Know the truth about false advertising
Active competition and innovation in markets around the world has given consumers access to a huge range of choice in goods and services. No matter how a business communicates with you—whether it is through packaging, advertising, logos, endorsements or sales pitch—you have the right to receive accurate and truthful messages about the goods and services that you buy. The Trade Practices Act prohibits conduct by a corporation that is misleading or deceptive, or would be likely to mislead or deceive you. Although this may not have been the intention of the business, it is how the conduct of the business affected your thoughts and beliefs that matters.
If the overall impression left by an advertisement, promotion, quotation, statement or other representation made by a business creates a misleading impression in your mind—such as to the price, value, or the quality of any goods and services—then the conduct is likely to breach the law.
The law also says businesses must not make false claims about:
• the quality, style, model or history of a good or service
• whether the goods are new
• the sponsorship, performance characteristics, accessories, benefits and uses of goods and services
• the availability of repair facilities or spare parts
• the place of origin of a good (for example, where it was made or assembled)
• a buyer’s need for the goods or services
• any exclusions on the goods and services.
The price of a good or service is often a good indication of its quality or its availability of supply. Price comparisons can also give you an indication of whether you are getting a good deal or a bargain. There are also special laws relevant to price advertising and promotions. A business may breach these if it:
• makes inaccurate or misleading price comparisons (for example ‘was’ and ‘now’ prices)
• represents that an advertised price is the total price that you will have to pay when in fact it is not
• advertises goods and services at a specific price when the business is/should have been aware, that it would not be able to supply enough of the good at the price for a reasonable amount of time. This is called “bait advertising”.
Whether or not conduct is considered misleading or deceptive will depend on the particular circumstances of each case. Conduct that misleads one group of consumers will not necessarily mislead every consumer. Some examples of conduct that may be misleading or deceptive are:
• a mobile phone provider signing you up to a contract without telling you that there is no coverage in your region
• a real estate agent misrepresenting the characteristics of a property, for example, advertising ‘beachfront lots’ that are not on the beach
• a jewellery store promoting that a watch ‘was’ $200 and is ‘now’ $100 when the store never sold the watch for $200
• a business predicting the health benefits of a therapeutic device or health product but having no proof that such benefits can be attained
It is important to be aware that “puffery” in advertising is a practice that is generally not prohibited. Puffery is a term used to describe wildly exaggerated, fanciful or vague claims for a product or service that nobody could possibly treat seriously, and that nobody could reasonably be misled by. Examples of puffery include ‘best food in town’ or ‘freshest taste ever’.
Any claims or representations made by a business must be accurate and truthful. If you think a business has been dishonest, exaggerated the truth, or created a misleading impression, then you should report your concerns. You may not be the only consumer affected. First you should attempt to resolve your concerns with the trader and negotiate a suitable resolution. However if this doesn’t work there are people who can protect your rights as a consumer:
• The ACCC can take action in court against corporations and related individuals involved in misleading conduct, and may apply to the court for an injunction and other orders. They are more likely to take action against a business for misleading advertising if it has been carried out through a medium that reaches a wide audience, such as over the internet, on national television, or through a nation-wide print advertising campaign.
• ASIC is the consumer protection regulator for financial products and services and has powers to protect consumers with regards to financial products and services, such as credit, banking, investments, superannuation, or insurance.
• A lawyer may be able to help if you have suffered a loss as a result of a business’ misleading or deceptive conduct or misrepresentation. If so, you may have a private right of action under legislation.
Courts can order damages, injunctions and other orders against businesses found to have engaged in misleading or deceptive conduct. If you have lost money as a result of this, it is recommended that you seek legal advice about taking court action against the business involved or potentially lodging a claim in your local small claims tribunal.
Here at The Quinn Group our experienced team of lawyers can assist you in lodging a claim and provide you with more information with regards to misleading and deceptive advertising. Submit an online enquiry to find out more or call us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.