Penguin Australia’s involvement in the Belle Gibson saga should serve as a lesson for companies when it comes to fact-checking their own and other people’s claims, according to a senior lawyer.
On Friday, it was revealed book publisher Penguin will donate $30,000 to the Victorian Consumer Law Fund as part of an undertaking with the state’s consumer watchdog.
Penguin has also agreed to include warning notices in future books that make health claims and statements about so-called natural therapies.
The action comes after Penguin published Belle Gibson’s book The Whole Pantry, which claimed the author’s diet helped treat her terminal brain cancer.
The book also claimed part of its sales would be donated to charities and other organisations.
Consumer Affairs Victoria said in a statement it believes that by publishing The Whole Pantry, Penguin made false and misleading representations in breach of Australian Consumer Law.
Penguin withdrew the book from sale in March last year after Gibson failed to substantiate its claims.
The next month, Gibson admitted to Australian Women’s Weekly that she’d made up her cancer diagnoses.
“None of it is true,” she said.
Gibson and her company, Inkerman Road Nominees Pty Ltd, are also facing legal action from Consumer Affairs Victoria, and could face more than $1 million in penalties for profiting off her false claims, according to Fairfax.
Rohan Harris, partner at law firm Russell Kennedy, told SmartCompany businesses need to fact-check claims they are making on behalf of their own products and services, as well as other people’s.
“The bottom line is that any claims you make about your goods and services – or the goods and services of anyone else – must be substantiated before you make them, particularly in the area of health claims,” Harris says.
“If you read this undertaking, there’s a specific accusation that the readership of this sort of material was more susceptible to being misled because the readership included many people who themselves were suffering from illness.”
A spokesperson for Penguin Australia told SmartCompany the publisher is satisfied with the outcome.
“Penguin Australia has worked co-operatively and willingly with Consumer Affairs Victoria and has welcomed the opportunity to resolve this matter in a positive way,” the spokesperson said in a statement.