Mosaic Brands cops $630,000 fine for false and misleading COVID claims

Following a CHOICE complaint lodged with the ACCC in March last year, the fashion retail group Mosaic Brands has had to pay $630,000 in fines issued by the regulator for promoting pandemic-related ‘Health Essential Products’ that would have offered little protection against COVID-19.

In total, the company was slapped with five ACCC infringement notices for alleged false or misleading representations about hand sanitisers and face masks.

Mosaic, whose brands include Noni B, Autograph, BeMe, Crossroads, Katies, Millers, Rivers, Rockmans and W.Lane, operates about 1210 stores nationally.

CHOICE called Mosaic out on a number of counts as the country went into COVID lockdown in 2020, including its panic marketing tactics and non-delivery of goods.

CHOICE testing funded by supporters 

We also commissioned testing on a bottle of hand sanitiser sold by Mosaic labelled 70% alcohol that turned out to have only 23%.

With the help of donations from hundreds of supporters, we then commissioned further testing of 29 hand sanitiser products. 

One of them, White Knight Hand Sanitiser 500ml, failed to meet the 60% threshold, though the product’s label said either 70% or 75% alcohol.

Throughout our ongoing hand sanitiser investigations last year, community tipoffs were crucial.

In November 2020, the government passed new hand sanitiser regulations that require consistent labelling that makes clear how much alcohol a hand sanitiser product contains.

ACCC testing finds more failures 

The ACCC conducted its own round of Mosaic Brands tests and found the following:

• A sample of Air Clean hand sanitiser sold on the NoniB website labelled 70% alcohol was found to contain 17% alcohol.
• A sample of Miaoyue hand sanitiser sold by Millers labelled 75% was found to contain 58% alcohol.
• Velcare-branded hand sanitiser advertised as ‘WHO-approved’ was not.
• KN95 Kids Safety Face Masks sold on its websites advertised as ‘CE/FDA certified’ were not.
• KN95 Adult Face Masks were advertised as “non-refundable” when consumers have a right to a refund under the Australian Consumer Law.

Misleading during the pandemic 

“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,” says ACCC deputy chair Delia Rickard.

“This action by the ACCC was only possible due to the work of the CHOICE community,” says CHOICE Campaigner Dean Price.

“CHOICE pushed for hand sanitiser regulations last year and the Australian Government implemented them,” Price says. “These new regulations will make it harder for companies to repeat the mistakes of Mosaic Brands.”

At the ACCC’s direction, Mosaic Brands has agreed to contact customers over the next three months who purchased any of the identified items and provide refunds. Mosaic has also committed to posting further information about how to apply for a refund on its websites.

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Andy

Andy Kollmorgen is the Investigations editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC), and at the Australian Financial Review. Andy is a former member of the NSW Fair Trading Advisory Council.  Andy has a Bachelor of Arts in English from New York University. Find Andy on Twitter and LinkedIn.

Andy Kollmorgen is the Investigations editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC), and at the Australian Financial Review. Andy is a former member of the NSW Fair Trading Advisory Council.  Andy has a Bachelor of Arts in English from New York University. Find Andy on Twitter and LinkedIn.