The Australian Competition and Consumer Commission (ACCC) was successful in having the Court[1] fine a company $3.5M for misleading consumers about donations to charity and affiliation with a charity.

Oscar Wylee Pty Ltd (Oscar Wylee) made statements between 2014 and 2018 that for each pair of glasses a customer purchased from Oscar Wylee it donated another pair of glasses to someone in need. They also stated that it made such donations at or around the time of purchase.  Oscar Wylee sold 328,010 pairs of glasses, but donated only 3,181 pairs of glasses.  Further, Oscar Wylee represented that it was closely affiliated with Rose Charities.  However, its charitable association with Rose Charities throughout the period was confined to one donation totalling $2,000 and 100 glasses frames made in 2014.

Consequently, the ACCC contended that Oscar Wylee had, in trade or commerce:

  • engaged in misleading or deceptive conduct, in contravention of s 18 of the Australian Consumer Law (ACL); and
  • engaged in conduct that was liable to mislead the public as to the quantity of goods, namely one pair for the customer and one pair to be donated, in contravention of s 33 of the ACL.

Oscar Wylee admitted the contraventions. Apart from the fine the Court ordered corrective advertising by Oscar Wylee on its website, its Facebook page and its Instagram page, a 3 year compliance program and payment of the ACCC’s costs of $30,000.

Lessons

This action was taken against a commercial company by the ACCC. Charities should be aware that provision of support to the community through fee-for-service arrangements may be under the scrutiny of the ACCC and subject to consumer law regulation.

External communications with the public should be vetted for exposure to breach of the consumer laws, particularly if the charity is engaged in false, misleading or deceptive conduct. This would include flyers, brochures, websites and social media posts.

It is also prudent to include fundraising communications as well in this scrutiny, particularly donor assurances that 100% of donations will be expended in a certain project or the level of a charity’s administrative costs or overheads.

[1] The Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd [2020] FCA 1340