False Or Misleading Representation Of G/S’: A Guide

Jan 22, 2016
Reading Time: 3 minutes
Written by Ananya Singh

Advertising your business/service is a must if you want people to know that your product/service exists and that it’s the best in the business. However, while you think your product/skills are out of the world, you must put on your objective glasses to make sure that you are not engaging in false or misleading representation of your product or service.

There is a fine line between promoting your product and entering into the illegal area of exaggerating your product/service. While exaggeration works fairly well in real life (at the risk of you sounding like a bragger), under the Australian Consumer Law (ACL) you can actually be fined or face a potential lawsuit.

The eight “Oh no-no” of advertising your product/service.

The question then arises, “what is off limits?” According to NSW Fair Trading’s guide, you must not engage in:

    1. promotion of a false claim or misleading description about your product/service and its supply – this includes refraining from making false or misleading representations regarding the product/ service’s quality, condition, value, price, guarantee etc. A detailed list of such “Oh no-no’s” can be found on the NSW Fair Trading Commissions’ guide.
    2. false or misleading testimonials – these are reviews from customers that have previously used your product/service. You cannot twist your customer’s reviews or hire actors to give misleading reviews about your product/service.
    3. making false and misleading representations about the sale or grant of an interest in land – this includes making false representations regarding a business’s approval, affiliation and sponsorship along with availability of facilities etc. See NSW Fair Trading Commission’s guide for more details.
    4. making false and misleading representations about the nature of employment and business activities – this includes falsifying the availability of employment opportunities and employment conditions at your business. Also, it is unlawful for you to claim that your business is earning a profit when it may not be doing very well.
    5. offering rebates, gifts, prizes and other free items that you do not intend to provide – for example, you cannot claim to give your customer tickets to a Beyonce concert as a prize for a competition if they buy your product/service if you did not intend to give them the prize. Not only is that painfully cruel but also illegal.
    6. bait advertising – this occurs when you advertise a product at a certain price but you do not actually have a sufficient supply of that product for the customers. So when the customer comes looking for that product, you urge the customer to buy higher-priced goods instead.
    7. wrongly accept payments for goods/services – you must not accept payments for any goods/services that you do not intend to, or are not able to, supply unless it was for reasons that were beyond your control or you were exercising due diligence.
    8. other unconscionable conduct – you can figure out what is unconscionable conduct using common sense. If the activity you are engaging in, regarding supplying or selling of your goods/services, seems morally wrong then it probably is. For example, taking advantage of a customer that does not properly speak English to convince them to buy a product you know will not satisfy their requirements but it is more profitable for you is morally incorrect and thus falls into the category of unconscionable conduct.

If you avoid the above “Oh no-no’s” your business should be off to a good start with not only the law but also your customers. Being honest with your customers has long-term benefits, it could ensure customer loyalty and your business may profit from having an ethical reputation. Moreover, the phrase “all publicity is good publicity” does not really apply if your business gets accused of engaging in unconscionable conduct that harms the consumers.

Still unsure if you are engaging in misleading and deceptive conduct? Contact a LawPath consultant on 1800 529 728 to get fixed price quotes to get advice from an experienced lawyer specific to your job.

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