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Misleading & Deceptive Conduct

It’s difficult for entrepreneurs and small business owners to know where the legal line is in marketing. I really do get that – they’re desperate to make conversions and, along the way, there are probably going to be casualties.

The Limitations on Australian Companies

However, in the modern world everybody should be aware that companies do have limitations on the claims they can make and the manner of selling they undertake to snag new customers. In the modern world it’s not enough to be greedy in business… even if you’re successful. You are going to be held to account for your marketing integrity.

The limitations for an Australian company are spelled out in the Competition and Consumer Act 2010. Prior to 1 January, 2011 this piece of legislation was more widely known as the Trade Practices Act 1974.

Any Australian company should understand what constitutes misleading and deceptive conduct under this legislation. And they should realise that:

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.ACCC

Legislation that Protects Consumers

When defining what constitutes misleading and deceptive conduct in business the ACCC provides these statements:

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.ACCC

That means if you are selling goods or services as an Australian company you had better provide a realistic idea of what they can expect from the product. Wild sales pitches that cannot be guaranteed should not be guaranteed, for example. And I don’t see that as a hard call to make – you don’t mislead people about the benefits of something just to get access to their bank account.

Australian Consumer Law

It is well worth your while – business people and consumers alike – to check out the new ACL (Australian Consumer Law) website. A general description of the new Australian Consumer Law includes:

  • a national unfair contract terms law covering standard form contracts;
  • a national law guaranteeing consumer rights when buying goods and services, which replaces existing laws on conditions and warranties;
  • a national product safety law and enforcement system;
  • a national law for unsolicited consumer agreements, which replaces existing State and Territory laws on door-to-door sales and other direct marketing;
  • simple national rules for lay-by agreements; and
  • new penalties, enforcement powers and consumer redress options, which currently apply nationally.ACL

The ACL applies to all Australian businesses and all transactions since 1 January, 2010.

If you are a consumer and you feel that any business has been misleading or deceptive then I would recommend that you should make a complaint to the ACCC.

Lodging a Complaint against a Seller or Proprietor

The process is to contact the seller or proprietor to attempt negotiation of the issue and if that fails then notify them of your complaint and your intention to take it further with the ACCC. If you have no response from the seller or proprieter after 10 days to 2 weeks then write a letter to the ACCC to lodge your complaint. You may want to also talk to a lawyer.

The problem is really as simple as this: we get the business environment that we deserve. If we don’t demand honest businesses then we won’t get them. Yes I do understand that entrepreneur’s feel that selling is just the ticket to get your dollar… but that’s so old school. We expect more from entrepreneurs and businesses nowdays.

The ACCC website also have this to say… and Australian businesses should pay attention:

We 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.ACCC

Just be Honest & let the ACCC know your concern

The Internet, for example, is NOT the Wild West. And even if you complain and nothing happens… others may be having the same issue with the same business. Eventually the ACCC will see a pattern and may decide to act to protect Australian consumers.

Just be honest about what happened, provide all the documentation that you can, and about what you can and cannot prove. Obviously smart operators will keep the incriminating stuff verbally on the telephone and watch their words within the email trail.

And don’t let anybody bully you out of complaining… by threatening you with a legal action. It is your legal right as an Australian consumer to complain to the ACCC if you have concerns.

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About the Author

Steven Clark Steven Clark - the stand up guy on this site

My name is Steven Clark (aka nortypig) and I live in Southern Tasmania. I have an MBA (Specialisation) and a Bachelor of Computing from the University of Tasmania. I'm a photographer making pictures with film. A web developer for money. A business consultant for fun. A journalist on paper. Dreams of owning the World. Idea champion. Paradox. Life partner to Megan.

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