Misleading and deceptive conduct

The Australian Consumer Law (ACL), section 18, broadly prohibits misleading or deceptive conduct in trade or commerce. (Chapter 2, Part 2-1).

This conduct can include actions and statements, such as misleading:

  • advertisements
  • promotions
  • quotations
  • statements and representations by a person.

A business is likely to breach the ACL if they create a misleading overall impression with the consumer about price, quality or value. A breach of law can occur even if the business did not mean to mislead a consumer about a product or service.

Silence

A business can breach the ACL by failing to disclose important details, the correct details or not passing on important facts that are relevant to the consumer’s decision.

Disclaimers and small print

Businesses cannot use small print or disclaimers to excuse misleading or deceptive conduct.

However, consumers cannot ignore disclaimers that are prominently displayed. Such disclaimers may be enough to protect the business, depending on the circumstances.

Predictions and opinions

Promises, opinions and predictions can be misleading if the person making the statement:
  • knew it was incorrect or untrue
  • did not care whether it was true or not
  • had no reasonable grounds for making it.

A court will decide whether a prediction or statement was misleading or deceptive.

Exceptions for information providers

Media organisations such as radio stations, television stations, and newspaper and magazine publishers, will be liable if they publish a misleading or deceptive advertisement if they knew it to be misleading. However, they will not be responsible if they:

  • are in the business of publishing or arranging for the publication of advertisements
  • received the advertisement in the ordinary course of this business
  • did not know, and had no reason to suspect, that the advertisement was misleading or deceptive.

Penalties

Misleading or deceptive conduct may lead to civil remedies including injunctions, declarations, damages, compensatory orders, orders for non-party consumers and non-punitive orders.

Consumer protection agencies may issue public warning notices against traders who have been given court orders for misleading and deceptive conduct.