Glasses chain Oscar Wylee has been fined $3.5 million by the Federal Court, for misleading consumers about the extent of its charitable activities.

Between 2014 and 2018, the company falsely claimed that for every pair of glasses bought by customers, it donated another pair of glasses to someone in need.

Those false marketing claims featured prominently on its website, social media posts, emails, and promotional materials.

Oscar Wylee, which has 60 stores and operates online, admitted that it sold 328,010 pairs of glasses, but only donated 3,181 frames to charity without lenses.

Essentially, the eyewear business donated just one set of frames for every 100 pairs it sold — which falls well short of its promise: "Buy a pair, give a pair".

The case was brought by the Australian Competition and Consumer Commission (ACCC), which accused the company of exploiting the "goodwill" and "charitable nature" of customers.

The company admitted liability and made joint submissions with the ACCC about the appropriate penalty in this case.

"Oscar Wylee promoted its charitable activities as a core reason why consumers should buy Oscar Wylee glasses," ACCC deputy chair Delia Rickard said.

"But its claims were false and were made in circumstances where consumers could not easily verify these claims for themselves.

"The misleading conduct also portrayed Oscar Wylee as a socially-conscious company that made significant donations of glasses to people in need, which, because this was not true, unfairly differentiated it from other brands in the market.

'Betrayal' of socially conscious customers

The court also heard that Oscar Wylee had grossly exaggerated its involvement of its philanthropic activities with certain charities.

For example, the company made the following claims in its marketing materials:

"We have partnered with Rose Charities which helps build sustainable eye care programs in Cambodia." 

"We're funding Lim studying to be an eye surgeon so he can keep taking solutions into his own hands."

However, Oscar Wylee only made a single donation of $2,000 and 100 frames to Rose Charities in 2014.

It did not make any further donations afterwards. But Oscar Wylee continued to claim, over the next four years, that it provided continuing support to this charity.

The Federal Court also had harsh words for the company.

"Oscar Wylee stood to profit from inducing consumers to purchase its products and still does," Justice Anna Katzmann said in her judgment.

"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.

In a statement, Oscar Wylee said it "acknowledges the importance of the issues raised by the ACCC and sincerely regrets the contraventions of the ACL [Australian Consumer Law]".

"We have also adopted a strict Trade Practices Compliance Policy, directed to the protection of consumers, and appointed a Compliance Officer responsible for its implementation."

The company also said it had "donated 336,585 pairs of glasses frames" and "$80,000 cash donations to charities supporting eyecare for the disadvantaged".

Its numbers were very different to what the ACCC alleged in court — that Oscar Wylee sold 328,010 pairs of glasses, but only donated 1 per cent of that to charity.