When should "Misleading Consumers" become a Criminal Matter?

I refer to a post by @BrendanMays` Nuro-fined. As you are probably aware that the manufacturers of Nurofen will be fined $6 million for misleading consumers. I relied:

Don’t worry about it @BrendanMays the answer is here http://www.abc.net.au/news/2016-12-16/nurofen-fined-6m-for-misleading-consumer/8126450. “These pain specific Nurofen packages were set at a significant price premium to regular Nurofen.” And “Between 2011 and 2015 the company sold 5.9 million packets of the specific pain medication, yielding revenue of $45 million.”

Sounds like fraud to me as well as misleading conduct.

And that is the question, while the actions were clearly misleading why weren’t criminal charges considered. The company deliberately sold the same product at a higher price duping consumers into believing they were paying the price premium for a superior product. Where is the line between consumer issues and criminal conduct?


Good question @Albie! It’s frustrating when a company as large as Nurofen can get away with this behaviour for so long, and extract such large amounts from misleading consumers. And in the same token, when is conduct ‘misleading’ and/or just a more sophisticated scam?

In any case, we definitely want to see stronger deterrents and more meaningful punishments for major offenders (sounds like 2017 will be busy). We’re listening to comments here and across our social and media channels - please keep sharing your thoughts.


First, I believe a 10x or greater fine computed on gross receipts from misrepresentation should be the minimum fine to assure appropriate corporate attention, BUT:

  • Nurofen (ibuprofen is the active ingredient) is efficacious for treating {A, B, C, …, X,Y,Z}
  • a Nurofen box labelled for headaches might be (eg) $10, for joint pain maybe $9; and in both cases it provides relief although could cause the unnecessary side effect of pocketbook pain.
  • some people are disinterested in what they buy and thus are happy to pay $10 for “headache medicine” or $9 for “joint pain medicine”, even though they could have bought generic ibuprofen for $2 or “Nurofen plain” for $7. (You can import generic ibuprofen from the USA for about $0.035 per tab in 500 ct bottles, delivered, against $0.20 or more per tab for local product in a shop.)

Labelling a “general purpose broad spectrum” product such as ibuprofen for a selected malady it is useful for treating and charging a premium price is cynical marketing at best, misrepresentation at worst, but not likely criminal misrepresentation. It might be criminal misrepresentation if XXX was labelled for treating bad vision even though the company knew it was known to cause blindness or heart failure and neither side effect was disclosed.

Part of the problem is defining criminal misrepresentation as distinct from misrepresentation as distinct from cynical marketing, in a legal sense that withstands scrutiny in the general case. Is it possible to protect everyone against everything by more and more “shelf laws” (ie generally un-enforced except in the most egregious cases)? People have always been and probably always will be more creative in their foolishness than any form of governance or legal protection can keep up with.


Fines are a complete waste of time. The company pays the fine from petty cash and the Manager gets a few million bonus.

Nothing will change until the people responsible are gaoled.


Small fines are worse than a waste of time. Prosecutions cost and clog the legal system. Sufficiently large fines have been shown to get corporate attention from public embarrassment and threats to dividends, It is an interesting idea to prohibit public companies from paying bonuses to any executive if the company is found in breach of a related law.

Maybe and maybe not. One ongoing problem is that corporations are treated as individual humans when it suits, or as faceless businesses when it suits, so we get the worst outcome of each. Putting the person responsible in jail is interesting, but sometimes the guilty will have many scapegoats be they innocent or not. In a practical sense I suggest that could be in the “too hard” basket to get right without a wide net being subjected to charges, with unintended consequences for the peripherally involved.

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I agree wholeheatly with @Fred. In this instance individuals have devised a scheme which was intended to dupe the consumer; maximise the company’s profit and when the truth comes out hide behind the corporate veil wailing “mea culpa”. How can the consumer have confidence in laws that allow companies to carry out this contemptible scam when they walk away with a fine that doesn’t even wipe out thier profit! Hopefully in the future we can shape laws appropriately that hold individuals or CEO’s responsible for such blatant, callous programs that set out to confuse, mislead and take money from the consumers pockets.


They company made $45 million dollars profit out of the dishonest products. They should have been fined the $6 million AND made to forfeit the total profit ie fine of $51million. That would be a deterrent. In this case the “fine” still left the company with a $39 million profit; not much of a deterrent there. They’re laughing all the way to the bank.

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They should have been fined twice the profit they made.


Perhaps, in addition to fines they should be ordered to advertise the truth about their product to the same extent and expense that they promoted the misleading information. I think it could be something along the lines of issuing a correction but having the scale of an advertising campaign.


The problem is that no-one can get to the person / people who signed off on those decisions. A corporation is hard to jail, whereas individuals are relatively easy to put behind bars. But it needs a very dedicated investigator who will track down the person ultimately responsible for each of those marketing decisions.

On the bonus side, it would only have to happen a few times before less such greed-driven decisions were made. And if (as they inevitably would do eventually) the companies make a decision to ditch email archives and shred documents, then THAT decision in turn has to be pursued to the person responsible and they should be jailed for attempting to pervert the course of justice and impeding investigations.

