False or misleading claims
Any statement representing your products or services should be true, accurate and able to be substantiated. There are fines for businesses that mislead consumers. It does not matter whether a false or misleading statement was intentional or not.
It is illegal for a business to make statements that are incorrect or likely to create a false impression. This includes advertisements or statements in any media (print, radio, television, social media and online) or on product packaging, and any statement made by a person representing your business.
For example, your business must not make false or misleading claims about the quality, value, price, age or benefits of goods or services, or any associated guarantee or warranty. Using false testimonials is also illegal.
When assessing whether conduct is likely to mislead or deceive, consider whether the overall impression created by the conduct is false or inaccurate.
Businesses can't rely on small print and disclaimers as an excuse for a misleading overall message. For example, an advertisement states that a product is ‘free’ but the fine print indicates some payment must be made.
If your business needs to qualify its advertisements, make sure the qualifying statements are clear and prominent so that consumers know what the real offer is.
Comparative advertising may be used to promote the superiority of your products or services over competitors as long as it is accurate. The comparison may relate to factors such as price, quality, range or volume.
Bait advertising is the illegal practice of advertising specific prices (usually special ‘sale’ prices) on goods that are not available or are available only in very limited quantities (where this limit is not clearly and specifically disclosed).
You should only offer goods or services at a ‘special price’ if they are available in reasonable quantities for a reasonable period, unless you state clearly that the good is in short supply or on sale for a limited time.
Country of origin
It is illegal under the Australian Consumer Law to make false or misleading claims about the country of origin of goods, that is, claims that a product (or part of a product) was made, produced, manufactured or grown in a particular country. This includes displaying symbols usually associated with a particular country (for example, the Australian flag or a kangaroo) on goods or their packaging.
To provide certainty for businesses, the ACL provides ‘safe harbour’ defences for certain claims, including ‘Made in’, ‘Product of’ or ‘Grown in, about the country of origin of goods. If goods satisfy the criteria for these defences, the claim will be safe from legal action under the key provisions regarding false, misleading or deceptive conduct. However, businesses are still entitled to make country of origin claims that do not qualify for these defences, providing they are not false, misleading or deceptive.
Premium (or credence) claims
Premium claims may suggest a product is safer (‘non-toxic’), offers a moral or social benefit (‘free range eggs’) or a nutritional benefit (‘fat free’). The benefit may also be 'green' or environmental (‘100% recyclable’) or therapeutic (‘the fastest pain reliever’). A premium claim may also promote a product as being of a perceived quality (‘Swiss chocolate’ or ‘Belgian beer’).
Claims that give the impression that a product, or one of its attributes, has some kind of added benefit when compared to similar products and services can be made as long as the claims are not misleading and can be substantiated.
If your business gives away free items or prizes as a promotional activity, you must not mislead your audience about the items on offer or the chances of receiving these items.
If there is a catch (for example, if people must meet certain conditions to claim a prize), you must let people know at the outset.
Contact your local consumer protection agency to check if there are any legal requirements under state/territory laws.
‘Puffery’ is a term used to describe wildly exaggerated or vague claims about a product or service that no one could possibly treat seriously. For example, a restaurant claims they have the ‘best steaks on earth’. These types of statements are not considered misleading.
When presenting information about products or services to customers, be sure to:
- give current and correct information
- use simple language
- check that the overall impression is accurate
- back up claims with facts and documented evidence where appropriate
- note important limitations or exemptions
- correct any misunderstandings
- be prepared to substantiate.
- guess the facts
- omit relevant information
- make ambiguous or contradictory statements or use unnecessary jargon
- make promises you cannot keep, or make predictions without reasonable basis
- offer goods or services without a reasonable basis for believing you can deliver them.