Former fashion retailer Mosaic Brands Limited will have to pay $25.05 million in penalties for consumer law breaches that included accepting payment but failing to deliver items to consumers within a reasonable time.
This is according to the ACCC, which had commenced law proceedings against Mosaic Brands – the company that owned Noni B, Rivers, Katies, Rockmans, Millers, Autograph, Beme, Crossroads and W. Lane.
The Federal Court of Australia found that Mosaic Brands breached the Australian Consumer Law over a 6-month period when it failed to deliver 739,114 items across its nine brands within the delivery times specified on its websites, or a reasonable time. Of these items, 4,213 were not delivered at all.
In doing so, the ACCC noted that Mosaic Brands was found to have wrongfully accepted payment from consumers and engaged in misleading or deceptive conduct.
“Delivery times matter, and it is unacceptable to mislead consumers about this aspect of a sale,” ACCC deputy chair Catriona Lowe said. “A large number of Australians – and close to a quarter of online goods ordered from the Mosaic Group were affected by it.
“Our investigation revealed that more than half of the items in question were dispatched from Mosaic Brands’ warehouses 30 or more days after the order date, and about one-third were dispatched 40 or more days after the order date.”
“One person who reported to us experienced the dual disappointment of never receiving the goods they’d paid for and then having to wait six months for a refund,” Ms Lowe said.
The almost 740,000 goods that the court found Mosaic Brands wrongfully accepted payment for made up almost one-quarter of the total online items ordered and dispatched by Mosaic Brands during the six-month period.
In addition, Mosaic Brands did not have reasonable grounds for making delivery time representations on its websites due to Mosaic’s deficient and defective warehousing and logistics systems and operations.
The court also found that Mosaic Brands breached the Australian Consumer Law when, in a 13-month period between 2021 and 2022, it stated on eight of its brands’ websites that consumers were only eligible for a refund for a faulty item if they sought the refund within six months of the purchase date.
Under the Australian Consumer Law, a consumer’s right to a refund for a faulty item does not have a set time limit: it applies for a “reasonable time”, which depends on factors such as the price and quality of the item.
“All online retailers should be aware that excessive delivery delays after accepting payment can lead to penalties of this magnitude,” Lowe said.