HomeBusinessACCC Takes Legal Action Against Magnamail for Misleading Prize Promotions

ACCC Takes Legal Action Against Magnamail for Misleading Prize Promotions

Misleading Promotions Allegedly Targeted Vulnerable Consumers

The Australian Competition and Consumer Commission (ACCC) has filed a lawsuit against Magnamail in Federal Court, alleging that the company falsely advertised prize eligibility in its mail order catalogues. Magnamail’s parent company, Direct Group, is also implicated for allegedly enabling these deceptive practices.

Between May 2022 and July 2023, Magnamail reportedly sent promotional materials to hundreds of thousands of consumers, including attention-grabbing letters, catalogues, and scratch cards, claiming that purchasing products would make them eligible for prizes worth up to $25,000 or high-value items like iPads and jewelry.

According to the ACCC, the prizes had already been awarded to a small group of pre-selected winners, meaning that most consumers never had a genuine chance at winning.

Many of these promotions contained phrases such as “YOU HAVE DEFINITELY WON,” and suggested urgency, encouraging consumers to act quickly or risk missing out. ACCC Chair Gina Cass-Gottlieb stated that this conduct misled many individuals, especially those who were elderly or vulnerable, into purchasing products under false assumptions. Some consumers even felt distressed after realizing they were not actually eligible to win major prizes.

The ACCC also claims that the scratch cards distributed by Magnamail were identical for all recipients, with a “lucky number” that gave a false impression of higher winning odds. Additionally, the organization asserts that Direct Group, a significant player in Australia’s direct-to-consumer market, knowingly supported Magnamail’s misleading strategies.

In response, the ACCC is seeking penalties, injunctions, and other legal measures to prevent similar conduct. This lawsuit highlights the ACCC’s commitment to holding companies accountable for misleading consumers, especially vulnerable individuals, about prize eligibility.

Source accc.gov.au

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