False Charity Claims: What Can The Law Do?

“$1 from every sale goes to charity.” “All proceeds will be donated.” “We’re raising funds for disaster relief.”

These statements are common in Australian marketing and fundraising - and when they’re accurate, they’re a great way to support important causes and build trust with your audience.

But if the promise isn’t true (or can’t be verified), it can cross the line into false or misleading conduct. That’s a serious legal risk under Australian law, whether you’re a registered charity, a social enterprise, or a business partnering with a charity.

In this guide, we’ll explain what counts as a false charity claim, which laws apply in Australia, what regulators can do, and the practical steps you can take to promote causes confidently and compliantly.

What Counts As A False Charity Claim?

A “false charity claim” is any statement (written, verbal, online or on packaging) that misleads people about a charitable affiliation, purpose, or the amount or destination of funds raised.

Common examples

• Stating a donation amount or percentage that isn’t actually donated (e.g. promising “100% of proceeds” when only net profits are donated, or no donation is made at all).
• Implying you’re a registered charity or ACNC-registered when you’re not, or suggesting a partnership that doesn’t exist.
• Exaggerating the impact of donations (e.g. “your $10 feeds 10 families” when the figure is unsubstantiated).
• Failing to disclose material conditions (e.g. caps, minimum spend, or limited campaign dates that significantly reduce the donation value).
• Using a charity’s name or logo without permission, creating a false impression of endorsement.

Why intent doesn’t save you

Under the Australian Consumer Law (ACL), a claim can be misleading even if you didn’t mean to mislead. If your message gives consumers a wrong impression, you can still be liable. Clarity, accuracy and evidence are essential - good intentions aren’t enough.

Which Australian Laws Apply To Charity Claims?

Several legal frameworks can apply at once - and you need to comply with all of them that are relevant to your activities.

Australian Consumer Law (ACL)

The ACL applies to most businesses and fundraising promotions involving consumers. Two key provisions are crucial:

• Section 18 (misleading or deceptive conduct): broadly prohibits conduct that misleads or is likely to mislead.
• Section 29 (false or misleading representations): specifically targets false claims about sponsorships, affiliations, and benefits (including donations).

If you publicise a charitable connection, donation amount, or impact, you need to be able to substantiate it.

Fundraising and charity regulation

Many charities are regulated by the Australian Charities and Not-for-profits Commission (ACNC). In addition, most states and territories have fundraising laws or codes that can require authorisations, disclosure wording and record-keeping for appeals to the public.

If you’re a business running a fundraiser, you may also need permission from the charity and, in some jurisdictions, to comply with state fundraising requirements for the duration of your appeal (for example, specific disclosures on materials and receipts).

Promotions, competitions and raffles

Cause-related promotions often involve giveaways or prize draws to boost engagement. These activities can trigger rules beyond the ACL, including game-of-skill/chance permits and raffle regulations (which are state-based). If your appeal involves a randomly drawn prize or ticket sales, check the relevant raffle laws in Australia and your state’s requirements before you launch.

Privacy and direct marketing

If you collect personal information from donors or campaign participants (names, emails, payment data), you’ll need clear data practices and, in many cases, a compliant Privacy Policy. If you plan to email updates or future appeals, make sure your messages comply with email marketing laws (consent, identification and unsubscribe).

What Can Regulators Do If Claims Are False?

Several regulators can take action, depending on the conduct and jurisdiction. The most active for consumer-facing claims is the Australian Competition and Consumer Commission (ACCC), which enforces the ACL. State consumer law bodies and fundraising regulators may also act.

Penalties and remedies under the ACL

For false or misleading representations, the Federal Court can order:

• Injunctions to stop the conduct and corrective advertising to fix public impressions.
• Compensation for affected consumers (e.g. refunds or loss recovery in appropriate cases).
• Compliance programs, enforceable undertakings, and monitoring.
• Pecuniary penalties: for corporations, the greater of $50 million, three times the benefit, or 30% of adjusted turnover during the contravention period; for individuals, up to $2.5 million.

Regulators can also issue substantiation notices (requiring you to prove your claims) and infringement notices for certain breaches.

Fundraising law consequences

Breaches of state fundraising requirements can lead to administrative sanctions (e.g. suspending appeals), fines, and in serious cases, prosecutions. Charities may also face ACNC compliance action if conduct breaches Governance Standards (e.g. failing to act lawfully and in good faith).

Reputational damage

Even if a breach isn’t prosecuted, public allegations about “charity washing” can cause lasting reputational harm, lost sales and donor distrust. From a risk perspective, rigorous compliance and documentation are non-negotiable.

What Should Businesses And Charities Do To Stay Compliant?

If you’re planning a cause-related marketing campaign or a public appeal, a few proactive steps will dramatically reduce your legal risk and build stakeholder trust.

