Belle Gibson, Italian cakes and designer glasses: The complexity of making charitable claims February 18, 2025

How to promote a business donation without misleading consumers

The 2025 release of Apple Cider Vinegar, based on the real-life story of Belle Gibson, is a timely reminder for Australian businesses to check (and double check) their charitable claims. In 2017, Ms Gibson was found in breach of the Australian Consumer Law (ACL) by making numerous false claims, including that a portion of sales from her app and book would be donated to charities. In light of Ms Gibson’s case, as well as several recent high-profile examples, businesses should apply careful consideration before promoting their charitable donations or affiliations. 

What were Belle Gibson’s claims?

During Instagram’s infancy, Anabelle Natalie Gibson built an online following as a health and wellness guru, and later developed a recipe app and book, sold under the name of ‘The Whole Pantry’. Following a series of publications in 2015, the Director of Consumer Affairs Victoria commenced proceedings against Ms Gibson and her company in relation to false claims that she:

• was diagnosed with brain cancer;
• rejected conventional cancer treatments and was seeking to heal herself naturally; and 
• was donating part of the proceeds of sales of her app and book to various charities.

Ms Gibson was found to have misled or deceived consumers, in breach of the ACL. Further, Ms Gibson was held to have engaged in unconscionable conduct by representing that she would make donations to a number of charitable organisations and failing to follow through on multiple occasions. The Court noted there was a clear marketing element in these representations, and that she deliberately took advantage of the empathy of the Australian community in promoting her business. Ms Gibson was ordered to pay pecuniary penalties of $410,000 and $30,000 in costs.

How are charitable marketing claims regulated?

In addition to complex State and Territory fundraising laws, charitable marketing claims are primarily regulated under the ACL, which prohibits misleading or deceptive conduct. While untrue claims like Ms Gibson’s are clearly in contravention of the regulations, it is also possible to become inadvertently noncompliant, when conducting what is known as a ‘commercial fundraiser’. 

What is commercial fundraising?

Commercial fundraising is when a business raises money for a charitable organisation by promoting to consumers that a certain amount or percentage of sales will be donated to a charity – for example, 10 cents for every item sold. This is often a preferred method for businesses to support charities, as it allows for concise, catchy messaging and boosts brand reputation. Socially conscious consumers are highly motivated by charitable claims, and commercial fundraising capitalises on this, to maximise both the amount raised and product sales. While commercial fundraising is an attractive option for these reasons, it creates several compliance complexities, including: 

• When promoting to consumers that a certain dollar or cent value is donated for each product purchased, this means that the donation needs to be made after the promotional period is over. 
• The donation must be calculated with reference to the actual sales made during the promotional period. It is not sufficient to make a donation based on the sales from a previous period, or an estimate of the expected sales. 
• It may be misleading to cap the value of the donation (for example, ‘up to a maximum donation of $50,000’) unless this is made very clear in the advertising. Any advertising collateral should also be removed once that maximum amount is reached or the fundraising period has ended. 

There are further recent examples that illustrate the difficulties encountered by businesses when engaging in commercial fundraising and making charitable claims. 

Chiara Ferragni and the Christmas cakes

In 2023, Italian influencer Chiara Ferragni was fined €1 million by Italy’s competition authority (AGCM) in relation to sales of Ferragni-branded Pandoro Christmas cakes. Produced in collaboration with manufacturer Balocco, the packaging claimed that a portion of sales was donated to a children’s hospital, when in fact Balocco had donated €50,000 before launching the campaign, but made no further donations.

In a separate incident, Ferragni and her companies were under investigation for the sale of Easter eggs in 2021 and 2022 with packaging suggesting that sales were supporting a children’s charity. In July 2024, Ferragni’s companies agreed to pay at least €1.2 million to the charity to settle the case.

These cases illustrate the practical difficulties of commercial fundraising, especially with a collaboration between brands. Collaborating businesses should use contracts to clearly outline various elements including:

1. which party is responsible for making the donation, and 
2. the specifics of how the donation is calculated. 

Oscar Wylee’s misleading claims

In 2019, the Australian Competition and Consumer Commission (ACCC) commenced proceedings against Australian eyewear retailer Oscar Wylee for misleading or deceptive conduct relating to charitable donations and affiliations. 

Oscar Wylee made multiple statements to the effect that, for each pair of glasses purchased by a consumer, it would donate another pair of glasses to someone in need. In fact, Oscar Wylee only donated about one set of frames (without lenses) for every 100 pairs of glasses sold. The retailer also represented between 2014 and 2018 that it was affiliated with Rose Charities. However, the company had only made a one-off donation of $2,000 and 100 frames in 2014. As a result, Oscar Wylee was ordered by the Federal Court to pay $3.5 million in penalties.

This case demonstrates that the ACCC and the Australian courts take a dim view of false or misleading charitable claims and are prepared to impose hefty penalties. Businesses should be advised that the ACCC actively enforce this area, and the reputational fallout of any investigation is also likely to be severe.

The final word

Consumer issues in the digital economy, and particularly misleading advertising and influencer marketing, is one of the ACCC’s focus areas for 2024-25. While businesses may have good intentions to raise funds for charity, this is a timely reminder to review your charitable claims to ensure strict compliance with consumer law. If committed to commercial fundraising, businesses should establish a framework for continually monitoring donations and compliance. Alternatively, to minimise risk and complex compliance obligations, a one-off donation may be more suitable, but this must then be clearly communicated to consumers. 

If you want to avoid making false or misleading charity claims and ensure your advertising and marketing claims are compliant with the Australian Consumer Law, please contact us for advice.

By Hannah Richardson and Madeline Wyre