Advertising agents warned of risks of breaching Trade Practices Act

Advertising agents are being warned of the high risks they run if advertising they create breaches the Trade Practices Act 1974.

In a speech to the Advertising Federation of Australia in Sydney today, ACCC Chairman, Professor Allan Fels, is to reiterate warnings that agents are not protected from claims about their advertising.

"Advertising agencies that knowingly participate in false or misleading campaigns put themselves at risk.

"There is already a precedent in regard to the liabilities of advertising agents. We have taken action against an Adelaide advertising agent for aiding and abetting the Nissan Motor Company (Australia) in misrepresenting the model and price of its Patrol RX Turbo Diesel. The advertising agent was fined $10,000 while Nissan was fined $130,000.

"Currently there are two cases in which the ACCC has alleged that two ad agencies were involved in false, misleading and deceptive advertising of health insurance products with their respective clients, Medical Benefits Fund of Australia and NRMA Health Insurance (including SGIC and SGIO).

"The Commission does not necessarily expect agencies to independently check the technical claims made about a product, but if they are complicit in an obviously misleading presentation and fine print is used to obscure an offer's restrictions, then difficulties start to arise".

Professor Fels urges agents to learn about their rights and responsibilities under the Act.

"Ignorance of and contempt for the provisions of the Act is risky for you, for your firm and for your clients. Ignorance of the law is no defence and neither is a 'contract' that some ad agencies ask their clients to sign to waive their legal responsibilities".

Professor Fels highlights that advertising is important and is generally good for competition.

"The key point is that advertising and selling practices that are honest and accurate generate benefits for the community".