1) Be precise and truthful with wording

• Say exactly what is being donated: a fixed dollar amount per unit, a percentage of the sale price, or net profit after specific costs (define those costs).
• Include any caps, timeframes or thresholds prominently (not hidden in fine print).
• Use the charity’s correct legal name and ACNC registration status, and only use their logo with written permission.

2) Keep strong records and be able to prove claims

• Document the basis for all statements (e.g. accounting for “proceeds”, calculation models, donation schedules).
• Retain written approvals and the agreement with the charity, plus evidence of transfers.
• Create a simple internal checklist to review campaign copy, web pages, packaging and social posts before they go live.

3) Put your agreements in writing

When you collaborate with a charity, formalise roles, approvals, brand usage, disclosures and reporting. A tailored Collaboration Agreement or Sponsorship Agreement can set clear expectations and reduce disputes.

4) Use and maintain the right online documents

• Your website should feature up-to-date Website Terms and Conditions, donation terms (if applicable), and a clear Privacy Policy.
• If you collect personal information at events or via forms, add a concise privacy notice explaining what you collect and why.

5) Build a quick review pipeline

Marketing teams move fast. Create a lightweight legal review step for fundraising copy and visuals, and train your team on what “misleading” looks like under the ACL. When in doubt, a short consult with a consumer law expert can save a campaign.

Running Promotions And Fundraisers: Extra Rules To Watch

Charity-aligned promotions can involve specific compliance obligations depending on the format. Here are common scenarios and what to consider.

“X% Of Proceeds” Sales Campaigns

• Define “proceeds”: Is it a percentage of the sale price or of profit? Consumers usually read “proceeds” as the full price, so be unambiguous.
• Disclose caps or conditions upfront: “Up to $50,000 total”, “Applies to purchases made 1-30 June”, etc.
• Coordinate reconciliation dates with the charity and confirm payment method, reporting, and public acknowledgements.

Prize Promotions, Giveaways And Raffles

• Giveaways tied to charitable messaging still need to comply with giveaway laws in Australia (e.g. clear terms, fair conduct, prize delivery).
• If you’re running a raffle or selling tickets, check whether permits are required under raffle rules in the relevant state, and whether only certain organisations can run raffles.
• State exactly how entry supports the cause - entry fees vs donations - and keep the two distinct in your terms and receipts where applicable.

Social Media Appeals And Email Drives

• Keep claims consistent across all channels; screenshots last. What you say in stories and captions must match the detail on your landing page.
• If you’re emailing supporters, ensure messages meet email marketing laws (consent and easy unsubscribe).
• If you collect new supporter data through a campaign microsite or form, ensure your Privacy Policy covers that collection and use (including sharing limited information with the charity partner if applicable).

Using A Charity’s Name Or Logo

• Always obtain written permission and follow brand guidelines. Your agreement should spell out where and how logos appear and when usage must stop.
• Don’t imply endorsement or partnership beyond the scope agreed. Over-claiming affiliation can breach both the ACL and intellectual property rights.

Disaster And Emergency Appeals

In crisis situations, people donate quickly. That makes clear disclosures even more important. Specify who will receive funds, timelines for transfer, and how funds will be used (if you’re making representations about purpose). Avoid emotional but ambiguous claims that could mislead donors about impact or timing.

How To Respond If An Issue Arises

Mistakes happen. What matters next is transparent, prompt action that focuses on donors and compliance.

• Pause the campaign and review all statements, sales data and donation calculations.
• Engage with the charity partner and agree on a remediation plan (e.g. top-up payments, corrected messaging).
• Publish a clear correction and apology if people could have been misled, and contact affected customers directly if appropriate.
• Implement a compliance plan: team training, approval workflows, and a pre-launch checklist to prevent repeat issues.
• Where there’s significant risk of an ACL breach, seek advice early from a consumer law specialist.

Key Takeaways

• False charity claims include inaccurate statements about donations, affiliations or impact - they can breach the Australian Consumer Law even without intent.
• Expect overlap between the ACL, ACNC obligations, and state fundraising rules; you must comply with all that apply to your fundraiser or promotion.
• Regulators can seek injunctions, corrective notices, compensation and significant penalties; reputational damage can be just as costly.
• Be specific and truthful, secure written permission from charity partners, and keep strong records to substantiate every claim.
• Use clear online terms, a current Privacy Policy, and compliant Website Terms and Conditions; build a simple approval workflow for marketing content.
• Promotions with giveaways or raffles may trigger extra rules - check giveaway and raffle laws in your state before launching.
• If in doubt about your wording or campaign structure, a quick check with a consumer law expert can help you avoid breaches and maintain donor trust.

If you’d like a consultation on planning or reviewing charity-related campaigns for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.