Mosaic Brands, the largest speciality fashion retail group in Australia, has been fined $630,000 after it admitted that it breached Australia Consumer Law in its promotion of pandemic-related ‘Health Essential Products’.
The Australian Competition and Consumer Commission (ACCC) issued five infringement notices to the company in respect of alleged false or misleading representations relating to hand sanitiser and face masks advertised on Mosaic Brands websites and via direct marketing between March and June 2020.
Health Essentials products were promoted at a time when Covid-19 restrictions were first announced by Federal and State governments and there was intense public concern regarding the availability of sanitisers and face masks.
According to the ACCC, tens of thousands of hand sanitiser and face mask products were sold on Mosaic Brands’ websites.
Product said to contain 70% alcohol had only 17%
Specifically, the infringement notices related to advertising by the company which stated that Air Clean hand sanitiser sold on the NoniB website contained 70 percent alcohol, when a sample tested by the ACCC was found to contain only 17 percent alcohol. Similarly, Miaoyue hand sanitiser sold by Millers was claimed to contain 75 percent alcohol, when a sample tested by the ACCC was found to contain 58 percent alcohol.
The company also claimed Velcare-branded hand sanitiser products sold on its websites were ‘WHO-approved’ when they were not.
In addition, claims relating to two face masks were found to be in breach of consumer law. KN95 Kids Safety Face Masks sold on its websites were said to be ‘CE/FDA certified’ when they were not; while KN 95 Adult Face Masks were said to be ‘non-refundable’, when in fact consumers have a statutory right to a refund under the consumer guarantee remedies.
The products were marketed by Mosaic Brands using such phrases as ‘Be prepared’, ’Stock up now before it’s gone’, ‘Remain Healthy’ and ‘Stay Safe and Clean’, as well as references to the pandemic such as ‘These are uncertain times and as the Covid-19 situation changes, we will be too’ and ‘It’s important we are all doing our part to protect the most vulnerable’.
Businesses cannot mislead using false claims
“Businesses must never mislead their customers about the certification, quality or properties of their products,” ACCC Deputy Chair, Delia Rickard, said.
“But we were particularly concerned about the representations by Mosaic Brands because the statements which Mosaic Brands has admitted were false or misleading related to certain protective health properties at the time of a global pandemic.”
Mosaic Brands also signed a court-enforceable undertaking agreeing to refund customers under a redress program, implement a three-year compliance program and properly substantiate its claims with respect to hand sanitisers and face masks, including by independent product testing.
The company admitted in the undertaking that its conduct contravened the Australian Consumer Law.
