Australian retailer Oscar Whylee, a company, mounted an extensive advertising campaign in which it said that for every pair of spectacles it sold, it would donate another pair to someone in need. The success of the "Buy One, Give One" campaign has not been measured but during the four years that the campaign ran in social media, emails and on its website plus signs in its shops, the company sold 328,010 pairs of spectacles.

But what it gave to charity was very different. First, it donated only frames, not pairs of glasses. Secondly, it delivered only 3,181 frames.

The claims were outrageous:
‘For every pair purchased, a pair is donated to someone in need’,
‘One for one. All the time. Forever. We donate a pair of glasses to those
in need for every pair purchased’; and
‘Buy a pair, give a pair’.

The Australian Consumer and Competition Commission brought proceedings against Osca Wylee and the company has been ordered to pay AUD3.5 million in penalties.

The company created a false impression of a company deep into caring for the disadvantaged. In 2014, it donated AUD2,000 and 100 spectacles frames to charity Rose Charities. Over the same period as its "Buy One, Give One" campaign, it promoted "We have partnered with Rose Charities which helps build sustainable eye care programs in Cambodia’; and
‘We’re funding Lim studying to be an eye surgeon so he can keep taking solutions into his own hands’.

Of course, the term "partnered" has become a meaningless buzzword but even meaningless words carry weight. All the time that publicity was in use, no further donations were made.

The judgment of Justice Katzmann is fascinating:

“Oscar Wylee stood to profit from inducing consumers to purchase its products and still does. It built its reputation by engaging in the contravening conduct, appealing to socially-conscious consumers who wanted to support charitable causes through their purchasing behaviour. Its conduct was a betrayal of that promise.”

The ACCC has added detail: "In about 2013, the company also published a promotional video on its website and social media under the ‘I care for eyecare’ slogan, which claimed that ‘Oscar Wylee helps out through a range of different ways. From the performance of eye tests, distribution of glasses, performance of cataracts surgeries, and training of eye doctors’. The video showed scenes of poverty in Cambodia, Rose Charities’ eye clinic in Cambodia, and stated ‘Every Oscar Wylee glasses purchase will help restore vision in developing regions’.

“Oscar Wylee has taken advantage of the charitable nature and goodwill of consumers and its behaviour risks diminishing consumer confidence to support other businesses that genuinely engage in philanthropic activities."

This is not the case of a long-established company trying to find ways to fight off competition from a new rival. Oscar Wylee was the new rival. Oscar Wylee, an Australian optometry and eyewear retailer, commenced operations in 2012, initially operating solely as an online retailer,
marketing to consumers through its website, social media platforms, including Facebook and Instagram, and by email newsletters. In 2015, Oscar Wylee opened its first bricks and mortar retail stores, which now number over 60, according to ACCC.

So, why is this case interesting?

It's because it shows what we might consider a systemic intention to mislead - and that's the essence of dishonesty and that's the essence of fraud and other financial crime offences.

Of course, a company does not have a conscience, it cannot form intent which is why companies are subject to "penalties" and individuals are prosecuted and jailed. But companies do not operate in a vacuum: they have guiding hands and in this case those guiding hands ran a false campaign for profit.

In criminal law a "false or misleading statement knowingly made with the intent of obtaining pecuniary advantage" is a classic definition of fraud.

So, while a company does not have a character because it does not have a personality, those who run it do and, as we know, vehicles for fraud come in many forms and sizes.

That raises two more questions: if the information that is now revealed by ACCC had come to the attention of the company's bank (which bank it was does not matter for this purpose), should the bank have lodged a suspicious transaction report in relation to the company's income?

The second question is if it did not come to the attention of the bank, why did it not? The answer to that is that no one was auditing performance against the advertising, neither internal audit (if there is any) nor external audit. How do auditors not notice a 90% failure rate as against publicly made commitments?

So perhaps that raises a third question: how much should banks, etc. rely on audits when considering whether their customers are involved in some dubious or even criminal conduct?

“This penalty should serve as a reminder for any company considering making
false claims to its customers in its marketing material, whether online, by
email, on video, on social media or in store.”