Australian fashion retailer Mosaic Brands will pay a hefty fine for breaching consumer law, over its marketing of health products that were not up to scratch during the height of the pandemic last year.
- The ACCC alleges one hand sanitiser sold by the company contained just 17pc alcohol, but was advertised as 70pc
- It also alleges the company was misleading in its advertising of some face masks for children
- Mosaic Brands has apologised to customers, saying it was “deeply disappointed” by the sale of these products
The consumer watchdog has whacked the company with five infringement notices over sales of hand sanitiser and face masks, amounting to a $630,000 fine.
Mosaic Brands owns more than half a dozen well-known brands, including Noni B, Katies, Rivers, Rockmans, and has more than 1,200 stores across Australia.
Australian Competition and Consumer Commission (ACCC) deputy chair Delia Rickard said businesses must never mislead their customers about the “certification, quality or properties of their products”.
“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,” Ms Rickard said.
Hand sanitiser not ‘up to scratch’
The ACCC alleges the company advertised an Air Clean-brand sanitiser on its Noni B website contained 70 per cent alcohol, when tests showed it only contained 17 per cent alcohol.
Another hand sanitiser sold by Millers, from the brand Miaoyue, was advertised to have 75 per cent alcohol when the ACCC’s testing showed 58 per cent.
Consumer group Choice made a complaint to the ACCC after a customer reported that a sanitiser bought from Mosaic Brands didn’t seem up to scratch.
“This action by the ACCC was only possible due to the work of the Choice community,” Choice campaigner Dean Price said.
“A supporter tipped us off that they didn’t think the hand sanitiser they bought from Mosaic Brands was up to scratch.
“Independent testing that was funded by Choice supporters confirmed their suspicion and led us to make a formal complaint to the ACCC.”
Ms Rickard said the regulator carried out its own testing after Choice raised the complaint.
“Independent testing of the hand sanitisers commissioned by the ACCC found that one of the sanitisers tested contained an alcohol content of 17 per cent and another had an alcohol content of 58 per cent, below the percentage advertised on Mosaic Brands’ websites in each case,” Ms Rickard said.
“This was also below the minimum 60 per cent alcohol concentration recommended by Australian health authorities.”
The ACCC said Mosaic Brands also sold Velcare-branded hand sanitiser products on websites advertising them as WHO-approved, when they were not.
KN95 Kids Safety Face Masks were sold as CD/FDA certified when they were not, while KN95 Adult Face Masks were sold as non-refundable, when consumers have a statutory right to a refund.
The ACCC said tens of thousands of hand sanitiser and face mask products were sold on Mosaic Brands’ websites.
The watchdog said the products were marketed with phrases such as “Be prepared”, “Stock up now before it’s gone”, as well as specific references to the pandemic such as “These are uncertain times and as the COVID-19 situation changes, we will be too” (sic).
The ACCC said the company had signed a court-enforceable undertaking agreeing to refund customers under a redress program.
It will also implement a three-year compliance program and properly substantiate its advertising claims for hand sanitisers and face masks, including by independent product testing.
‘We are deeply disappointed’: Mosaic Brands apologises
The ACCC said as part of the undertaking, Mosaic Brands admitted its conduct contravened Australian Consumer Law.
Mosaic Brands released a statement to the ABC, saying it unreservedly apologises to the affected customers.
“Early in 2020, wholesaler BDirect, who supply a number of large Australian retailers, sold via Mosaic Brands website a range of sanitisers and masks on the understanding that they complied with strict Australian regulations,” the statement said.
“Mosaic Brands subsequently learnt that BDirect provided misleading representation on two products, sold via the Mosaic website, or substituted a small number of products with an inferior one.
“These items were advertised for a short time and were immediately withdrawn from sale when the issue was identified.
“The Group then quickly took corrective action against the supplier regarding this matter.
“We are deeply disappointed that a small number of our customers nationally were sold these items. Mosaic agrees with and accepts the ACCC ruling. We unreservedly apologise to those customers.
“Throughout the COVID-19 pandemic, Mosaic Brands acted proactively to protect our customers and team in being the first national retailer to close its store network nationally and publicly supporting government-related health orders.”
Choice said it pushed for hand sanitiser regulations last year, and the government implemented them.
“These new regulations will make it harder for companies to repeat the mistakes of Mosaic Brands,” Mr Price said.