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Lorna Jane was fined $ 5 million and labeled “predatory and exploitative” by federal court after the popular sportswear brand falsely claimed her clothing could eliminate Covid-19 and prevent its spread.
During the deadly virus outbreak, the company claimed that its anti-virus sportswear was sprayed with a substance called “LJ Shield,” which protected people from pathogens.
Ads on the brand’s website, stores and Instagram used the tag “Cure for the Spread of Covid-19? Lorna Jane thinks so ”.
The Australian Competition and Consumer Commission (ACCC) has taken legal action against Lorna Jane for allegedly making false and misleading claims.
In a Federal Court ruling on Friday, Judge Darryl Rangiah said Lorna Jane sought to “exploit the fear and concern” surrounding the deadly outbreak.
“The ad campaign was carried out in July 2020, at a time of considerable uncertainty, fear and concern among the public regarding the consequences and spread of Covid-19,” he said.
“Lorna Jane has sought to exploit this fear and public concern by using misleading and false representations about the properties of LJ Shield sportswear.
“Lorna Jane has sought to take advantage of the fear of public concern in a manner that involves unlawful conduct in violation of the relevant provisions of Australian Consumer Law.
“Lorna Jane’s behavior can only be described as exploitative, predatory and potentially dangerous.”
Rangiah said the court must impose a substantial penalty to reflect the seriousness of the conduct and demonstrate that “such exploitative conduct will not pay.”
He concluded that the company had not actually benefited from his conduct and said the $ 5 million fine agreed to by both parties on the eve of the hearing was appropriate.
He also ordered Lorna Jane to pay ACCC’s $ 370,000 costs and post a “corrective notice” on its website, social media, customer emails and in stores about the false allegations of LJ Shield.
ACCC President Rod Sims said the $ 5 million penalty “highlights the seriousness of Lorna Jane’s conduct.”
“Lorna Jane has falsely promoted her LJ Shield sportswear as eliminating or providing protection against COVID amid the growing number of Covid-19 cases in Australia,” he said.
“The whole marketing campaign was based on consumers’ desire for greater protection against the global pandemic. “
In July of last year, Lorna Jane was fined nearly $ 40,000 from the Therapeutic Goods Administration for failing to seek proper approval of the ads.
The action against company director Lorna Jane Clarkson for being “knowingly concerned” with the conduct has not taken place.
The company apologized to customers, blaming suppliers for the mistake.
“A trusted supplier sold us a product that didn’t perform as promised,” CEO Bill Clarkson said in a statement.
“They made us believe that the technology behind LJ Shield was sold elsewhere in Australia, the United States, China and Taiwan and was both antibacterial and antiviral.
“We believed we were passing a benefit on to our customers. “
Lorna Jane has 108 stores in Australia, plus several overseas, including the United States and New Zealand.
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