$5,000,000 Punishment for Misleading and Deceptive Conduct Despite No Proven Harm
Well-known activewear brand Lorna Jane has recently faced the Federal Court on allegations of misleading and deceptive conduct. The case concluded with Lorna Jane agreeing to a massive $5,000,000 penalty, to pay legal costs, publish a corrective notice and ensure future compliance with the consumer law.
In 2020, during the height of the COVID-19 pandemic, Lorna Jane marketed and sold activewear with the “LJ Shield”. It was claimed that the shield would stop the transfer of pathogens, mould and viruses, including the COVID-19 virus. It followed that wearing the shielded activewear would eliminate or protect consumers from the virus.
The following advertisement was used prominently in the campaign:
The Court slammed Lorna Jane for its representations, saying that it was “exploitative, predatory and potentially dangerous.” The Court agreed that the representations were a serious breach of the Australian Consumer Law, also giving the following reasons:
- There is a need to deter others from making claims regarding COVID-19;
- The representations would have raised further fear and concern for consumers; and
- The representations had the potential to reach a large audience, as they were made on Instagram stories, media releases, advertising on its website, direct emailing, and in-store advertising.
The Court agreed to impose the $5,000,000 penalty despite there being no proof that customers were actually harmed by Lorna Jane’s representations. There was also no proof that Lorna Jane knew the representations were false or that they profited from them. This should act as a warning for businesses and a reminder to check that all business marketing is accurate.
If you are concerned about the accuracy of your marketing or business information, please contact one of our experienced lawyers at Taurus Legal Management on (03) 9481 2000 or firstname.lastname@example.org