The Federal Court has ordered eyewear retailer Oscar Wylee to pay $3.5 million in penalties for misleading consumers about its chartiable donations between 2014 and 2018.
During the period the retailer made claims including, 'For every pair purchased, a pair is donated to someone in need,’ ‘One for one. All the time. Forever. We donate a pair of glasses to those in need for every pair purchased’ and ‘Buy a pair, give a pair.’
However, in almost five years Oscar Wylee sold 328,010 pairs of glasses but donated only 3,181 frames to charity, without lenses.
This equates to approximately one set of frames for each 100 pairs of glasses sold.
ACCC deputy chair Delia Rickard said that the retailer used the claims to differentiate itself in the market, while simultaneously depriving those in need of glasses.
"Oscar Wylee promoted its charitable activities as a core reason why consumers should buy Oscar Wylee glasses, but its claims were false and were made in circumstances where consumers could not easily verify these claims for themselves.
"The misleading conduct also portrayed Oscar Wylee as a socially-conscious company that made significant donations of glasses to people in need, which, because this was not true, unfairly differentiated it from other brands in the market.
"At the same time, Oscar Wylee deprived disadvantaged people in need of the benefits it promised in its advertising," she said.
The retailer also admitted to making misleading claims about its partnership with Rose Charities between 2014 and 2018.
These claims included statements like, ‘We have partnered with Rose Charities which helps build sustainable eye care programs in Cambodia’ and ‘We’re funding Lim studying to be an eye surgeon so he can keep taking solutions into his own hands’.
During this time, Oscar Wylee’s association with Rose Charities consisted of a single donation of $2,000 and 100 frames in 2014.
No further donations or support were provided to Rose Charities after this time, despite Oscar Wylee continuing to claim an affiliation with the charity until late 2018.
In 2013 the business also published a promotional video which claimed that it helped in different ways including conducting eye tests and training eye doctors.
The video showed scenes of poverty in Cambodia, Rose Charities’ eye clinic in Cambodia, and stated ‘Every Oscar Wylee glasses purchase will help restore vision in developing regions’.
"Oscar Wylee has taken advantage of the charitable nature and goodwill of consumers and its behaviour risks diminishing consumer confidence to support other businesses that genuinely engage in philanthropic activities," Rickard added.
"This penalty should serve as a reminder for any company considering making false claims to its customers in its marketing material, whether online, by email, on video, on social media or in store," she said.
In her ruling Justice Katzmann said that the retailer benefitted from betraying its philanthropic promise.
"Oscar Wylee stood to profit from inducing consumers 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 promise," she said.
In response to the ruling, Oscar Wylee has already taken steps to rectify its actions, the business said in a statement.
"Oscar Wylee has taken corrective action in response to the court action and in line with our ongoing commitment to corporate social responsibility.
"We have donated 336,585 pairs of glasses frames and $80,000 cash donations to charities supporting eyecare for the disadvantaged.
"We have also adopted a strict Trade Practices Compliance Policy, directed to the protection of consumers, and appointed a Compliance Officer responsible for its implementation.
"Oscar Wylee acknowledges the importance of the issues raised by the ACCC and sincerely regrets the contraventions of the Australian Consumer Law (ACL)," the business said.
Alongside its penalties, the Court also ordered Oscar Wylee to publish information online explaining its breaches of the ACL and pay a contribution to the ACCC’s costs.
Oscar Wylee admitted liability and made joint submissions with the ACCC to the Federal Court consenting to the orders sought.