Misleading Advertising Under the Competition and Consumer Act: Legal Insights

Great marketing helps customers find you - but in Australia, there are firm rules around what you can say in your ads and on your website.

If a claim is confusing, missing key conditions or simply not true, it can fall foul of the Competition and Consumer Act 2010 (Cth) and the Australian Consumer Law (ACL).

In this guide, we’ll unpack what counts as misleading advertising, highlight common risk areas for small businesses, and share a practical compliance checklist so you can promote your products confidently and legally.

Let’s dive in.

What Counts As Misleading Advertising Under Australian Law?

In Australia, misleading advertising is regulated by the Australian Consumer Law (ACL), which sits in Schedule 2 to the Competition and Consumer Act 2010 (Cth).

The ACL prohibits conduct that misleads or is likely to mislead or deceive. This is the well‑known general rule in section 18 of the ACL.

There are also specific rules about false or misleading representations - for example about price, quality, sponsorship, testimonials and “was/now” savings - in section 29 of the ACL.

It’s not just outright lies

Your ad doesn’t have to be intentionally false to break the law. If the overall impression is likely to mislead an ordinary consumer, it can still be unlawful, even if individual sentences are technically correct.

Think of this as a “big picture” test: how would a reasonable customer understand your ad in context?

Silence or fine print can mislead

Leaving out important conditions or burying them in fine print can also mislead. If you headline “Free delivery” but the only way to get it is to meet complex thresholds, the overall impression may be deceptive.

Common examples

• “Was/Now” pricing that suggests a discount but the higher price was not genuinely charged for a reasonable period.
• “Limited stock” or “today only” urgency claims that aren’t authentic.
• Unverified testimonials, influencer posts without clear disclosure, or star ratings boosted by removing negative reviews.
• “Made in Australia” or sustainability claims that can’t be substantiated.
• Conditions and exclusions hidden in dense fine print that customers wouldn’t reasonably notice.

For a deeper dive on how courts assess these issues, it’s worth understanding the elements of misleading or deceptive conduct.

Key Prohibitions: The Rules That Matter For Your Ads

Here are the ACL provisions businesses most often grapple with when marketing.

1) Section 18 - Misleading Or Deceptive Conduct

This is the broad rule. If the overall impression could mislead an ordinary consumer, it may breach the ACL. It applies to websites, social media, email marketing, packaging, sales calls and in‑store signage.

2) Section 29 - False Or Misleading Representations

This provision lists specific “no-go” areas, including representations about:

• Price, discounts and savings
• Performance characteristics, quality or benefits
• Sponsorship, approval or affiliation
• Place of origin (e.g. “Australian-made”)
• Testimonials and reviews

Because it’s specific, section 29 is frequently used by the regulator in pricing and promotions cases. If you run sales or comparative ads, review your approach against section 29 and the principles in advertised price laws.

3) Other ACL rules that often overlap

• Unconscionable conduct (e.g. pushing unfair pressure tactics).
• Product safety and mandatory information standards (particularly for high‑risk products).
• Warranties and refund rights - your ads can’t limit consumers’ statutory guarantees, and if you offer a manufacturer guarantee, your wording needs to comply (a robust Warranties Against Defects Policy helps).

Common Risk Areas For Small Businesses

Most issues arise in a few predictable places. If you manage these well, you’ll reduce your risk significantly.

Pricing, Discounts And “Was/Now” Claims

Pricing is high risk because customers rely on it to make quick decisions. Claims like “50% off” or “lowest price guaranteed” must be accurate and supported by data.

Make sure any “was” price was genuine for a meaningful period, and that your “save” or RRP comparisons are truthful. Our guide to advertised price laws covers the benchmarks regulators expect.

Comparative And Superiority Claims

“Best”, “No.1”, “fastest” and similar claims require solid evidence. If your claim is based on limited tests or a narrow market slice, say so clearly. Otherwise, the headline may overstate what you can prove.

Testimonials, Influencers And Online Reviews

Testimonials must be genuine and typical, and influencer posts should clearly disclose commercial relationships. Avoid editing or suppressing legitimate negative reviews - that can mislead consumers about overall satisfaction.

“Limited Time” Or “Only X Left” Urgency

Scarcity and urgency can be effective, but they must reflect reality. If you use countdown timers, stock counters or “today only” language, make sure the claim is accurate at the time of the ad and that you can back it up.

Green Claims And Country Of Origin

Environmental and sustainability claims need clear evidence. Avoid broad, undefined phrases like “eco-friendly” without explaining what you mean and how you measured it. Similarly, be precise with origin claims such as “Australian-made”.

Email And Telemarketing

Marketing communications are also regulated by spam, privacy and consumer laws. Maintain accurate lists, provide easy opt-outs, and ensure content isn’t misleading. If email is a major channel, revisit your processes against Australia’s email marketing laws.

How To Stay Compliant: A Practical Advertising Checklist

Here’s a step-by-step way to pressure test your promotions before they go live.

1) Substantiate Your Claims

• Keep evidence on file for all factual claims (price comparisons, performance stats, market share, testimonials).
• If your data is limited (e.g. specific test conditions), reflect that limitation in the ad so the overall impression is balanced.

