Do you use fine print when advertising your business’ goods and services? Do you use disclaimers or fine print through the use of an asterisk (*)? Alternatively, do you provide disclaimers by using phrases like “conditions apply” or “terms are subject to change”? One of the most misunderstood areas of advertising law is the effect of disclaimers on the Australian Consumer Law (‘ACL’). Many businesses use these as common practice. However, you need to be aware that disclaimers cannot excuse misleading or deceptive conduct. This article will explain when you can use disclaimers effectively and when they may be considered misleading conduct or deceptive conduct.
What is Misleading and Deceptive Conduct?
The ACL prohibits you from engaging in conduct that is likely to mislead or deceive consumers. That is to say, you cannot make false claims in your advertising that could induce a consumer into purchasing your goods or services.
For example, you cannot make a false claim that a certain branded laptop has the longest life expectancy amongst all other laptops on the market. This would be misleading to the consumer.
The Use of Disclaimers and Fine Print
Businesses will often want to make a certain claim about their goods or services in their advertisements. However, to ensure that the claim is not false, they will include a disclaimer to accompany that claim to avoid incurring legal liability.
For example, a claim that states “Joe’s coffee was voted best coffee in Australia*”. The asterisk may link to a disclaimer stating “from a poll conducted in 2013 in the Pyrmont area amongst age group 18-25”.
Often, these disclaimers or small print are able to effectively qualify the claim so that it is not misleading or deceptive. However, this will depend on a number of factors and circumstances.
When assessing whether a business has made a misleading or deceptive claim in an advertisement, the Court, quite possibly the Federal Court, will consider all surrounding circumstances in which the claim was made, including any disclaimers. The Court will then look at the use of the disclaimer and assess whether it is prominent, clear and strong enough to become a part of the overall message of the advertisement.
Continue reading this article below the formHow Can You Determine Whether Your Disclaimer is Effective?
When determining whether your disclaimer is effective enough, you should consider:
- where you have placed the disclaimer;
- how obvious it is;
- the wording of the disclaimer;
- how strong the claim is and whether the disclaimer overrides the statement in the advertisement; and
- when you made the disclaimer.
When considering whether or not your disclaimers could be conduct that is likely to mislead or deceive consumers, a good approach is to consider the question from the consumer’s point of view. Would the consumer feel as though they had been misled or deceived by the claims you are making?
Where a Disclaimer Cannot Help You
There are some situations where a disclaimer will not be enough to prevent a statement from being misleading.
For example, there are some words in advertising that often create a strong impression that fine print or disclaimers cannot fix, no matter how prominent.
Some examples of these types of words include:
- free;
- cost-price;
- cost-price plus $5;
- new;
- cheapest;
- sale; or
- discount.
If you are using these words or phrases, you should ask yourself what the word or phrase means not for your business but for the consumer who will hear or see the advertisement. Is it being used with exactly that same meaning, or does it have a different or limited meaning?
For example, if a consumer sees that they can win a free trip, they will not anticipate paying any costs for it. Instead, they are likely to assume that the trip covers flights, accommodation and any other significant costs.
Further, there are some types of advertising mediums where disclaimers may be ineffective. For example, some ineffective disclaimers can include:
- small size font on a billboard, given someone driving down a highway is unlikely to stop and read the disclaimer;
- radio advertisements where disclaimers are mentioned too quickly; and
- television advertisements where disclaimers are mentioned too quietly.
It is also important to understand that some messaging may be so strong and create such an impression on a consumer that even if there is a disclaimer, it is unable to dispel that impression. Therefore, it is important to understand that you cannot just make any claim in advertising because you have a disclaimer. To this end, it is important you comply with the pertinent legal requirements for advertising your particular product or service.
Your business’ brand represents your values, identity and reputation. Learn how to create a successful brand and protect it.
Key Takeaways
While disclaimers and fine print can be useful tools in making sure you are not misleading and deceiving consumers, they are not foolproof. You should never make inaccurate claims in advertising, and you cannot simply rely on a disclaimer to defend yourself against a claim of misleading and deceptive conduct. If you do wish to use a disclaimer, you should make sure it is large enough to be clear and is in close proximity to the claim itself.
If you need assistance to determine if your advertising material is compliant with the pertinent regulations, contact our experienced advertising compliance lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
We appreciate your feedback – your submission has been successfully received.
