In a recent case1 the ACCC has successfully brought a claim against a company for building its brand and making profits off donation promises and affiliation with a charity when they did not deliver on the promises or have a close affiliation with the charity.
The Facts
- Oscar Wylee (who sell optical glasses) claimed that for each pair of glasses they sold, they would donate another pair of glasses to someone in need between 13 January 2014 and 31 December 2018.
- Oscar Wylee sold some 328,010 pairs of glasses and only donated 3,181 pairs.
- Oscar Wylee represented that it was closely affiliated with Rose Charities.
- In reality the only affiliation Oscar Wylee had with Rose Charaties was one donation of $2,000 on 4 February 2014.
The Court
The Court said that:
“[72] By misrepresenting the facts Oscar Wylee improperly exploited the good nature of consumers to its advantage by contriving to enhance the value of its brand by falsely associating it with altruistic pursuits.”
The Court ordered that Oscar Wylee pay penalties of $3.5 million and orders preventing Oscar Wylee misleading the public further.
Conclusion
The Court imposed the significant penalties to act as a real deterrent for Oscar Wylee and others who might be tempted to act in this way.
This case is a signal that the Court is prepared to come down hard on people and organisations who gain profit from the good work and reputation of the not-for-profit space without actually following through on their promises.
Foonote
1 Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd [202] FCA 1340
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