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Every business needs to understand its obligations under Australian Consumer Law (ACL). One of the core requirements of the ACL is to display the correct advertised price for your goods. Failing to do so could not only put you in breach of legal regulations but also damage your reputation as a transparent and trustworthy business in 2025.
Therefore, it’s critical to adhere to the key aspects of the ACL. This compliance not only ensures that you meet legal standards but also demonstrates to your customers that you value honesty and clarity in every transaction.
In this article, we will cover:
- False advertising
- What the Australian Consumer Law is
- Misleading and deceptive conduct
- Complying with fair advertising prices
- Misrepresentation
False Advertising In Australia
False advertising is strictly prohibited by the ACL. This occurs when a business makes a statement that is completely untrue about a product or service. Such inaccuracies can involve details about:
- Whether the item is brand new or second hand
- How and where the product was made
- The quality of the item
- The manufacturing process
- The materials or ingredients used
- Any claims regarding endorsements or support from a particular group, organisation, or individual
If any information leads a consumer to believe something untrue about a product, it is deemed false advertising—a practice that can attract significant penalties under the ACL.
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Example Ben owns a local burger joint. In response to the growing demand for vegan meals, Ben advertises a new burger as “100% Vegan”. In reality, while the burger patty and other components are entirely plant-based, the cheese used is traditional dairy cheese. Consequently, Ben’s claim that his new burger is 100% vegan would be regarded as false advertising and a breach of the ACL. |
What Is The Australian Consumer Law?
The ACL is the principal legal framework designed to protect consumers from unfair business practices. It sets out clear requirements to ensure that consumers receive accurate information and fair treatment in the marketplace.
The provisions of the ACL are contained in Schedule 2 of the Competition and Consumer Act 2010. The law addresses several key areas to help guarantee that consumers are treated fairly, including issues such as:
- Unfair contract terms
- Refunds, repairs and exchanges
- Compensation
- Consumer guarantees
- Warranties and liabilities
What Does The ACL Say About Advertised Prices?
The ACL mandates that prices must be displayed in a manner that is entirely transparent to customers—whether in-store or online.
This means that the correct price must be shown clearly and understandably. In some cases, particularly in supermarkets or for products sold in bulk, it is also necessary to include the unit price. For example, if you’re a grocer, ensure that both the total price and the unit price are prominently displayed to avoid any consumer confusion.
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Example A bookstore advertises a popular bestseller at $20. However, in much smaller print below the price, it adds “after spending $30”. At first glance, the book appears to be on sale for $20. In reality, the discounted price is only available if a customer spends $30, meaning the pricing is not clearly communicated—a potential breach of the ACL. |
What Is Misleading And Deceptive Conduct?
Misleading and deceptive conduct covers actions, omissions, statements, or body language that may cause a customer to believe something false about a product or service. The definition is intentionally broad, meaning even subtle cues can lead to a breach.
Even a simple nod or casual comment can be construed as misleading if the customer reasonably interprets it as a factual representation. It’s essential for businesses to communicate transparently and ensure that every claim made is fully substantiated.
Maintaining clear and open communication not only helps you avoid legal pitfalls but also builds long-term trust with your customers.
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Example Hannah is purchasing a new mattress because she suffers from severe dust mite allergies. While at the store, she inquires whether a particular mattress is hypoallergenic. The sales representative assures her, saying, “You won’t have any problems with our mattresses.” Interpreting this as a guarantee of hypoallergenic quality, Hannah buys the mattress. A few days later, she discovers from the store manager that the mattress is not hypoallergenic at all. Although the representative’s statement wasn’t an outright lie, it misled Hannah into believing something that wasn’t true. |
How Can I Comply With Fair Advertising Practices?
Ensuring fair advertising is relatively straightforward—display the correct price clearly and accurately on all product labels, in-store signage, and your business website. If any promotional offers are in place, make sure the original price is still visibly marked to avoid any possible confusion.
It’s important to understand that intention is not a defence when it comes to pricing transparency. If a customer is led to reasonably believe that a particular fact about a product is true, then that customer has been misled regardless of the seller’s intent.
To achieve this level of clarity, consider the following practices:
- Ensure your sales representatives are thoroughly trained and well-informed.
- Clearly list all product ingredients or components—whether on menus or in-store displays.
- Provide detailed product information on your business website, where customers can easily access it. For more guidance, refer to our guide to online business privacy.
- Be readily available to answer customer queries regarding product details or pricing.
What Is Misrepresentation?
Misrepresentation occurs when a customer is induced to enter into a contract based on false information. Remember, when a customer agrees to purchase a product, they are entering into a legally binding contract.
Misrepresentation is distinct from other false claims because it is based solely on factual assertions. For misrepresentation to occur, two key elements must be present:
- The statement was presented as a fact rather than an opinion or prediction.
- The consumer made the purchase based on that false statement.
There are three types of misrepresentations:
- Innocent: There was no intention to mislead the consumer.
- Negligent: The consumer was misled due to a lack of due care in presenting accurate information.
- Fraudulent: There was a deliberate intent to deceive the consumer.
To avoid any form of misrepresentation, ensure that all customers are fully informed about the products they are purchasing. Clear communication is key to maintaining trust and compliance under the ACL.
Emerging Trends in Fair Advertising (2025)
As we progress through 2025, digital transformation continues to reshape how businesses advertise their products. With an ever-growing number of consumers shopping online and via mobile platforms, it is more critical than ever to maintain transparency in pricing information. Updated ACL guidelines now place additional emphasis on dynamic pricing models and personalised offers. Businesses must ensure that any variations or conditions attached to advertised prices are presented in a clear and unambiguous manner.
Innovative retail strategies—including the use of artificial intelligence in tailoring offers—are on the rise. However, with these advances comes increased scrutiny. It is essential to continually review your digital platforms and sales practices to guarantee ongoing compliance with consumer law. For further insights on aligning your business practices with legal requirements, check out our Legal Aspects of Starting a Small Business guide and our Consumer Law resources.
Staying ahead in 2025 means not only adapting to technological innovations but also ensuring that every change reinforces your commitment to fair, transparent advertising. This proactive approach will help mitigate legal risks and foster lasting customer trust.
Key Takeaways
Businesses must take care to ensure that customers receive all the necessary information before making a purchase, thereby reducing the risk of legal repercussions. To summarise what we’ve discussed:
- Advertised prices must be clearly and accurately displayed in accordance with the ACL.
- Misleading and deceptive conduct is illegal—ensure every communication is transparent.
- False advertising undermines consumer trust and can result in serious penalties.
- Misrepresentation, whether intentional or inadvertent, can have severe legal consequences.
If you would like a consultation on ensuring your advertising practices are fully compliant or need assistance with your business’s legal documents, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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