that through recognised lawyers.
Once you come in for a test from one of these companies, you are seen by a consultant who is
paid by commission. For example, they get $120 for every claim that goes through. Those
consultants do not have any qualifications. You or I, Mr Deputy Speaker, could become
consultants for Ear Care. The commission basis for payment means that there is simply no
incentive for them to be honest even if they do have the capacity to measure hearing loss. The
consultants told people that compensation would be automatic, that any problems were only
due to a government backlog. They were also told to tell people who were in the work force,
some of whom were worried about making claims on their present employers, that their
employers would never find out about their claims. That was nonsense. Nevertheless, that
was what they were told to tell prospective customers.

This is a disgraceful way of doing business. I want to indicate to the House a few more
examples of how they have conducted themselves. A Mr and Mrs Cavaleri of Hope Street,
Brunswick, told the company Better Care that their employers were no longer trading and
that they had no documents to prove they had ever been employed there. But a Mr Peter
Adamopoulos from Better Care assured both of them that they had cause to seek damages. He
said it did not matter that their employers were no longer trading. But, once they had paid
over $500, they were told by Better Care's solicitors, Behan and Speed, that, if they could not
provide any proof of employment and if their employers were no longer trading, they would
not be able to make a successful claim.
A Mr Calvano of Denys Street, Fawkner, was told he had a 58 per cent hearing loss and
would be able to claim compensation for sure. Once he paid over his $250, however, he was
referred to a specialist who told him that his hearing loss was not work related, but due to the
ageing process. A Mrs Rad of St Albans paid over $250 to Better Care at St Albans after
being told she had a substantial hearing loss and would be able to claim $2,500 in
compensation from her former employer. She raised the issue of proof of employment and
was told by her consultant that, given her level of hearing loss, she would have no difficulty
claiming compensation. But then Behan and Speed, the Better Care solicitors, told her there
was no point in pursuing her case because she had not kept any records showing that she had
been employed at the relevant time. Of course, as the relevant time was many years ago, it is
not surprising that she did not keep any records. Nevertheless, Better Care and their solicitors
refused to refund her $250. That is the kind of company of that Better Care has been.
Ear Care in most respects have been even worse. They told people that they would have a
successful claim. When those people handed over their money, they were later told that their
hearing loss was not compensable. When Mrs Concetta Rocco asked Ear Care to discontinue
her claim and refund her money, they refused to do thatthey kept going anyway. It is not
only the companies that have acted badly; it is the solicitors they have acting on their behalf.
For example, a Mr Lindus of Coghlan Street, Niddrie, paid over $250 to Ear Care and then
$150 to Anthony Raso and Associates. He received a letter from Anthony Raso and
Associates before paying over that $150. It said:
The evidence to date suggests you have a very strong case and very likely a successful claim.
But, once he had paid over that money, he received a letter in June saying that his claim
would be unsuccessful. It suggested that he no longer pursue his claim, and said that the
company was closing its file. Mr Lindus pointed out to me that he was not tested for hearing
loss between 13 and 28 June. One wonders on what basis the solicitors changed their
assessment from likely eligibility to ineligibility.
I have had a procession of cases of this kind where people were told before they paid over
their money, `Yes, you'll be able to make a successful claim.' But after they paid over their
money they were told, `No, you don't have any entitlement to make a claim.' I have spent a
great deal of time seeking refunds on behalf of those people. I spent three hours one day with
a Mr Trevor McTaggart from Ear Care. I was able to secure a couple of refunds. But I have
got to say that he is one of the biggest conmen I have ever met. He says he is an ex-builders
labourer and that he is on the workers' side. That is a lot of garbage. Exploiting retired people
of Italian, Greek, Lebanese and Arabic-speaking backgrounds has nothing whatsoever to do
with being on the side of workers. It is a shameful way to earn a living.

