The Australian Competition and Consumer Commission has fined an essential oils company $10,800 for potentially misleading consumers and experts say the ruling is a reminder for businesses to get the detail right on packaging.
Felton Grimwade & Bosisto’s Pty Ltd (Bosisto’s), which is the supplier of Bosisto’s Tea Tree Oil, paid the penalty after the ACCC issued an infringement notice because of a “reasonable belief” that the company’s claims of a tea tree oil product being “100% pure” were false.
Bosisto’s sells essential oils into pharmacies across Australia, as well as cold and flu remedies and cleaning products online. The company told SmartCompany in a statement it “stand[s] by our product and dispute[s] the allegations in the infringement notice.”
“The ACCC’s investigation and findings are based on a test method which is yet to be independently verified,” the company said, while declining to comment further.
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Ursula Hogben, principal and general counsel at LegalVision, told SmartCompany small operators need to understand Australian Consumer Law does not require that harm is done to customers for the ACCC to issue infringement notices on misleading claims. All that is needed is the reasonable belief that the customer is being misled by claims on advertising or packaging.
“With products, you have to look at what you’re saying and also what you’re leaving out,” Hogben says.
“Claims that you make have to be true and accurate – you see problems with this when it comes to words like ‘unlimited downloads’. There might be a case of unlimited internet, for instance, but it might also be much slower after a certain amount,” she says.
However, there is a provision in the law for ridiculous exaggeration of claims – “think, claiming ‘the number one, the best’ products”, says Hogben. These are the types of claims that consumers can distinguish as being enthusiastic branding, rather than a claim about the ingredients or benefits about a particular product.
“The take-away really is go outlandish, or go 100% accurate on the claims you make,” she says.
Narissa Corrigan, principal at Ampersand Legal, says it’s surprising so many businesses still get caught out on misleading claims.
“I don’t think it’s hard to get this right,” she told SmartCompany.
“It always astounds me when people get in trouble for this.”
Australian Consumer Law simply requires businesses don’t say anything that isn’t true – so any unknowns should not be referred to on the packaging.
“If the company is just guessing about the truth of something, don’t make the claim,” Corrigan says.
Bosisto’s has paid the fine in the infringement notice but says this is not an admission of a breach of consumer law.
“We have elected to comply with the ACCC in this matter, not withstanding we dispute the allegation,” the company said.