Lorna Jane admits misleading COVID-19 ‘eliminate spread’ claims (paywalled)
Women’s sportswear retailer Lorna Jane has agreed to pay a $5m fine and admitted in court that incredible claims that its clothing could eliminate COVID-19 and prevent its spread were false and not backed by any scientific evidence.
Brisbane-based Lorna Jane Pty Ltd, founded by Lorna Jane Clarkson, is in the Federal Court this morning before Justice Darryl Rangiah where the Australian Competition and Consumer Commission has taken action alleging the company breached consumer laws in misleading shoppers.
Roger Traves QC, counsel for the ACCC, told the hearing in Brisbane this morning - heard via remote technology due to the COVID-19 pandemic - that the company had agreed to pay a $5m fine for misleading consumers in 32 representations across various platforms including two Instagram stories and in media releases.
Promotional slogans included “Cure for the Spread of COVID-19? Lorna Jane Thinks So”, “With Lorna Jane Shield on our garments it meant that we were completely eliminating the possibility of spreading any deadly viruses”, and “LJ Shield – Protecting you with anti-virus activewear”.
It wrongly claimed that viruses that come into contact with the activewear are eradicated, and that LJ Shield was a “cure” for the spread of COVID-19, Mr Travers told the court.
He said the conduct was “deliberate” in that the company launched a far reaching and wide-ranging marketing campaign without proper scientific evidence, but he does not allege the company knew its claims were false.
Justice Rangiah will decide the size of the fine to be paid after hearing evidence in court today, but the company and ACCC have agreed $5m would be appropriate.
The admission of liability by the company came at the eleventh hour, with the company due to face a five day court hearing which had been set down to start last Monday and the ACCC had been due to call evidence from a scientist from South Australia.
The ACCC’s case against the company’s founder and public face, Ms Clarkson, personally has been dropped however the company admits that she authorised and personally made some of the untrue statements about virus elimination and stopping the spread, and that she was involved in crafting some of the wording of the false marketing.
Mr Traves told the court that the company had agreed it broke consumer law in July last year when it made false claims that its activewear containing LJ Shield would protect wearers against and stop the spread of and eliminate viruses including COVID-19.
The claims were made a few months after the World Health Organisation declared the virus to be a pandemic when there were over 8000 cases and 104 fatalities.
Queensland-based activewear company Lorna Jane’s marketing material
Mr Traves told the court that the company had broken the law so many times that it could not be quantified, because each contravention is each time a consumer is misled.
The company has admitted that when it launched the marketing campaign it had no concluded test results from any scientific testing and the company had not hired anyone to do testing on their clothes ability to stop the spread of viruses.
However the company does not admit they knew what they said was untrue at the time they made the statements, but now conceded the statements were made without proper scientific basis.
The $5m fine equates to gross profit for the company for two weeks, Mr Traves said.
The company posted gross revenue last financial year of $15.7m per month and gross profit of $10.6m a month.
It sells its clothing both in Australia and overseas.
The hearing is continuing today.
www.theage.com.au
