The Federal Court has dismissed the ACCC’s proceedings against Magnamail Pty Ltd after finding that it did not make false or misleading representations to consumers in its mail order catalogue promotions.
Between May 2022 and July 2023, Magnamail sent promotional materials such as letters, envelopes, catalogues and scratch cards to hundreds of thousands of consumers in connection with 12 ‘pre-draw’ prize promotions.
The ACCC alleged that in this promotional material, Magnamail represented to consumers that if they placed an order for items from its mail order catalogue, they had a right to claim, were eligible for, or had qualified for major prizes, including cash up to $25,000; when the draws for those prizes had occurred before consumers received the promotional materials such that only a small number of pre-drawn consumers could claim a major prize.
The Court has found the promotional material did not make the alleged false and misleading representations.
The Court also dismissed the ACCC’s case against Magnamail’s parent company, Direct Group Pty Ltd. The ACCC alleged Direct Group was knowingly involved in Magnamail’s conduct.
The ACCC is carefully considering the Court’s judgment.
Background
Magnamail Pty Ltd is a direct mail order catalogue business that operated in Australia and New Zealand. Magnamail sold a range of merchandise through catalogues distributed to the public. Magnamail’s catalogues generally included a promotion that consumers could participate in if they made a purchase from the catalogue.
Magnamail stopped running pre-draw promotions in 2023, after becoming aware of the ACCC’s investigation.
In November 2024, the ACCC instituted proceedings in the Federal Court against Magnamail for allegedly making false or misleading statements in relation to pre-draw promotions, and its parent company Direct Group for allegedly being knowingly involved in this conduct, as a result of its investigation into consumer complaints.
Magnamail is owned by Direct Group Pty Ltd. Direct Group is a direct-to-consumer retailer through a range of brands or publications such as Reader’s Digest, Over Sixty, Infashion, House of Pets, and TVSN (Television Shopping Network), a shopping network channel that broadcasts on free-to-air TV and subscription services such as Foxtel.
