Finding a way for your business to stand out from your competitors is important, but care needs to be taken to ensure that you can actually deliver on any promises made. The penalties can be large and quickly erode any profit or goodwill a marketing campaign has delivered.
Oscar Wylee is an optometry and eyewear retailer and operates both online and through physical stores across Australia.
On 18 September 2020, the Federal Court ordered Oscar Wylee to pay pecuniary penalties totalling $3.5 million, made up of:
- $2,100,000 in respect of contraventions of section 33 of the Australian Consumer law (ACL); and,
- $1,400,000 in respect of contraventions in respect of s29(1)(h) of the ACL.
In addition, Oscar Wylee was also required to publish information online, explaining its breaches of the ACL, pay $30,000 to the ACCC's costs and have its compliance program independently reviewed for a period of three years at its cost.
Oscar Wylee admitted liability and made joint submissions with the ACCC to the Federal court consenting to the orders sought.
This case serves as a timely reminder that businesses must be truthful in their dealings with consumers and must honour the representations they make.
Buy a pair, give a pair
Between 13 January 2014 and 31 December 2018, Oscar Wylee made statements to the effect that for each pair of glasses a consumer purchased, it would donate another pair of glasses to someone in need and that it made such donations at the time of the consumer's purchase.
The statements made included statements such as “Buy a pair, give a pair”; “For every pair purchased, a pair is donated to someone in need”, “Buying a pair today? As soon as you do, we'll donate a pair to someone in need”.
It was found that Oscar Wylee did not honour the statements made, as during this period Oscar Wylee sold 328,010 pairs of glasses, but only donated 3,181 pairs of glasses. It also did not have systems in place to facilitate the donation of glasses to people in need in a timely fashion.
The Court found that this conduct was liable to mislead the public as to the quantity of the goods in contravention of section 33 of the ACL and that Oscar Wylee had engaged in misleading or deceptive conduct in breach of section 18 of the ACL.
Section 33 of the ACL provides that a person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any services.
Rose Charities
During the same period, Oscar Wylee also represented it was affiliated with Rose Charities. Such statements included “We have partnered with Rose Charities which helps build sustainable eye care programs in Cambodia.”
The court found that by making such representations, Oscar Wylee represented that it was closely affiliated with Rose Charities, where it had no affiliation and had only donated $2,000 to such charity and 100 glasses frames.
The Court found that Oscar Wylee had made false or misleading representations in contravention of s29(1)(h) of the ACL and had engaged in misleading or deceptive conduct in breach of section 18 of the ACL.
Section 29(1)(h) provides that a person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services make a false or misleading representation that the person making the representation has a sponsorship approval or affiliation.
A timely reminder
Justice Katzmann found that “Oscar Wylee stood to profit from inducing customers to purchase its products and still does. It built its reputation by engaging in the contravening conduct, appealing to socially-conscious consumers who wanted to support charitable causes through their purchasing behaviour. Its conduct was a betrayal of that promise1”
Footnote
1 Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd [2020] FCA 1340 [76]
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