Charity bin deception sees company ordered to donate $100,000

A West Australian company has been ordered to donate $100,000 to charity and issue an apology for misleading the public with images of African children on clothing bins.

E’Co Australia settled out of court following an investigation by WA’s Commissioner for Consumer Protection into misleading conduct, the ABC reports.

The company placed 300 clothing collection bins in more than 200 locations around metropolitan Perth between January and November 2011. The images and texts on the bins implied that donated clothes would be given to charity.

However, the business was selling the clothing to overseas merchants for a profit and in many instances the bins were placed alongside those from registered charities.

Hall & Wilcox Lawyers partner Sally Scott told SmartCompany businesses need to make sure they don’t mislead the public.

“They can’t mislead by express words and they can’t mislead by implication,” she says.

“Pictures of poor African children on a clothing donation bin could very well leave an overall impression to the public that clothing would be either given to poor African communities or that the clothing would be sold with profits going those communities.”

Scott says when it comes to advertising, businesses need to consider the wider context of their promotional activities.

“They need to turn their mind to what the overall impression is and whether the overall impression is misleading,” she says. “This is not just a matter of considering the actual words used.”

After legal action was launched in November 2011, E’Co Australia agreed to place stickers on their bins clearly stating deposited items may be sold for profit. The recent settlement, which involves donating $100,000 to charity and publishing an apology in the form of a newspaper advertisement, related to the company’s conduct prior to agreeing to clarify what would be done with items placed in the clothing donation bins.

SmartCompany contacted E’Co Australia for comment but no comment was received prior to publication.