False or misleading claims
There are laws in place to protect you from being misled about the products and services you buy.
Businesses are not allowed to make statements that are incorrect or likely to create a false impression.
This rule applies to their advertising, their product packaging, and any information provided to you by their staff or online shopping services.It also applies to any statements made by businesses in the media or online, such as testimonials on their websites or social media pages.
For example, businesses cannot make false claims about:
- the quality, style, model or history of a product or service
- whether the goods are new
- the sponsorship, performance characteristics, accessories, benefits or use of products and services
- the availability of repair facilities or spare parts
- the need for the goods or services
- any exclusions on the goods and services.
It makes no difference whether the business intended to mislead you or not. If the overall impression left by a business’s advertisement, promotion, quotation, statement or other representation creates a misleading impression in your mind—such as to the price, value or the quality of any goods and services—then the behaviour is likely to breach the law.
There is one exception to this rule. Sometimes businesses may use wildly exaggerated or vague claims about a product or service that no one could possibly treat seriously or find misleading. For example, a restaurant claims they have the ‘best steaks on earth’. These types of claims are known as ‘puffery’ and are not considered misleading.
Some examples of business behaviour that might be misleading are:
- a mobile phone provider signs you up to a contract without telling you that there is no coverage in your region
- a real estate agent misinforms you about the characteristics of a property by advertising 'beachfront lots' that are not on the beach
- a jewellery store advertises that a watch 'was' $200 and is 'now' $100 when the store never sold the watch for $200
- a business predicts the health benefits of a therapeutic device or health product but has no evidence that such benefits can be attained
- a transport company uses a picture of aeroplanes to give you the impression that it takes freight by air, when it actually sends it by road
- a company misrepresents the possible profits of a work-at-home scheme, or other business opportunity.
These are some of the most common types of false or misleading advertising reported to the ACCC.
Fine print and qualifications
It is common practice for advertisements to include some information in fine print. This information must not contradict the overall message of the advertisement. For example, if an advertisement states that a product is ‘free’ but the fine print indicates some payment must be made, the advertisement is likely to be misleading.
Some advertisements or sales material may compare products or services to others on the market. These comparisons may relate to factors such as price, quality, range or volume.
Comparative advertising can be misleading if the comparison is inaccurate or does not appropriately compare products.
Bait advertising takes place when an advertisement promotes certain (usually ‘sale’ prices) on products that are not available or available only in very limited quantities. It is not misleading if the business is upfront in a highly visible, clear and specific manner about the particular product ‘on sale’ being in short supply or on sale for a limited time.
Environmental (‘green’) claims
Environmental claims may appear on small household products such as nappies, toilet paper, cleaners and detergents through to major white goods and appliances. They may include statements about environmental sustainability, recycling, energy and water efficiency or impact on animals and the natural environment, for example 'green', 'environmentally safe' or 'fully recycled'.
Businesses making these claims must be able to substantiate them.