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The parent company of fashion retailers Autograph and Katies has paid $266,400 in penalties after the Australian consumer watchdog issued infringement notices relating to false or misleading representations made by Mosiac Brands (ASX: MOZ).
The fines relate to Mosaic promoting a KN95 face mask on its Autograph website as “FDA AND CE APPROVED” in August 2021 - amid public concern about COVID-19, and a McGloin’s-branded hot water bottle for sale on the Katies website as ‘ACCC Approved’.
In both instances, the Australian Competition and Consumer Commission (ACCC) alleged neither of these claims were true as the Food and Drug Administration (US) and Conformitè Europëenne (EU) had not approved the mask, and the ACCC does not endorse or approve any products at all.
“We were very concerned about the type of representations being made by Mosaic Brands,” ACCC commissioner Liza Carver said.
“Making false representations about the approval or endorsement of a product by any government authority misleads consumers and is likely to erode public trust in government authorities and certification marks.
“These penalties are a warning to all businesses that making false or misleading representations about government approval for their products can lead to ACCC enforcement action, with serious consequences including penalties.”
According to the ACCC, no customer orders were made via Mosaic Brands’ websites for either of these products. In addition to Katies and Autograph, Mosaic sells products via online and bricks & mortar channels through brand such as Noni B, Crossroads, Millers, Rivers, Rockmans, and W.Lane.
The latest development is not the first time Mosaic has landed in hot water over spurious advertising claims.
In May 2021, Mosaic Brands paid $630,000 in fines after it admitted to making false or misleading claims about hand sanitiser and face mask products on its brand websites during the COVID-19 pandemic.
This followed on from the ACCC issuing five infringement notices in respect of those admitted false representations. At the time, Mosaic entered into a three-year, court-enforceable undertaking which included committing to a refund scheme and implementation of a consumer law compliance program.
Shares in MOZ are stable today as of 10.54am AEST.
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