Jump! Swim Schools former parent company fined $23m, boss Ian Michael Campbell to pay $900k

A failed high-profile Gold Coast company and its former boss have been ordered to pay $23.9 million in fines and compensation.

Ian Campbell, Jump! Swim Schools, won the Australian Emerging Franchisor of the year) before the company was put into liquidation in 2019.

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THE former parent company and founder of Gold Coast swim school juggernaut Jump! Swim Schools has been ordered to pay $23.9 million in fines and compensation.

Franchisor Jump Loops, which traded as Jump Swim and was placed into liquidation in 2019, has been ordered to pay penalties of $23 million for making false or misleading representations and wrongly accepting payments from franchisees, in proceedings brought by the Australian Competition and Consumer Commission.

However the commission concedes the 174 franchisees affected by the scam will never be fully compensated and the fines were unlikely to be paid because the liquidated companies no longer had any money.

Jump Swim managing director Ian Campbell.

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The founder and former managing director of Jump Swim, Ian Michael Campbell, was also ordered by the Court to pay $500,000 in compensation to franchisees, and to pay a penalty of $400,000.

Belgravia Group purchased the franchise rights for more than 60 JUMP! Swim Schools in the

second half of 2019, preventing the network from collapsing after Mr Campbell’s assets were frozen in connection with the ACCC investigation.

Under Mr Campbell’s directorship, Jump Swim offered learn-to-swim school franchises for sale between March 2016 and July 2019.

The Federal Court declared, by consent, that Jump Swim falsely represented to 174 franchisees that they would have an operational swim school within 12 months of signing a franchise agreement. Most of those franchisees never received an operational swim school.

The court also found Jump Swim accepted payments from 127 franchisees when it knew it was unlikely to be able to provide a franchise within 12 months, or within a reasonable period of time.

JUMP Swim Schools founder and managing director Ian Campbell at the Bundall facility before he was hauled before the Federal Court. Pic by Richard Gosling

Mr Campbell was also banned from the franchise sector for three years and from making representations about time frames or wrongly accepting payment relating to a franchise for a period of five years.

The court found Mr Campbell had knowingly made the false and misleading representations to franchisees who had signed up to operate a swim school, and wrongfully accepted payments from franchisees.

Current Jump! Swim Schools CEO Mark Collins said he was happy there was finally some justice for those affected by the irresponsible actions of the former franchisor owner and said the new company would continue to fight for more compensation for those impacted.

“We all just want to move forward from this and get on with the work of teaching thousands of kids across the country life-saving swimming skills,” he said.

“There are a group of very hard-working and dedicated franchisees who make up the Jump! Swim Schools network across Australia, and they are very keen to put this behind them, as are we.

“It’s important though that there is justice and we maximise compensation for those who were most impacted by negligence and deception under the previous ownership.”

Mr Collins said he and his team had assisted throughout the legal process to-date and remained committed to helping where they could.

ACCC deputy chairman Mick Keogh said, although the fines were unlikely to be paid, he hoped they would act as a deterrent.

“We took this action to help franchisees achieve some compensation and to seek orders preventing Mr Campbell and Jump Swim from signing up further franchisees to Jump Swim or another future franchise,” Mr Keogh said.

“Mr Campbell has been ordered not to be involved in a franchise for three years.

“Unfortunately, because the companies have been put into liquidation, many franchisees are unlikely to be ever fully compensated for their loss, and the corporate penalties are unlikely to be paid. However, we consider the penalties ordered by the Court send a strong deterrence message.”

Additionally, the compensation order made against Mr Campbell means that 131 franchisees will be eligible for some partial compensation for the loss they suffered.

“Unfortunately despite the ACCC seeking freezing orders shortly after becoming aware of the conduct, the money paid by franchisees had already been largely dissipated,” Mr Keogh said.

The ACCC will attempt to contact all qualifying franchisees at their last known mail or email address, through the Australian Government Solicitor. Franchisees are not obliged to participate in the compensation scheme.

Mr Campbell made admissions and agreed to make joint submissions with the ACCC in relation to the penalty, compensation and other orders sought against him.

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