An online ugg boot trader has admitted to the competition watchdog that it made false claims that its ugg boots were made in Australia and used the Australian Made logo without authorisation.
Happiness Road Investment Group, which trades as Koala Jack, is a Queensland-based company which sells its products online.
During October last year the home page of the Koala Jack website prominently displayed the green and gold Australian Made logo and other statements that the ugg boots were made in Australia.
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Following an investigation by the Australian Competition and Consumer Commission, Happiness Road admitted its ugg boots were all made in China. The investigation also revealed that Happiness Road was not authorised to use the Australian Made logo.
Happiness Road has provided a court enforceable undertaking to the ACCC, which requires it to refrain from engaging in the same or similar conduct in the future, offer and pay refunds to consumers who were misled by its conduct and to publish an Adwords advertisement on Google which directs visitors to publications on the ACCC’s website regarding misleading claims and advertising.
The undertaking also requires Happiness Road’s sole director, Jason Rey, to undertake trade practices compliance training.
The undertaking follows a campaign by the ACCC with the Australian Made Campaign and the Australian Sheepskin Association to identify those traders who blatantly represent their footwear products as Australian made, when they are not.
“The ACCC considers country of origin claims to be a particularly valuable marketing tool for businesses, as many consumers place a premium on goods that are Australian made,” ACCC deputy chair Dr Michael Schaper said in a statement.
“This outcome serves as a timely reminder that the ACCC will not hesitate to take action against businesses which mislead consumers about the origin of the goods they are selling.”
Sally Scott, partner at law firm Hall & Wilcox, told SmartCompany she is not surprised the ACCC has taken action as ACCC chairman Rod Sims highlighted country of origin claims as a focus area for 2013.
“The company should feel fortunate to have avoided a fine,” Scott says.
“The ACCC ordinarily imposes fines if the conduct was blatant, intentional or reckless.”
Scott says it is a “sign of the times” that the ACCC imposed an undertaking requiring the company to take out an AdWords advertisement on Google directing visitors to ACCC pages on misleading advertising.
“Traditionally, newspapers would be used for any ACCC advertising requirements,” she says.
According to Scott, it is also interesting the AdWords requirement does not appear to relate to corrective advertising about what the company had done wrong, which would usually be expected. Instead the ACCC has used this part of the undertaking requirement as an educational tool.
“We know that Mr Sims is very focused on educating business and consumers rather than merely penalising,” she says.
SmartCompany was unable to locate Happiness Road or Jason Rey for comment.