Noni B, Katies retail brand owner fined $630,000 for breaching consumer laws

Mosaic Brands received five ingringement notices for false and misleading advertising of its health essential hand sanitiser and face masks

The owner of women’s fashion brands including Katies, Millers and Noni B has been fined more than $600,000 for multiple breaches of the Australian consumer law relating to its health essential product line.

ASX-listed Mosaic brands received five infringement notices from the Australian Competition and Consumer Commission (ACCC) worth $630,000 relating to false or misleading advertising in relation to its hand sanitiser and face masks on its website and via direct marketing between March and July 2020. The products were grouped under the company’s ‘Health Essential Products’ offering.

The action against Mosaic came after a complaint from consumer advocacy site, Choice, which led to the ACCC commissioning independent testing of the company’s hand sanitisers.

Off the back of this, the ACCC found a sample of the ‘Air Clean’ hand sanitiser sold on the Noni B website, which was advertised as containing 70 per cent alcohol, was found to contain just 17 per cent alcohol when tested. Similarly, a sample of the ‘Miaoyue’ hand sanitiser sold by Millers contained 58 per cent alcohol but had been advertised as containing 75 per cent alcohol.

In both cases, results were under the minimum 60 per cent alcohol concentration recommended by Australian health authorities. The Consumer Goods Information Standard released new requirements in 2020 that hand sanitiser manufactured from 24 May 2020 display the amount of alcohol contained as a percentage by volume.

In addition, Mosaic’s Velcare-brand hand sanitiser products were advertised as being WHO-approved but were not, while KN95 Kids Safety face masks were advertised as being CE/FDA certified but were not. KN95 Adult face masks were also shown as non-refundable even though consumers have a statutory right to a refund under. Mosaic sold tens of thousands of these products.

The ACCC noted all of these products were advertised at the height of Australia’s first COVID-19 restrictions and lockdown, leading to intense public concern around using sanitiser and face masks. Mosaic’s products used distinct branding in response to the crisis, including phrases such as ‘be prepared’, ‘stay safe and clean’ and ‘these are uncertain times and as the COVID-19 situation changes, we will be too’.

Another concern for the ACCC was Noni B and Katies sites advertising Velcare hand sanitiser with the tagline, ‘Protect yourself from viruses and germs during uncertain times with this 10 x pack of 100ml WHO-approved hand sanitiser’.

Mosaic Brands has admitted its conduct contravened Australian Consumer Law and been fined $630,000 across five separate infringement notices. The company is also expected to identify and contact customers who purchased sanitiser in the same batches as those tested by the ACCC and refund the purchase price, as well as provide refunds to those who purchased KN95 Kids Safety face masks. The company must also offer a refund to those who were previously told they couldn’t get a refund on the KN95 Adult face masks and undertake a range of compliance and testing programs for a period of three years.  

The notice covers the following Mosaic Brands: Noni B, Autograph, BeMe, Crossroads, katies, Millers, Rivers, Rockmans and W.Lane. The group operates 1333 retail stores nationally as well as dedicated ecommerce sites for each brand.

“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,” ACCC deputy chair, Delia Rickard, stated.

“Our investigation also found that mosaic brands’ Kids KN96 mask was not certified by European and US standard authorities as they had advertised.”

The latest case follows ACCC’s action against the Lorna Jane also alleging breaches of Australia’s consumer law for false and misleading advertising around its ‘LJShield’ clothing technology, which it claims can protect wearers against viruses including COVID-19.

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