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Who wants to get caught for misleading or deceiving their customers? Not you – it can have a devastating impact on your business and damage your reputation. In today’s fast‐paced market in 2025, staying up to date with the latest legal guidelines is essential.
Of course, most businesses never set out to purposefully engage in misleading or deceptive conduct, but if you’re not aware of the rules then you put your business at risk. Reviewing articles such as our guide on legal requirements for starting a business can help keep you informed.
In this article, we’ll go through some of the key things to know about misleading and deceptive conduct, along with practical tips to make sure your advertising and communications are crystal clear in 2025.
What is Misleading and/or Deceptive Conduct?
Section 18 of the Australian Consumer Law (ACL) prohibits businesses from engaging in conduct that is misleading or deceptive. Essentially, if your conduct – whether through words, actions or even omissions – is likely to mislead or deceive consumers about the quality, value, price, age, benefits, or other characteristics of the goods and services you provide, you may be breaching the ACL.
Misleading and deceptive conduct can include any act, such as making false statements, predictions, or even non‐verbal cues, as well as misleading advertisements and promotions. It can even include staying silent when you should have disclosed important details.
If you do not comply with the consumer guarantees, then you may also open yourself up to claims of misleading and deceptive conduct. For more on how to align your business with consumer guarantees, have a look at our article on how your business can comply with consumer guarantees.
Consequences of Misleading or Deceptive Conduct
Before a consumer can claim that your business engaged in misleading or deceptive conduct, they must prove that your actions led them to draw a false conclusion which resulted in loss or damage. This can be a challenging process, but if they succeed, the consequences can be severe.
Once a consumer proves that you engaged in misleading and deceptive conduct, this could have the following consequences for your business:
- Having to pay compensation for losses suffered by your consumer
- Potential disqualification or sanctions that could restrict your ability to operate
As you can see, the penalties can be very serious. Staying vigilant and ensuring all of your business communications are transparent and accurate is key.
Below are some ways to minimise the risk of accidentally engaging in misleading or deceptive conduct.
8 Tips on How to Avoid Engaging in Misleading or Deceptive Conduct
We’ve put together some general principles on how to minimise the risk of inadvertently misleading your consumers. Every business is different, so it’s important to tailor these tips to your own situation.
1. Words can be misleading
Words have multiple meanings, so be careful when you use terms like ‘free’ or ‘bonus’. If something is not technically free, make sure your language clearly conveys any conditions or fees associated with it.
2. Your intentions don’t really matter
Whether or not you were actively trying to mislead isn’t the key point under the ACL. Even if you honestly believed you were being truthful, you could still be liable if a consumer is misled.
3. Just because you’re literally telling the truth doesn’t mean you aren’t being deceptive
For example, if you advertise tickets for a ‘Madonna concert’ for $500, consumers expect the real deal. Using technically true but misleading statements can easily put you in hot water.
4. Context is important
Don’t isolate a phrase or testimonial from its original context to create a false impression. If a customer’s review contains both positive and critical comments, cherry-picking only the positive remark as a glowing endorsement could be misleading.
5. Sometimes you need to say something
If there are clearly relevant facts or shortcomings about your product or service, silence isn’t golden. Failing to disclose important information can be just as misleading as stating falsehoods.
6. Be careful when making promises about the future
Promises based on uncertain future events can lead customers astray. In 2025, with rapid changes in the market, ensure that any forward-looking statements are clearly qualified with all relevant conditions and limitations.
7. “But they didn’t ask” isn’t an excuse
Even if a consumer didn’t proactively seek out details, you’re still obligated to provide clear and accurate information. Ignorance on the part of the consumer does not absolve you of responsibility.
8. The fine print in your T&Cs doesn’t solve everything
Disclaimers and exclusion clauses written in fine print are only effective if they are prominent and clearly communicated. Courts routinely disregard attempts to contract out of your obligations under the ACL, so explicit transparency is always best.
Advertisements – Can They Be Misleading and Deceptive?
One of the main areas where businesses get caught for misleading or deceptive conduct is in their advertising. No matter what industry you’re in, advertising is a key part of your business strategy, but it must always comply with the ACL.
Here are some key considerations regarding advertisements that may mislead consumers:
1. Misleading Statement, or is it just Puffery?
Puffery refers to exaggerated statements that no reasonable person would take literally. While puffery can be used as a defence, if a statement is both false and reasonably believable, it could be deemed misleading. For instance, while the famous claim “Red Bull gives you wings” is generally recognised as puffery, legal battles over such statements remind us to tread carefully.
2. Small Print and Asterisks
You can’t simply hide key details in small print or obscure asterisks. The extra information must be sufficiently prominent so that consumers are aware of any limitations or conditions.
3. Disparaging Advertising
If you compare your product or service to that of a competitor, you must make sure the information is presented honestly and accurately. Omitting significant details that could mislead consumers about the true advantages of your offering is not acceptable.
4. Parody Advertising
Humour and parody can add flair to your ads, but even a tongue-in-cheek reference must not distort the facts. Ridiculing a competitor’s advertisement is fine as long as all key information remains accurate and complete.
5. Two Price Advertising
Displaying a “was $100, now $50” message is only acceptable if the original price was genuine and reflective of past sales for a reasonable period. Misrepresenting price history can easily mislead consumers and attract regulatory scrutiny.
It’s important to remember that misleading conduct doesn’t always involve blatant falsehoods. Sometimes, omitting essential details or presenting information in a skewed manner can also mislead. Staying informed about updated guidelines from bodies like the Australian Competition and Consumer Commission is crucial – for further insights, consider our article on what regulations affect your corporation.
What to Take Away…
The big question to keep in mind is: Would a reasonable person be misled or deceived by what you’re saying or doing?
Common sense is a good guiding principle, but it’s equally important to be aware of the current legal framework. With evolving consumer expectations in 2025, ensuring clear and transparent communication can protect your business from costly legal issues.
Advertising alone is an area with numerous specific rules under the ACL. Make sure you regularly review and update your practices, and don’t hesitate to seek professional advice to tailor these strategies to your business.
We know this is a lot of information about misleading and deceptive conduct. But don’t be discouraged – there are plenty of resources available, and if you need further help identifying the relevant laws for your business, feel free to chat to us for a free consultation.
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