The ACCC said Phoneflasher.com had made false and misleading representations concerning the performance of its Phoneflasher mobile accessory on packaging, displays, Web site and promotional materials.
Specifically, the ACCC is zeroing in on Phoneflasher.com's claim that its product reduces radiation as well as making a claim on its Web site that it has "significant health benefits."
The ACCC has also instituted proceedings against, Jimeale Jorgensen and Alan Jorgensen, two representatives of Phoneflasher.com.
The ACCC alleges that the claims are in breach of section 52 of the Trade Practices Act 1974 because the product does not work as claimed by Phoneflasher.com and that the company has "no reasonable basis for making the claims."
Section 51A of the Act says "if a company makes a representation as to a future matter it must have a reasonable basis for making the claims."
The ACCC is seeking court orders including declarations, corrective advertisements, injunctions, findings of fact and costs.
The matter has been listed for a directions hearing in the Federal Court in Adelaide on 20 July.