5 Takeaways for Businesses About Misleading Information

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Table of Contents

• 1. Conduct is Viewed in its Entirety
• 2. Who is the Targeted Audience? 
• 3. In the Buyer’s Position
• 4. Reliance
• 5. How Information is Presented
• In Short

As a business owner, providing misleading information on your promotional material may result in you breaching the Australian Consumer Law (ACL). You can, however, promote your business and avoid using misleading information. Below, we set out a few tips to help you understand what misleading information is and how you can prevent your organisation falling foul of the ACL.

1. Conduct is Viewed in its Entirety

When determining whether information was misleading, a simple line cannot be viewed without context. For example, the ACCC will look at the words, acts or sentences a business uses in its entirety so that the meaning of the words shed light on the entire circumstance. For written material, such as a brochure, the ACCC will consider the whole written text, images and the format the business used to present the information. 

2. Who is the Targeted Audience? 

In determining whether the conduct is misleading or deceptive, the ACCC will look at who was the intended audience receiving the information. In most circumstances, the targeted audience is taken to have an ordinary or reasonable understanding. Based on this test, the ACCC will analyse the business’ conduct to see if the information produced would likely mislead the targeted audience. 

3. In the Buyer’s Position

A different test is applied if a business made representations to an identifiable group of people. Here, a misleading representation is considered in light of a reasonable person in the same position. The assessment of reasonableness will be taken as a whole, looking at the customer’s reliance on the information a business provides.

4. Reliance

For misleading behaviour to arise, the purchaser must rely on the representation. This means that a buyer must rely on the business’ representation when deciding to enter into a contract. 

5. How Information is Presented

As the ACCC considers misleading conduct as a whole, it is important to note the way in which a business presents promotional information. When it comes to written material, there may be certain materials, such as brochures or advertising copy text that is a reasonable buyer is unlikely to use for the purpose of making a decision. There are however other materials, such as reports or plans where the business provides information so that customers have the factual details to make a decision based on these representations.

In Short

The ACCC approaches misleading conduct and information as a whole and contextually. The buyer needs to rely on the information his or her actions will also be considered. If you are a business involved in day-to-day business transactions, get in touch with LegalVision’s consumer lawyers to ensure you are complying with the ACL, either through your promotional material or the representations you make in business transactions!