One of the most misunderstood areas of advertising law is the effect of disclaimers on the Australian Consumer Law (ACL). Commonly, advertisements use disclaimers or fine print through the use of an asterisk (*) or the words, “conditions apply”. It is crucial to note that your business cannot rely on disclaimers as an excuse for misleading or deceptive conduct. This article will explain when you can use effectively and when they may be misleading and deceptive conduct.

What is Misleading and Deceptive Conduct?

The ACL prohibits you from engaging in conduct that is likely to mislead or deceive consumers.

For example, you cannot make false claims in your advertising that could induce a consumer into purchasing your goods or services. You also 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. 

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 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 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.

When determining whether you disclaimer is effective enough, you should consider:

  • where you have placed the disclaimer displayed; 
  • how obvious it is;
  • the wording of the disclaimer; 
  • how strong the claim is and whether it overrides the statement in the advertisement; and
  • when you made the disclaimer.

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, including:

  • free;
  • cost-price;
  • cost-price plus $5;
  • new;
  • cheapest;
  • sale; and
  • 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 that 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, someone driving down a highway who sees a billboard is unlikely to be able to stop to read the fine print. So, if you are planning on using outdoor advertising, you should not rely on disclaimers. 

Further, when it comes to TV and radio advertisements that have limited time, voice-overs that are too quick or too quiet are unlikely to properly outline any disclaimers.

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. 

Key Takeaways

While disclaimers and fine print can be a useful tool 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 on ensuring that your advertising is compliant, contact LegalVision’s advertising and marketing lawyers on 1300 544 755 or fill out the form on this page.

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