Advertising and Marketing Series: Use Truth In Advertising – It’s That Simple

Australia’s Consumer Law (ACL) and its watchdog, the Australian Competition and Consumer Commission (ACCC), support the “sound and ethical business of telling the truth.” The ACL’s provisions promote fair business practices to protect consumers and strengthen relationships between consumers and businesses. Notably, state and territory fair trading legislation supports and mirrors these provisions that apply to all businesses.

Key Take Aways

When advertising and selling products and services, you should remember not to provide the other party with the wrong impression or idea about the situation. This is especially important when considering television advertising that contains different elements such as visual, written and verbal elements and combine to produce the overall impression.

What Conduct Breaches the ACL?

To fall foul of section 18 of the ACL, you do not need to intend to act in a misleading or deceptive way. The intention is irrelevant when determining whether or not an individual or business has breached section 18.

Likewise, whether the conduct actually misleads anyone is irrelevant. In our experience, the ACCC is particularly unimpressed when businesses that they consider to have mislead and deceived explain away their conduct by saying that if their advertisement did mislead anyone, the matter would be cleared up once the consumer made further enquiries.

The ACCC is concered with creating a compliance culture that will ensure that businesses act fairly and truthfully in their dealings with consumers at all times. Section 18 tells businesses that they must not engage in conduct that misleads or deceives, or is likely to mislead or deceive customers or other business through:

• advertising,
• print, radio, television or billboard,
• printed brochures,
• product descriptions,
• packaging,
• contract terms,
• selling presentations,
• telephone conversations, or
• any other type of personal discussions, negotiations or any other businesses communication.

It is of course also common sense that leaving something out can be untruthful. Omissions can then amount to misleading and deceptive conduct in the right circumstances.

What Does “Misleading and Deceptive” Mean?

The courts have, over the years, interpreted the phrase “misleading or deceptive” very broadly. They tend to focus on the word “mislead” which is a broder category of conduct than deception. Misleading someone includes leading them into error by, for example:

• Lying to them;
• Leading them to a wrong conclusion;
• Creating a false impression;
• Leaving out (or hiding) important information; and
• Making false or inaccurate claims

In Short…

Whether something is misleading or likely to mislead in light of all the circumstances of a particular case, and what the sender of the message meant to do is irrelevant.

So, what principles do you need to consider when creating an advertising campaign? We will step through these in our next article that puts advertising promotions under the microscope.

Questions? Get in touch with LegalVision’s advertising, marketing and consumer lawyers on 1300 544 755.