I have come across examples of letters from solicitors. I have got one here which has on the
top of the letterhead `Vernons Barristers and Solicitors'. It is addressed to a Mr Wilkins in
Airport West, telling him that they are closing their file. On the bottom it is signed `Yours
faithfully, Anthony Raso and Associates', an entirely different firm of solicitors. What an
appalling situation. This is the kind of operation which these private sector operators have
been running.
In late 1995, I received advice from an impeccable source about the Ear Care operation. I
went straight to the fraud squad. I did so because it indicated to me, beyond any shadow of a
doubt, two things which I had strongly suspected based on the case histories of so many
constituents that I had seen being taken down: first, that Ear Care were sending out letters
routinelynot inadvertently; routinelyand as a matter of policy to people telling them that
they were ready to proceed further with their claim, had the results of the tests and so on, and
asking people for $250 or, in cases where they had already received $250 and were feeling
greedy, asking for another $150 when they had the hearing test results and knew perfectly
well that their client did not have sufficient hearing loss to make a valid legal claim. This is
straight up and down fraud: making representations to someone to hand over money to you so
that they can get compensation when you know perfectly well that they are never going to get
any compensation.
The second disgraceful thing is this: the two firms of solicitors who were supposed to be
doing legal work for Ear CareAnthony Raso and Associates and Vernonswere actually
only handling a handful of cases. The vast majority of cases were being processed from start
to finish in Ear Care's head office using massive quantities of Anthony Raso's letterhead and
Vernon's letterhead to deceive clients into thinking that their cases were being handled by
lawyers so they would part with more money. This is, as MPs would know, not only a breach
of the legal profession's monopoly on the provision of legal services but also gross
professional misconduct on the part of those two law firms which allowed Ear Care, no doubt
for a fee, to use their name. The whole operation was bogus. Ear Care's head office had a
number of phone lines in it. Staff were told, `If lines A, B and C ring, you are to answer "Ear
Care"; if line D rings, you are to answer "Vernon's"; if line E rings, you are to answer
"Anthony Raso and Associates".' The more I learned about that scam the more incredulous I
became. I even made inquiries to satisfy myself that Vernon's and Anthony Raso actually
existed and were not a complete legal fictiona figment of the imagination of those who run
Ear Care.
Those legal firms do exist but they should not. I have advised the Law Institute about their
conduct. In my view, they should have been struck off by now. To the best of my knowledge,
they have not been. It is little wonder that the legal profession does not enjoy a better
reputation. The fraud squad and the Victorian WorkCover Authority eventually carried out
raids on Ear Care and seized their files. At about the same time Ear Care went into external
administration. It is pretty reasonable to assume that the raids were the cause of the company
going out of business. I congratulate the WorkCover Authority for doing that.
Late last year the Victorian government also initiated legislation amending the Accident
Compensation Act, which inserted a new section of prohibited conduct concerning touting for
claims. To the best of my knowledge, that legislation has also been useful in stamping out
this rort, and it too is welcome. These acts, however, have not achieved any refunds for the
hundreds, and probably thousands, of Victorians ripped off by these companies.

A group called the Public Interest Law Clearing House contacted me in 1995 about pursuing
a class action on behalf of the victims of Ear Care. Through a great deal of hard effort and
commitment on the part of Ms Caitlin English of the Public Interest Law Clearing House and
Mr Michael Piu, who worked for me during 1996, dozens of claims for refund were lodged
with the Small Claims Tribunal. With Ear Care going into bankruptcy, it seems that very few,
if any, of these people will ever get their money back. I do not walk away for one moment
from the role that I played in putting Ear Care out of business, because there is no doubt that,
for every case we lodge with the Small Claims Tribunal, their telemarketers were luring
another 10 people to hand over their money for the pot of gold on the other side of the
rainbow.
I am distressed that so many people have been so cold-bloodedly ripped off and that those
low life who ran Ear Care, Trevor McTaggart, Mark Fisher and Andrew Newland, are still
out there walking the streets. They should be charged, and the sooner the better. I am also
concerned that these people will try to get themselves into the business of hearing services.
They have been there before. They have set up new companies at the drop of a hat with
names like National Hearing Services, not unlike the name of the Commonwealth's own
service provider, and they have been in the business of supplying hearing aids and the like.
Notwithstanding the provisions in this bill for accreditation and for ensuring that those
engaged in providing hearing services are quality providers, I am concerned that we have
people out there who may seek to abuse these new provisions. I want to express my concern
about those issues to the House.
I further understand that this problem is not confined to Victoria. For example, in June last
year there was a report in the Sydney Morning Herald referring to the New South Wales Law
Society seeking to recover up to $30 million in fees paid by 20,000 people to Better Care,
which is described as a Melbourne based company.
It is most important that if this legislation is to proceedthe opposition has many concerns
about its provisionsthe minister can guarantee that the quality of hearing aids is going to
remain state-of-the-art, that the clients are not going to be subjected to co-payments and that
the government is not going to further undermine Australian Hearing Services by moving to
privatise it. (Time expired)