Lorna Jane fined $5 million for misleading COVID-19 marketing campaign

After misleading the public through their ‘antivirus activewear’ promotion, Lorna Jane has been ordered to pay $5million dollars by the Federal Court. Their “LJ Shield Activewear” was found by the Court to deceive the public into believing that its activewear “stopped the spread” against viruses “including COVID-19”.

Background

In July 2020, Lorna Jane claimed through its advertising campaign that their activewear line was sprayed with an ‘LJ Shield’ which protected from highly contagious diseases. The slogan “Cure for The Spread of COVID-19? Lorna Jane Thinks So”, appeared in-store, via various online platforms as well media releases.

Initial concerns surrounding the brands campaign were raised by the Therapeutic Good Administration, which fined Lorna Jane with three Infringement Notices worth almost $40,000. In response to this, Lorna Jane stated that their claims were backed by scientific verification and were not attempting to exploit customers through their advertising campaign.

In December 2020 the Australian Competition and Consumer Commission (ACCC) took Lorna Jane to court alleging the brand made false and misleading claims and the brand owner was aware and involved in the conduct. Lorna Jane business representatives in court admitted that there was no scientific verification that the LJ Shield protected against viruses including COVID-19.

ACCC Chair Rod Sims described such conduct as “particularly harmful” as “consumers cannot easily check or monitor the claims made.”

With such claims occurring at a time of grave uncertainty and fear surrounding the global pandemic, Lorna Jane’s false and misleading representations were described by the Federal Court judge as “predatory and exploitative”.

The Court also found that the false representation of having scientific basis for such claims were approved by Lorna Jane’s director and Chief Officer, Ms Lorna Jane Clarkson, who was an active participant in the construction of the deceitful marketing campaign. She was found to be involved with developing the wording and imagery for the campaign, as well as making personal statements in both media releases and an Instagram story.

Outcome

“The $5million in penalties imposed by the Court highlights the seriousness of Lorna Jane’s conduct”, Sims said.

The Court also ordered that the activewear brand be prohibited for a three-year period, from making “antivirus claims” unless statements are backed and verified by scientific or technological evidence. Lorna Jane is required to issue public corrective notices across all marketing campaign platforms, establish a consumer law compliance program and pay the ACCC’s costs.

Substantial penalties such as those opposed on Lorna Jane ensure that consumers are protected by false and misleading misrepresentation by large brands, which have the potential to profiteer from customers fear during a global health crisis.

Recent developments

Following the Federal Court’s ruling, Lorna Jane released a media statement on their website acknowledging that some representations made about the LJ shield in their marketing campaign were misleading. The company in their statement states that throughout the process they have cooperated with the ACCC as well as complying with its court order obligations.

Since the dispute Lorna Jane Pty Ltd has reviewed and modified the production and marketing areas of the company which now entail new managerial roles. To ensure a similar issue does not arise in the future, improvements have been made to the product testing regime which now involves improved supplier testing, in-house product testing as well as independent certification before purchase or use by Lorna Jane.

What this means for businesses

Substantial penalties such as those opposed on Lorna Jane Pty Ltd ensure that consumers are protected by false and misleading misrepresentation by large brands, which have the potential to profiteer from customers fear during a global health crisis.

It also serves as an important reminder to businesses to stringently comply with the ACL, as brands who knowingly engage in misleading and deceptive conduct will be brought to account for their actions with considerable penalties. Much like Lorna Jane, businesses should consider improving their supply testing regime to involve in-house product testing as product information provided by suppliers may not always be accurate.

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