Misleading and Deceptive Conduct in NSW: What You Need to Know

If you’re running a small business in New South Wales, you’re expected to be honest and clear with your customers and other businesses - in your ads, pricing, sales conversations, contracts and even your website design.

This isn’t just good practice. It’s the law.

In Australia, the Australian Consumer Law (ACL) prohibits businesses from engaging in misleading and deceptive conduct. NSW Fair Trading and the ACCC enforce these rules, and penalties can be significant. The good news? With a few practical steps and the right documents, staying compliant is manageable - and it builds trust with your customers.

In this guide, we unpack what “misleading and deceptive conduct” means for NSW businesses, where problems commonly arise, how to reduce your risk, and what to do if a complaint lands on your desk.

What Counts As Misleading Or Deceptive Conduct Under The ACL?

“Misleading or deceptive conduct” covers any business conduct that is likely to lead someone into error. It’s broader than outright lying - half-truths, omissions, confusing pricing or creating the wrong overall impression can also be unlawful.

The core rule sits in Section 18 of the ACL. It applies to almost every interaction you have in trade or commerce, whether with consumers or other businesses.

Courts look at the “overall impression” you create for your audience - what you say, how you say it, and the context. If the likely audience would be led to a wrong belief, that can be a breach even if you didn’t intend to mislead.

For a deeper dive into how the rule is applied (including examples and what a court considers), read our guide on misleading or deceptive conduct.

Does The Law Apply Differently In NSW?

The ACL is a national law, so the rules are the same in NSW as they are in other Australian states and territories. NSW Fair Trading plays a key role in local enforcement and dealing with complaints from NSW consumers and businesses, and the ACCC focuses on broader enforcement across Australia.

What matters for you is where your customers are and where you operate. If you sell to NSW customers, you should assume NSW Fair Trading may be involved if a dispute escalates. Keep your house in order and you’ll be fine.

Common Risk Areas For NSW Small Businesses

Most issues aren’t caused by bad intentions - they arise because something was unclear, out of date, or not documented. Here are the hot spots to watch.

1) Advertising, Promotions and Social Posts

Any claim you make in ads, landing pages, flyers or social media should be accurate, current and supported by evidence. Avoid absolute claims like “guaranteed results” unless you can stand behind them. Be careful with comparisons (“best in Sydney”, “lowest price”), and keep disclaimers next to the headline claim - not buried elsewhere.

If you show a price in any marketing, the price must be accurate and must not create a false impression about the total amount payable. Our overview of advertised price laws explains the essentials.

2) Pricing, Fees and “From” Prices

Drip pricing (revealing extra fees late in the checkout) and confusing “from” pricing can be risky if the overall impression is that the customer will pay less than they actually do. Show the total price clearly and early, and avoid ambiguous phrases that might mislead someone about what’s included.

3) Testimonials and Reviews

Reviews must be genuine. Don’t edit out negatives to create a false impression. If you use influencers or affiliates, their posts must disclose paid relationships and must not exaggerate. If your business invites reviews, have a simple policy for responding to or correcting inaccurate posts.

4) “Fine Print” And Disclaimers

Disclaimers can help, but they’re not a shield if the headline message is misleading. Key conditions should be clear, prominent and close to the claim they qualify. If an important limitation applies (e.g. “only in metro Sydney” or “first-time customers only”), say it plainly up front.

5) Email and SMS Marketing

Your direct marketing must be truthful and respectful. Make sure subject lines, offers and deadlines are accurate, and honour opt-outs promptly. Legal obligations apply to how you send commercial messages, which we cover in our guide to email marketing laws.

6) B2B Sales and Pre-Contract Statements

Misleading conduct doesn’t just hit consumer transactions - it also applies to business-to-business deals. Be careful with sales forecasts, performance claims, or statements about stock levels, supply times or product capabilities. If you don’t know, say so; if something may change, flag the uncertainty.

7) What You Don’t Say (Silence)

Silence can mislead. If you know something material that would change the customer’s decision (for example, a critical limitation or known defect), you may need to disclose it. The test is whether your conduct overall would likely lead someone into error.

8) Online Design and Checkout

Website design matters. Interface patterns that nudge customers into choices they wouldn’t otherwise make - for example, pre-ticked boxes for add-ons or confusing “X” buttons - can be problematic if the overall effect misleads. Keep the path to purchase clear and the total cost obvious.

Specific Rules You Should Know (Beyond Section 18)

In addition to the general prohibition on misleading conduct, the ACL includes specific rules about false or misleading representations. These often appear in price displays, product descriptions and guarantee wording.

Under Section 29, you must not make false or misleading representations about matters like price, quality, sponsorship/approval, or the existence of a right to a refund. If your team uses scripts, templates or automated messages, review them against Section 29 to make sure they’re accurate.

How To Stay Compliant Day-To-Day

Compliance doesn’t need to slow you down. Build these habits into your normal operations.

• Use plain English in your marketing and sales materials. If a reasonable person might read it a different way, tighten the wording.
• Keep a quick evidence file for key claims. If you say “delivered in 24 hours” or “80% stronger,” have data or procedures to back it up.
• Sense-check the “overall impression.” Step back and look at your ad, landing page or sales script as a customer would. What conclusion would you draw?
• Update materials promptly when something changes - pricing, inclusions, stock, timeframes and guarantees all need attention.
• Train your team. Anyone who sells, markets, posts on social or responds to customer enquiries should know the basics of the ACL.
• Review your website UX. Make total prices and key terms clear early, and avoid design choices that could be seen as confusing.
• Document your position in writing. If you rely on specific terms, include them in your customer-facing contract or website terms.

