Reading time: 5 minutes

If your business deals with customers or other businesses on a regular basis, it is important that you understand your obligations under the Australian Consumer Law (ACL). The ACL aims to protect consumers and competitors in trade and commerce. One of the key provisions of the ACL prohibits misleading or deceptive conduct. Complaints about misleading and deceptive conduct can be made by: 

  • consumers;
  • the regulator of the ACL, the Australian Competition and Consumer Commission (ACCC); and
  • other competing businesses. 

This article sets out:

  • what misleading or deceptive conduct is; and 
  • how it can apply in practice. 

The Elements of Misleading Conduct

Misleading or deceptive conduct is where a person engages in conduct in trade or commerce that is misleading or deceptive or is likely to mislead or deceive.

‘In trade or commerce’ has a broad definition. 

For example, both charities and social media ‘influencers’ may be considered to be acting in trade or commerce. 

Misleading or deceptive conduct can occur in situations including:

  • advertising products with incorrect pricing;  
  • inaccurate comparative advertising (i.e. making promotional statements that compare your goods or services to those of your competitors);
  • false statements made by sales representatives before entering contracts; or
  • using small and unnoticeable disclaimers which consumers are unlikely to see.

Am I Being Misleading?

When determining whether conduct is misleading or not, you should take all surrounding circumstances into account. 

For example, if you misquoted the price of your services to a customer but quickly corrected yourself, all of the statements you made in this context would be considered. 

Generally, conduct that merely leads to confusion or causes someone to wonder will not be considered misleading. The key question is whether the conduct induces, or is capable of inducing, a person into error. 

An intention to mislead is not necessary in misleading and deceptive conduct. This means that a business can engage in misleading conduct even if it is acting reasonably and honestly. Of course, if a business intends to mislead their consumers, it may be easier to prove that their conduct has that effect.

Some Common Mistakes 

There are a number of common mistakes businesses make regarding misleading and deceptive conduct. Several of these common mistakes are set out below. 

1. Deception Through Silence

It is important to remember that you may be misleading because of what you fail to say, as well as what you say. Businesses can mislead consumers by failing to give relevant information. 

For example, your silence may be misleading where: 

  • a consumer is unlikely to have purchased a product had they known certain information; or 
  • a change in circumstances means certain information you already provided is no longer correct. 

Whether silence is misleading will depend on the particular circumstances and whether the consumer had a reasonable expectation that you would disclose the relevant information.

2. Actions of Third Parties

Depending upon the facts and circumstances of the situation, there is a risk that you could be held responsible for material published by third parties on your website or social media page that has misled and deceived consumers. 

For example, a consumer may leave a review on your Facebook page saying that your cleaning product is cheaper and more environmentally friendly than your competitors. If this is incorrect, you may be liable for misleading and deceptive conduct. 

Where it is within your control to do so, you should regularly check that any information provided by your consumers or other third parties on your pages is accurate. If you find inaccurate information, you should remove it immediately. You may wish to implement policies to regularly review user-generated content to ensure it is not misleading. 

3. Disclaimers

Using a disclaimer does not excuse any misleading statements you have made. Instead, a disclaimer will be considered as part of the surrounding circumstances when assessing whether a statement is misleading or deceptive. 

For example, a consumer is unlikely to be misled if an advertisement is promoting a store sale and there is a clear and prominent disclaimer stating that the sale is running for a period of two weeks only. However, a consumer could be led into error if the advertisement reads ‘absolutely everything in store is on sale’ and there is a tiny disclaimer on the bottom of the advertisement stating that ‘only men’s shirts are on sale’. 

Whether a disclaimer is effective will depend on how likely a consumer is to see and understand it. This often depends on factors such as placement, font colour, size and the strength of the misleading statement. 

Key Takeaways

The ACL provides various remedies to consumers for misleading or deceptive conduct, including compensation. The ACCC can also order businesses to pay penalties and undertake rehabilitative action such as ACL training to ensure they do not engage in further misleading conduct. 

This conduct is interpreted broadly and is taken very seriously by both the courts and the ACCC. Therefore, it is important that you understand your obligations and pay close attention to your business practices to ensure you are not making any misleading statements. This is particularly important when considering your marketing material, such as website content, TV advertisements and digital marketing. 

If you want to confirm that your business activities do not breach the ACL, or you think that another business is being misleading, contact LegalVision’s consumer lawyers on 1300 544 755 or fill out the form on this page.


Everything You Need to Know about SaaS Agreements

Thursday 7 April | 11:00 - 11:45am

Understand which contracts will protect your SaaS contract from risk, and how. Register for free today.
Register Now

What to Consider When Buying a Tech or Online Business

Wednesday 13 April | 11:00 - 11:45am

Learn how to get the best deal when buying a tech or online business. Register for our free webinar today.
Register Now

Corporate Governance 101: Responsibilities for New Directors

Wednesday 27 April | 11:00 - 11:45am

If you are a new company director, join our free webinar to understand your legal compliance obligations. Register today.
Register Now

Rogue Directors and Business Divorces: How to Remove a Director

Thursday 28 April | 11:00 - 11:45am

Removing a board director is not simple. Join our free webinar to learn how to handle rogue directors. Register today.
Register Now

Employment Essentials for Tech Businesses

Thursday 5 May | 11:00 - 11:45am

Protect your tech business and your employees by understanding your employment legal obligations. Register for our free webinar today.
Register Now

How to Protect and Enforce Your Trade Mark

Wednesday 11 May | 11:00 - 11:45am

Protect your business’ brand from copycats and competitors. Register for this free webinar to learn how.
Register Now

How Franchisors Can Avoid Misleading and Deceptive Conduct

Wednesday 18 May | 11:00 - 11:45am

Ensure your franchise is not accused of misleading and deceptive conduct. Register for our free webinar today.
Register Now

New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects

Wednesday 25 May | 10:00 - 10:45am

If you operate in the crypto space, ensure you understand the Federal Government’s proposed licensing and regulation changes. Register today for our free webinar.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer