Fashion giant Mosaic Brands has been slapped with a $630,000 fine for misleading customers and selling dodgy health products during the pandemic.
The Noni-B and Rivers owner must also refund customers who bought its hand sanitiser and face masks during 2020, under an agreement signed with the Australian Competition and Consumer Commission.
The ACCC found Mosaic, Australia’s largest fashion retailer with 1200 outlets, breached consumer laws by falsely claiming its KN95 kids face masks had been certified by US health authorities.
Mosaic also sold hand sanitiser with an alcohol content of less than 60 per cent, the threshold Australian health authorities regard as necessary to protect against coronavirus, the ACCC said.
“One of the sanitisers tested contained an alcohol content of 18 per cent, and another had a content of 58 per cent, below the percentage advertised on Mosaic Brands’ websites,” ACCC deputy chair Delia Rickard said.
Mosaic advertised its dodgy sanitiser for more than a month from June to July at the height of the pandemic in Australia in 2020.
It adopted taglines such as “protect yourself from viruses and germs during uncertain times”, and falsely claimed one of its sanitiser products was approved by the World Health Organisation.
The WHO does not approve or certify hand sanitiser products.
Five infringement notices issued by the ACCC cover the following:
- Air Clean hand sanitiser sold on the Noni-B website contained 70 per cent alcohol, when a sample tested by the ACCC was found to contain 17 per cent;
- Miaoyue hand sanitiser sold by Millers contained 75 per cent alcohol, when a sample tested by the ACCC was found to contain 58 per cent;
- Velcare-branded hand sanitiser products sold on its websites were ‘WHO-approved’, when they were not;
- KN95 Kids Safety Face Masks sold on its websites were ‘CE/FDA certified’, when they were not;
- KN 95 Adult Face Masks were” non-refundable”, when consumers have a statutory right to a refund under the Australian law.
The $630,000 fine is equivalent to less than 1 per cent of Mosaic’s annual revenue in the 2019-20 financial year.
In a statement, Mosaic apologised, blaming one of its suppliers.
“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,” a spokesperson said in a statement on Thursday.
“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.”
“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.”
The ACCC began its investigation after a complaint from consumer group CHOICE, which probed Mosaic after a tip-off from a customer.
“Mosaic Brands is paying the price for misleading consumers at the height of the pandemic,” CHOICE campaigner Dean Price said.
“This action by the ACCC is a win for people and a reminder to businesses that they cannot get away with misleading consumers.
“It’s never OK to make a quick buck by misleading people and Mosaic Brands actions were particularly outrageous when people were doing their best to protect themselves from a deadly pandemic.”