Australian eyewear retailer Oscar Wylee has been ordered to pay $3.5 million in penalties for misleading or deceptive conduct and making false or misleading representations about its charitable donations and affiliations.
The ruling was handed down in the Federal Court on Friday 18 September after the company, which operates more than 60 stores across the country, was found in breach of Australia Consumer Law following prosecution by the Australian Competition and Consumer Commission (ACCC).
Oscar Wylee admitted that between January 2014 and December 2018 it made statements in its social media posts, emails, website, and promotional merchandise that for each pair of glasses a consumer purchased, it donated another pair of glasses to someone in need, when it did not do so.
According to the ACCC, in almost five years, Oscar Wylee sold 328,010 pairs of glasses but donated only 3,181 frames to charity, without lenses, which is about one set of frames for each 100 pairs of glasses sold.
“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,” ACCC deputy chair Ms Delia Rickard said.
“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.”
The company also admitted making false or misleading representations to consumers between January 2014 and December 2018 that it was closely affiliated with the charitable organisation, Rose Charities.
Its association with the charity during this period consisted of a single donation of $2,000 and 100 frames in 2014. No further donations or support were provided after this time, despite Oscar Wylee claiming an affiliation until late 2018.
In about 2013, the company also published a promotional video, which claimed it supported the performance of eye tests, distribution of glasses, cataracts surgeries and training of 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”.
In her judgment, Justice Katzmann said 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 addition to imposing 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.
Oscar Wylee – full statement
“The Federal Court of Australia has made orders that Oscar Wylee Pty Ltd (Oscar Wylee) pay $3.5 million in penalties, and further corrective and deterrent orders, for engaging in conduct in breach of the Australian Consumer Law (ACL).
The matter was the subject of court proceedings filed against Oscar Wylee by the Australian Competition and Consumer Commission (ACCC) regarding two charitable donation campaigns, a ‘Pair for a Pair’ and ‘Affiliation with Rose Charities’ that ran from January 2014 to December 2018.
The orders were made after the Federal Court approved a settlement agreed between the ACCC and Oscar Wylee. The court found that Oscar Wylee engaged in misleading or deceptive conduct, made false or misleading representations and/or engaged in conduct liable to mislead the public in contravention of sections 18, 29(1)(h) and 33 of the ACL.
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 ACL.”