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The Federal Court has dismissed the Australian Competition and Consumer Commission’s proceedings against Magnamail after finding the direct mail order company did not make false or misleading representations to consumers in its catalogue promotions.
The ACCC had alleged Magnamail made false or misleading statements in promotional materials sent to hundreds of thousands of consumers in connection with 12 “pre-draw” prize promotions between May 2022 and July 2023.
The case centred on promotional materials including letters, envelopes, catalogues and scratch cards that Magnamail distributed alongside its mail order catalogue. The regulator claimed that the materials represented to consumers that if they placed an order from the catalogue, they had a right to claim, were eligible for or had qualified for major prizes including cash up to $25,000.
However, the ACCC alleged the draws for those prizes had already taken place before consumers received the promotional materials, meaning only a small number of pre-drawn consumers could actually claim a major prize.
The Court found the promotional material did not make the alleged false and misleading representations.
Parent Company Also Cleared
The Court also dismissed the ACCC’s case against Magnamail’s parent company, Direct Group. The ACCC had alleged Direct Group was knowingly involved in Magnamail’s conduct.
The regulator said it is carefully considering the Court’s judgment.
The ACCC first instituted proceedings in the Federal Court against Magnamail in November 2024, alleging false or misleading statements in relation to pre-draw promotions. The case against Direct Group for allegedly being knowingly involved was brought at the same time, following an investigation into consumer complaints.
How The Promotions Worked
Magnamail is a direct mail order catalogue business that operated in Australia and New Zealand, selling a range of merchandise through catalogues distributed to the public. Its catalogues generally included a promotion that consumers could participate in if they made a purchase from the catalogue.
The pre-draw model at the centre of the case involved running prize draws before promotional materials were sent to consumers. The ACCC’s position was that this structure was misleading because it gave consumers the impression they could win prizes by placing an order, when in reality the winners had already been determined.
Despite the Court’s finding that the representations were not made, Magnamail stopped running pre-draw promotions in 2023 after becoming aware of the ACCC’s investigation.
Direct Group
Magnamail is owned by Direct Group, a direct-to-consumer retailer that operates a range of brands and publications including Reader’s Digest, Over Sixty, Infashion and House of Pets.
Direct Group also operates TVSN (Television Shopping Network), a shopping network channel that broadcasts on free-to-air TV and subscription services such as Foxtel.
Last Updated on July 24, 2026 by Nick Ross
