Deceptive Advertising In Australia: What Businesses Must Know

Advertising is how you attract customers and grow your brand. But in Australia, there’s a fine line between persuasive marketing and misleading or deceptive conduct.

If your ads overpromise, hide important information or use confusing pricing, you could breach the Australian Consumer Law (ACL) and face enforcement action, refunds and reputational damage.

The good news: with the right processes, you can run effective campaigns and stay compliant. In this guide, we’ll break down what deceptive advertising is, the high‑risk areas to watch, and the practical steps you can take to protect your business.

What Is Deceptive Advertising Under Australian Law?

Deceptive advertising is any marketing that is likely to mislead or deceive consumers. It doesn’t matter whether you intended to mislead or whether anyone was actually misled - if the overall impression is misleading, it may breach the ACL.

Two key ACL provisions apply to most advertising:

• Section 18: a broad prohibition on misleading or deceptive conduct in trade or commerce. For a deeper look, see Section 18 of the ACL.
• Section 29: specific bans on false or misleading representations about things like price, quality, benefits, testimonials, sponsorships and more.

Courts and the ACCC assess ads from the perspective of your target audience and the “overall impression” created by the ad - including headlines, imagery, fine print and the context in which consumers see the claim.

Importantly, fine print and disclaimers won’t “save” an otherwise misleading headline. If the main claim is bold and the qualifying information is buried or inconsistent, you’re still at risk.

It’s also not limited to traditional ads. Your website, social posts, emails, product packaging, point‑of‑sale materials, influencer content and even sales scripts are all caught by the ACL.

To understand how the legal test works in practice, it helps to review the elements of misleading or deceptive conduct and how regulators evaluate likely consumer impressions. For more detail on specific claims, the ACL’s Section 29 prohibitions set out common traps around price, quality, testimonials and more, while the general rule in Section 18 of the ACL captures the overall impression of your marketing.

Common Examples Of Deceptive Advertising

Most breaches happen in a handful of recurring areas. If your marketing touches any of the below, build extra checks into your process.

1) Pricing That Hides The Real Cost

Prices must be clear, honest and complete. Drip pricing (revealing unavoidable fees late in the checkout), headline prices that exclude mandatory charges, or “from $X” claims that only apply to an extremely limited configuration can all mislead.

Be careful with strike‑through “was/now” pricing too - you should be able to substantiate the higher “was” price (e.g. it was actually charged for a reasonable period), and your comparison should be genuine. If you use recommended retail prices (RRPs), make sure they are real recommendations and not inflated. The rules around RRP vs MSRP and comparative pricing are strict, and misleading price advertising is a top ACCC focus. For broader rules on price display, check your approach against advertised price laws.

2) “Limited Time” Or “Limited Stock” Claims

Urgency can drive sales, but it must be real. If you claim a deal ends Friday, don’t extend it for weeks. If you say “limited stock,” ensure stock is genuinely limited and consistent with the scale of your campaign. Bait advertising (advertising a low price with no reasonable stock) is prohibited.

3) Testimonials, Reviews And Endorsements

Testimonials must reflect genuine experiences. Don’t cherry‑pick in a way that misleads (for example, only showing 5‑star reviews while suppressing legitimate negative ones), and don’t edit quotes to the point they no longer reflect the customer’s experience. If you incentivise reviews or use influencers, disclose that clearly and ensure claims remain accurate.

4) Comparative And Superlative Claims

“Best,” “No. 1,” “Cheapest,” or “Better than Brand X” are high‑risk. You need solid, current evidence to back them up. If your comparison only applies to certain products, regions or conditions, your ad must make that clear in a way consumers will actually notice.

5) Health, Safety And Performance Claims

Bold performance statements (“kills 99.9% of bacteria,” “reduces energy use by 50%,” “clinically proven”) require reliable, relevant substantiation. The same goes for health and wellness claims. If you rely on tests or studies, make sure they are methodologically sound and applicable to your product.

6) Environmental Or “Green” Claims

Terms like “sustainable,” “eco‑friendly,” “biodegradable,” “carbon neutral” or “plastic‑free” must be specific and supportable. Vague or broad green claims can mislead if they overstate the environmental benefit or omit important caveats (for example, if the product is recyclable only through limited programs).

7) “Free,” “Bonus,” And “100% Guaranteed”

“Free” can be misleading if the cost is built in elsewhere (e.g. inflated shipping). “Bonus” offers must be genuine additions. If you offer a “100% guarantee,” spell out the conditions and ensure it doesn’t undermine consumers’ rights under the ACL (consumer guarantees apply regardless).

8) Emails, SMS And Telemarketing

Promotional emails and texts sit under both the ACL and Australia’s spam and telemarketing rules. Get consent before sending marketing emails, include a working unsubscribe, and avoid deceptive subject lines or sender details. If you use phone outreach, respect “do not call” obligations. See the essentials in email marketing laws and telemarketing laws in Australia.

9) Contests, Giveaways And “Chance To Win” Promotions

Promos are great for growth, but you must present odds, conditions and eligibility clearly. Avoid over‑promising prizes or burying key conditions in fine print. Depending on the state and prize pool, you may also need permits. Get across the basics in giveaway laws in Australia.

What Are The Penalties For Deceptive Advertising?

The ACCC actively enforces against misleading advertising. Consequences can include:

• Investigations and compulsory information requests.
• Infringement notices (on‑the‑spot fines).
• Court proceedings seeking penalties, corrective advertising, refunds, injunctions and compliance programs.
• Compensation claims or class actions by consumers and competitors.
• Significant brand and reputational damage, especially if conduct is publicised.

Civil penalties under the ACL can be very high for companies and individuals, and the cost of remediation (refunds, re‑runs, rectification) can far exceed the gains from a non‑compliant campaign. In short: it’s far cheaper to get it right before you go live.

