Australian casual wear retailer Cotton On is being taken to court by the Australian Competition and Consumer Commission over allegations that it sold children's night dresses and pyjamas that posed an increased fire risk.

The ACCC yesterday (6 October) also claimed the retailer sold children's pyjamas that had an applique with some un-stitched fabric wider than allowed.

The consumer watchdog alleges that by offering the night dresses and pyjamas for sale with a "low fire danger" label attached, Cotton on misrepresented that the garments were made from a fabric of low fire danger and were styled to reduced fire danger. Loose fitting flammable clothing increases the risk of burns if it catches fire.

The ACCC is seeking declarations that Cotton On has contravened the Competition and Consumer Act, pecuniary penalties, injunctions, that Cotton On implement a trade practices compliance programme and costs.