Lorna Jane was fined $5 million by a federal court and labeled “predatory and exploitative” after the popular sportswear brand mistakenly claimed that her clothes could eradicate Covid-19 and stop its spread.
During the deadly virus outbreak, the company claimed that its anti-virus active clothing was sprayed with a substance called “LJ Shield” that protects people against pathogens.
Advertisements on the brand’s website, stores, and Instagram include “The Cure for the Spread of Covid-19? Lorna Jane Thinks So”.
The Australian Competition and Consumer Commission (ACCC) has filed a lawsuit against Lorna Jane for allegedly making false and misleading claims.
In a ruling in federal court on Friday, Judge Darryl Rangiah said Lorna Jane was trying to “use the fear and anxiety” surrounding the deadly outbreak.
“The ad campaign was launched in July 2020 at a time when there was significant uncertainty, fear and anxiety among the public about the consequences and spread of Covid-19,” he said.
“Lorna Jane sought to exploit this fear and anxiety of the public by using misleading, deceptive and unrealistic representations about the features of LJ Shield sportswear.
“Lorna Jane sought to capitalize on public concerns and fear in a way that included illegal conduct in violation of the relevant provisions of the 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 behavior and show that “such exploitative behavior will not pay”.
He found that the company did not appear to actually profit from its behavior and said that the $5 million fine accepted by both parties on the eve of the trial was appropriate.
He also ordered Lorna Jane to pay the ACCC’s $370,000 in expenses and put a “corrective notice” on LJ Shield’s false claims on her website, social media, customer emails, and stores.
ACCC chairman Rod Sims said the $5 million fine “highlights the seriousness of Lorna Jane’s behavior”.
“Lorna Jane has misrepresented LJ Shield Activewear as providing protection against or eliminating COVID-19 among 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 last year, Lorna Jane was fined almost $40,000 from the Therapeutic Products Administration for not getting proper approval for ads.
No lawsuits were filed against company director Lorna Jane Clarkson for “knowingly involved” in the conduct.
The company apologized to customers, blaming suppliers for the mistake.
“A trusted supplier has sold us a product that is not performing as promised,” CEO Bill Clarkson said in a statement.
“They have led us to believe that the technology behind the LJ Shield has been sold elsewhere in Australia, the USA, China and Taiwan and is both antibacterial and antiviral.
“We believed we were providing a benefit to our customers.”
Lorna Jane has 108 stores in Australia and also several overseas stores, including the USA and New Zealand.