How To Avoid Deceptive Advertising: A Practical Checklist

Here’s a step‑by‑step approach you can apply to every ad, from a simple social post to a national campaign.

1) Identify The “Overall Impression”

Look at your ad through the eyes of your intended audience. What is the big promise they’ll take away in the first few seconds? Make sure the primary claim is accurate, complete and consistent with any qualifications.

2) Substantiate Your Claims

Before you publish, gather and keep evidence. For example:

• Comparative price claims: copies of competitor pricing at the time of the ad and the methodology used.
• Performance or “clinically proven”: the studies or test reports, with details showing relevance.
• “Was/Now” or strike‑through pricing: historical sales data showing the “was” price was genuine.
• Green claims: certifications, lifecycle analyses or credible third‑party standards.

No evidence = don’t claim it. If your support is limited or technical, consider softening the wording or adding a clear qualification that consumers will actually notice.

3) Use Clear, Prominent Qualifications

If your offer has conditions, make them clear and unavoidable. Avoid burying key caveats in footnotes or fast voiceovers. Ask yourself: would a reasonable customer still get the right impression if they didn’t read the fine print? If not, rework the main claim.

4) Be Transparent On Price

Present the total price a consumer must pay (including unavoidable fees) as early as practical. Avoid drip pricing, non‑genuine RRPs, or comparisons that don’t apply to the specific product shown. If you’re using RRP comparisons, make sure your approach aligns with RRP rules and general price display obligations.

5) Train Your Team And Partners

Brief everyone who touches your marketing - internal staff, agencies, resellers, and influencers - on what they can and can’t say. Provide written guidance, pre‑approved wording for common claims, and a fast review process for new creative.

6) Implement A Marketing Legal Review

Introduce a simple sign‑off process for higher‑risk campaigns. For example:

• Product launches with performance or environmental claims.
• Comparative or superlative claims (“best,” “cheapest,” “No. 1”).
• Major promotions, “free” offers, or complex pricing structures.
• Campaigns using user‑generated content, testimonials or influencer endorsements.

The bigger the promise, the stronger your substantiation should be - and the more important a legal sense‑check becomes.

7) Keep Records

Maintain a file for each campaign with drafts, approvals, substantiation, stock levels (if advertising limited stock), and dates. Good records make it much easier to respond to complaints or regulator questions.

8) Mind Your Digital Channels

Keep your website accurate and aligned with your ads. If you collect customer data through signups or promotions, ensure your Website Terms and Conditions and Privacy Policy reflect your actual practices and comply with the Privacy Act. For email campaigns, follow the email marketing laws on consent and unsubscribes.

What Contracts And Policies Should You Have In Place?

Strong, tailored documents help set expectations, reduce the risk of complaints, and support your legal position if questions arise. Consider the following:

• Website Terms and Conditions: Set the rules for using your site and outline how offers, pricing, errors and limitations are handled. Clear terms help prevent misunderstandings and manage risk if content changes.
• Privacy Policy: Required if you collect personal information (and good practice regardless). Explain what you collect, how you use it and how customers can opt out.
• Customer Terms (Sale of Goods or Services): Define what you’re selling, pricing and payment, delivery timeframes, warranties, liability limits and how consumer guarantees are handled. Make sure your refund and warranty language aligns with the ACL - for instance, avoid wording that could undermine mandatory consumer rights.
• Competition Terms and Conditions: For giveaways and contests, set clear entry rules, eligibility, prize details, judging criteria, dates and how winners are notified. Align the promotion with giveaway laws and any state‑based permit needs.
• Influencer/Marketing Agreements: Set expectations for claims, required disclosures and approval processes. Include a right to take down non‑compliant content quickly.
• Internal Marketing Policy: A short playbook that explains your sign‑off process, substantiation standards and how to use qualifiers. This helps keep messaging consistent across channels.

If you sell online, it’s especially important that your on‑site copy, pricing displays and policies match your advertising. Conflicts between ads and site terms are a common source of consumer complaints.

FAQs: Quick Answers To Common Questions

Can I Rely On Fine Print Or Disclaimers?

Only to clarify, not to correct. If the main claim is misleading without the qualifier, the ad may still breach the ACL even if the fine print is accurate. Make key conditions clear and prominent.

Is “Puffery” Allowed?

Yes - obviously exaggerated or vague claims that no reasonable person would take literally (e.g. “the world’s best coffee”) are generally permitted. But as soon as a claim can be tested or verified, you’ll need evidence.

What If A Third Party (Like An Influencer) Posts Something Misleading?

You can be responsible for representations made on your behalf. Provide clear guidance, require pre‑approval of scripts or captions where possible, and monitor posts so you can correct issues quickly.

Do I Need Legal Review For Every Ad?

Not necessarily. Many routine ads can run on a checklist basis. But if a campaign includes comparisons, bold performance claims, “free” offers, complex pricing or environmental claims, build in a legal sense‑check before launch.

Key Takeaways

• Deceptive advertising is about the overall impression - if your marketing is likely to mislead, it can breach the ACL even without intent.
• Common risk areas include pricing, urgency claims, testimonials, comparative or superlative statements, environmental claims, and promotions.
• Substantiate your claims, use clear and prominent qualifications, and ensure total prices and conditions are transparent.
• Train your team and partners, implement a simple legal sign‑off for high‑risk campaigns, and keep good records.
• Align your ads with on‑site copy, pricing displays and customer terms, and make sure your promotions comply with giveaway rules and email marketing laws.
• Understanding the ACL’s general prohibition in Section 18 and specific bans in Section 29 helps you structure marketing that’s both effective and compliant.

If you’d like a consultation on deceptive advertising compliance for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.