By Mark Armstrong, Senior Associate

The ACCC has sent a strong message to online retailers, kicking a discount fashion conglomerate while they were on the way down. Mosaic Brands Limited has been ordered by the Federal Court to pay an eye-watering $25.05 million in penalties for breaches of the Australian Consumer Law (ACL) (entrenched within the Competition and Consumer Act 2010 (Cth)), after the ACCC took them to task over some major failings. Mosaic Brands, currently in liquidation, were found to have wrongfully accepted payment from consumers and engaged in misleading and deceptive conduct, specifically, for failing to dispatch and deliver items within the delivery timelines specified by their own businesses, in an ongoing and monumental fashion. Timely delivery obligations are rarely enforced, as in most cases compliance is in the company’s best interest.

Since Mosaic Brands is in the process of being liquidated the likelihood of the penalties being paid before their other creditors (reported by ABC News to amount to $249 million owed[1]) is questionable. However, what is less ambiguous is the precedent that the ACCC and the Federal Court have set for serious breaches of the ACL including those related to wrongly accepting payment and failure to adhere to delivery timelines represented online.

What happened?

The Mosaic Brands house of brands comprised nine brands including Noni B, Katies, Rockmans, Millers, Crossroads, Autograph, Beme, W.Lane and perpetual discount icon, Rivers. For a period of six months, a staggering 739,114 Mosaic Brands products (across all nine brands) were not delivered within the relevant store’s specified delivery times, and 4,213 items were not received by customers at all. While some Mosaic Brands websites have since been shuttered, as of 3 September 2025, the Noni B website is still live (although no longer displays any products available for purchase) and states, ‘Orders within Australia will be delivered within 5-10 business days from the day you place your order’, and includes a note on the ‘Shipping & Delivery page’ stating that delivery may take longer in remote or rural areas, during promotion and sale periods or due to natural events.

Despite the above claims and disclaimers, an ACCC investigation uncovered that over the half-year period “…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.” Further, the figure above comprised almost a quarter of all online items purchased and shipped by Mosaic Brands during the same timeframe. Accordingly, the Federal Court found that Mosaic Brands wrongfully accepted payment and engaged in misleading and deceptive conduct. How exactly Mosaic Brands’ delivery timelines got so out of hand is not clear: it is possible that Mosaic Brands’ operation was so backed up and out of control as the company spiralled into financial strife that it could not turn around orders on time; or, it is possible that Mosaic Brands were taking orders for items they did not have in stock, then sourcing them and delivering them later to reduce inventory holding costs.

However, the failure to deliver on time does not encompass the full extent of Mosaic Brands’ shortcomings. Mosaic Brands was found to not have reasonable grounds to justify its delivery windows as a result of its warehouse and logistics processes defects.

Separately, Mosaic Brands was also found over a 13-month period to have misrepresented on eight brand websites that customers could only receive a refund for a faulty product if the fault was brought forward by the customer within six months of the purchase date, which is contrary to the consumer guarantee rights in the ACL – indeed, the ACL does not specify a time limit for which the statutory right to a refund for a faulty product applies, as the right will apply for a “reasonable time” in light of surrounding circumstances including the nature and price of the product, and manufacturers are not allowed to stipulate a timeframe. The most recent decision is also on top of the $630,000 and $266,400 penalties Mosaic Brands were slapped with in 2021 and 2022 for misrepresentations and false endorsements related to pandemic-related products. Evidently, a few prior brushes with the ACCC were not enough to scare Mosaic Brands straight and tighten up their consumer law-related practices, and the ACCC tripled down.

What if a brand is facing genuine issues?

It is almost inevitable that unforeseeable events and other issues will pop up while operating an e-commerce business and not everything can be adequately covered off in the fine print of your website terms. However, when such matters do arise, businesses should be taking a proactive and transparent approach. Not only is it common (and prudent) practice to keep customers informed if they are likely to be affected by any legitimate issues faced by a business, it can also go a long way in maintaining the trust of your customers. For example, if a brand is facing supply chain issues or may experience difficulties meeting delivery deadlines due to peak periods including Christmas and sale periods (Black Friday, EOFY, etc), customers should be clearly notified so they can make informed purchasing decisions. This could be done by way of a banner at the top of a website or a prominent notice on the checkout page, which sets out the issue and that customers should expect a slight delay in receiving their items. Furthermore, a one-off blowout of delivery times due to some extraneous event, force majeure, or simple underestimation is not going to be punishable by a fine of this magnitude – but when the issues persist for many months and are not corrected, regulators view such failures very dimly.

As noted by the ACCC’s Deputy Chair Catriona Lowe, “Delivery times matter and it is unacceptable to mislead consumers about this aspect of a sale”. Customers must be able to adequately ascertain if their purchase will meet their needs (including delivery timeframes – ‘If I buy this it will be here before Mum’s birthday’ etc) before they hand over their hard-earned cash. Therefore, you must ensure that you are able to fulfil orders in a reasonable and efficient manner and in any case, in line with any claims on your website.

What does this mean for you?

This is the first case of this magnitude to specifically focus on a company consistently failing to deliver within their stated delivery times, although Mosaic Brands’ non-compliance was on a particularly enormous scale. However, noting that the ACCC was successful in their action this time means that they may not shy away from launching proceedings from other entities for similar failures.

As noted above, one of the issues of Mosaic Brands’ conduct was that they did not have reasonable grounds to justify their delivery times. As with any marketing claim a business makes, you must have a reasonable basis for making that claim. This means that it would be prudent to monitor your current order and delivery processes, and ensure that any claims regarding timeliness of delivery are accurate and reasonably capable of being fulfilled.

[1] ‘Rivers was one of Australia’s first online retailers. How did it fail?’ by Hannah Murphy, ABC, accessed via https://www.abc.net.au/news/2025-01-23/rivers-outlets-to-close/104852380.

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