THAT would be a deterrent, everything else is just money…


Part of the legal difficulty is that such decisions are usually made by a group of individuals not by one individual even if one technically signs off. It becomes a game to deflect guilt onto others and present the guilty parties as innocents who were mislead by others. In addition many if not most senior executives in most jurisdictions are shielded from personal legal costs by their contracts - the company pays - they get top silks, not just good ones. Even if the end game puts their backs to the wall the silks will argue proportional culpability to minimise their client’s role.

Prosecutors/investigators would wade through the myriad scapegoats put in their way, and then the silks and a sympathetic government (that is convinced corporate “bad guys” should be no more subject to prosecution than the MP’s themselves) maximise the loopholes and minimise the penalties. Therein lies much of the problem – a dollar in a pocket is what matters to government and that is not likely to change under any of our major parties.

I believe the answer lies in making the CEO responsible for the action of thier subordinates. They have done this in the US and now the EU.https://apps.americanbar.org/litigation/committees/criminal/articles/122210_responsible-corporate-officer.html http://www.independent.co.uk/news/business/news/ceos-hague-international-law-tried-environmental-crimes-icc-a7315866.html
CEOs take home millions of $'s / annum. For what? Apologising to the public for " a mistake". If you want corporate responsibility then make the person in charge of the corporation responsible!


Simplicity itself - the person at the top is responsible. Put the MD and the Chairman of the Board behind bars and things will change rapidly.

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I believe many of us are in agreement that the BoD, CEO and responsible senior manager should be held personally liable. Re the Board, would that include dissenting directors or only assenting directors, to start the legal circus rolling?

Further, board members in Australia are already personally liable for knowingly trading while insolvent. Their exposure is described at at http://asic.gov.au/regulatory-resources/insolvency/insolvency-for-directors/directors-consequences-of-insolvent-trading/ My cynicism aside, it could be simple if government was willing to add other actions in addition to insolvency but what are the odds?

Then we have some business interests working to introduce the equivalent of the US Chapter 11 Bankruptcy here. That allows debts to be cancelled or reduced with creditor consent and a court supervised reorganisation with an aim of preserving jobs and paying the creditors as much as possible. The counter-argument is that is essentially a get out of jail free card for executives to play fast and loose.

Here is a (dated) example of how our current approach went in the high profile HIH failure - 03-217 Court upholds penalties against HIH directors | ASIC

If I were the silk defending the executives as you state, I would go with a “disgruntled underling set me up”. If that was really what happened how do you proceed? Eg legislating so that prosecution worked as intended but was fair to those who could legitimately have been innocent is another matter; we are gifted by governments that struggle making quality legislation.

What the Americans can do in a paragraph, the Brits can do on a page, and we use a chapter. With every additional sentence an intent is usually made less rather than more precise as pesky commas and sentence structures take over. A simple laymen’s example is the Vic (and probably other states) road rules with myriad footnotes and cross references and exclusions or inclusions by omission making them sometimes difficult to comprehend by their busy-ness and attempts to be all-inclusive, all-defining in the drafting, resulting in “innocent offences” (eg done from ignorance of being able to understand it all) probably being more the rule than the exception.

If anyone wants to play, post a draft legislation you think would meet the goal AND would get through a business controlled parliament, and I’ll have a go at poking holes to illustrate how difficult it can be.

@PhilT, clearly no one is going to spend time drafting clumsy words for your amusement. If the time ever did come when the legislators did decide to draft an Act I think you should be involved to point out the many pitfalls laying in front of them. I’m sure we would end up wilth a very strong, workable piece of legislation!

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And the first place to start would simply be to change the penalty on existing laws from a small fine to gaol time.

Not withstanding the company clearly intended to defraud the customer, the customer made it possible for them to do so. Even a cursory reading of the packaging (which all detailed the ingredients) clearly showed that all of the packets contained 200mg ibuprofen - exactly the same as a non brand generic pack. If the customer then buys nurofen for ‘migraine’, ‘period pain’ or any other pain, then they get what they deserve.

As they say ‘a fool and his money are soon parted’; there is no legislating for stupidity!

Well clearly they do legislate for “stupidity” as you put it, otherwise the company would not have been prosecuted and found guilty. As I stated much earlier when these products hit the market I did exactly as you suggested. Rather than say that any idiot that pays extra deserves what they get, I was extremely angry. The marketing hype was quite deliberately aimed at the more trusting or naive in our community and to me that was unforgivable.


Albie, if you reread my post you will see I am not defending the clear intention of the company to defraud. What I am saying is that the customer allowed them to do it - and to do it for so long. There is no legislating that! If the customer had not bought into the deception (by reading the clear ingredients statement on each box) the company would not have continued as they did - laughing all the way to the bank. Sometimes we have to take responsibility for our own actions. Someone somewhere was buying these different coloured boxes and a lot of someones at that.

That was not intended for “my amusement” but to try to demonstrate how difficult it would be to pen something that could work.