2) Make Conditions Clear And Prominent

• Put key qualifications upfront, not just in fine print.
• If a headline could mislead without context, add a short, clear qualifier close to the claim.
• Use plain language; consumers shouldn’t need to dig to understand the deal.

3) Be Straightforward On Price

• Show the total minimum price payable wherever practicable, including compulsory fees or taxes.
• Use “from” or “up to” carefully - the typical customer should still receive value consistent with the headline.
• Use genuine reference prices in sales and ensure “was” prices reflect a recent, meaningful period.

4) Treat “Savings” And Superlatives With Care

• “Best”, “cheapest” and “No.1” are high‑risk without strong, current evidence.
• Comparative claims should match like‑for‑like products or services and state the basis clearly.

5) Use Testimonials And Influencers Transparently

• Confirm reviews are authentic and typical of consumer experience.
• Disclose paid partnerships and gifted products in influencer content.
• Have clear guidelines for creators - it’s your brand on the line.

6) Align Your Website And Policies

• Ensure the promises in your ads are reflected in product pages, checkouts and customer emails - inconsistencies can mislead.
• Make sure your refund messaging respects consumer guarantees, and that your Website Terms and Conditions don’t undercut rights under the ACL.
• If you collect personal data for targeting or remarketing, keep a compliant and transparent Privacy Policy in place.

7) Put Review And Sign-Off Processes In Place

• Set a checklist for marketing approvals that includes an ACL review and substantiation check.
• Train your team on key risks (pricing, comparisons, testimonials, green claims).
• Schedule periodic audits of commonly used claims and templates.

What Happens If You Breach The ACL?

The Australian Competition and Consumer Commission (ACCC) actively monitors advertising. Consequences of non‑compliant ads can be significant.

Regulatory Action And Penalties

• Infringement notices, public warnings or enforceable undertakings requiring corrective action.
• Court proceedings seeking injunctions, corrective advertising, compliance programs and substantial civil penalties.
• Orders to refund customers or vary contracts if representations affected pricing or terms.

Penalties for false or misleading representations can be very high per contravention. Reputational damage and the cost of remediation can also dwarf any short‑term campaign gains.

Customer And Competitor Claims

Beyond the regulator, misled customers can seek remedies, and competitors may act if your ads distort the market. Understanding available claims and remedies under section 236 of the ACL can help you assess risk when issues arise.

How To Handle Complaints Or Mistakes In Your Marketing

Mistakes happen. What matters next is how you respond.

• Pause the campaign quickly and assess the issue objectively against section 18 and section 29.
• Document what went wrong and gather your substantiation file.
• Offer practical remedies to affected customers (e.g. honouring the advertised price or providing refunds as appropriate).
• Consider corrective communications, especially if the ad reached a large audience.
• Update your internal processes to prevent repeat issues.

If the issue is serious or systemic, it’s wise to get tailored advice. Many businesses find value in a targeted review like our ACL Consultation Package to improve their compliance frameworks.

Essential Documents And Policies That Support Ad Compliance

Good documents won’t replace honest advertising - but they do reduce risk, align your team and set clear expectations with customers.

• Website Terms and Conditions: Set the rules for using your site, clarify disclaimers and outline key sales conditions consistently with ads. Consider tailored Website Terms and Conditions if you sell online.
• Warranties Against Defects Policy: If you offer a manufacturer’s warranty, it must include mandatory wording and not mislead about statutory rights. A compliant Warranties Against Defects Policy helps.
• Privacy Policy: If you collect personal information for advertising or remarketing, you’ll need a transparent, up‑to‑date Privacy Policy that matches your marketing tech stack.
• Marketing And Social Media Guidelines: Internal guidance for your team and creators covering substantiation, disclosures, testimonials and review handling.
• Standard Offers And Templates: Pre‑approved copy banks for common promotions (e.g. “10% off first order”, “free shipping over $X”) reduce errors and speed approvals.
• Customer Service Playbooks: Scripts and FAQs that align with ad claims, refunds and consumer guarantee obligations (for example, your team should not overstate or limit refund rights in emails or chats).

If your business is scaling or has multiple stakeholders, it can also help to formalise your risk posture in a simple compliance plan aligned with the ACL and your promotional claims.

Key Takeaways

• Misleading advertising isn’t just about lies - if the overall impression could mislead, it may breach the ACL.
• Section 18 prohibits misleading or deceptive conduct and section 29 bans specific false representations, including pricing, testimonials and origin claims.
• High‑risk areas include “was/now” promotions, urgency claims, influencer content, green claims and email marketing - ensure you can substantiate every claim.
• Keep conditions clear and prominent, present total prices, and align your website, policies and customer communications with your ads.
• If things go wrong, act quickly: pause the campaign, assess the issue, provide remedies and strengthen your processes.
• Strong documents - including Website Terms and Conditions, a Warranties Against Defects Policy and a Privacy Policy - support compliance and customer trust.

If you’d like tailored advice on advertising compliance under the Competition and Consumer Act and the ACL, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.