Contracts, Policies And Training That Reduce Risk

Having the right documents in place makes compliance easier and reduces the chance of disputes. Tailor these to your business and keep them consistent with your marketing.

• Terms of Trade: Your customer-facing terms setting out inclusions, exclusions, timelines, payment terms and liability limits. Clear terms help ensure your promises match your actual service. Consider implementing robust Terms of Trade before you scale.
• Website Terms and Conditions: If you sell or capture leads online, include the rules for using your site, IP ownership and liability clauses. This is a simple way to set expectations for users. See our Website Terms and Conditions offering.
• Privacy Policy: If you collect any personal information (contact forms, checkouts, bookings or email lists) you should explain how you handle it - and then follow that policy. A clear Privacy Policy also supports transparent marketing practices.
• Warranties Against Defects Policy: If you offer your own warranties, the ACL requires certain mandatory wording and disclosures. Use a compliant Warranties Against Defects Policy so your promises don’t accidentally mislead.
• Marketing Guidelines and Training: Short, practical internal guidelines keep your team aligned on what they can and can’t say in ads, emails and chats. Review claims regularly and keep an approval process for promotions.
• Record-Keeping: Save drafts, data and approvals for key campaigns. If a question arises later, you can point to the basis for your claims.

If you want a refresher on the building blocks of the rule itself, revisit Section 18 and the core elements of misleading conduct and check your documents line-by-line for consistency with your marketing.

Examples: Where Small Businesses Get Caught Out

Let’s make this practical. Here are common situations that cause issues - and simple fixes.

• “From $99” pricing that no one can actually buy: If the $99 option is extremely limited or excludes mandatory fees, the overall impression may mislead. Fix it by making the total price clear early and explaining any conditions right next to the price.
• “Limited time” offers that never end: Retiring and re-posting the same offer each week can mislead customers about urgency. Put real dates on promotions, and stick to them.
• Overstating stock on hand or delivery times: If supply is uncertain, avoid definitive promises. Use “estimated” language and explain the variables that could affect timing.
• Cherry-picking testimonials: Highlighting only five-star reviews while suppressing legitimate negative feedback could create a false impression. Keep your review policy balanced and transparent.
• “No refunds” signs or web copy: Blanket “no refunds” statements are risky because the ACL provides consumer guarantees. Set a fair refund process in your terms and train staff to handle requests correctly.

Handling Complaints And Regulator Contact

Complaints happen. The key is to respond quickly and professionally.

• Listen and gather facts: Ask the customer for specifics. What did they see or read? What outcome are they seeking?
• Check your materials: Pull the ad, web page or script in question and look at the overall impression. If something is ambiguous, adjust it.
• Offer a fair remedy: If you’ve created the wrong impression, a prompt correction, refund or re-performance can resolve most issues early.
• Log the incident: Keep a simple register of complaints, your assessment and any corrections you made. This is useful if patterns emerge.
• Regulator contact: If NSW Fair Trading or the ACCC reaches out, respond on time and be transparent. Provide documents that support your position and the steps you’ve taken to fix any issues.

It’s much easier to handle a complaint when your contracts, policies and marketing are aligned and up to date.

Frequently Asked Questions

Is intent required to breach the law?

No. Misleading conduct can be a breach even if you didn’t mean to mislead. The question is whether your conduct was likely to lead a reasonable person in your audience into error.

Can a disclaimer protect me?

Disclaimers help, but they won’t save a headline claim that’s misleading. Make sure key conditions appear clearly and are close to the relevant claim.

Do these rules apply to B2B sales?

Yes. The ACL applies to conduct “in trade or commerce”, which covers many business-to-business representations. Be especially careful with forecasts, performance claims and products sold to small business customers.

What about specific prohibited claims?

In addition to Section 18’s general prohibition, Section 29 bans specific false representations (for example, about price, quality or a right to a refund). Make sure your team understands Section 29 so scripts and templates don’t stray into risky territory.

A Quick Compliance Checklist

• Check ads and landing pages for a clear, accurate overall impression.
• Display total prices, avoid drip pricing and explain conditions upfront.
• Keep evidence for claims (tests, data, supply arrangements).
• Align your marketing with your Terms of Trade and your website’s Website Terms and Conditions.
• Ensure your Privacy Policy matches your data and marketing practices.
• Use compliant warranty wording where relevant via a Warranties Against Defects Policy.
• Review email and SMS campaigns against the basics in our email marketing laws guide.
• Train staff and keep an approvals process for promotions and price changes.

Remedies And Penalties You Should Know

If a customer (or another business) suffers loss because of misleading conduct, they may seek compensation, corrective orders or an injunction to stop the conduct. The ACCC and NSW Fair Trading can also take enforcement action, which may include penalties, enforceable undertakings and public corrective notices.

For small businesses, the biggest impact is often the time and cost of responding to complaints, plus reputational damage. That’s why prevention - clear wording, accurate claims and strong contracts - is the smarter play.

Key Takeaways

• Misleading and deceptive conduct in NSW is governed by the national ACL, with Section 18 prohibiting conduct that leads customers into error.
• Risk hot spots include ads, pricing, testimonials, B2B sales claims, disclaimers and online design - focus on the overall impression you create.
• Back up your claims, disclose key conditions clearly and keep your materials current to avoid accidental breaches.
• Align your marketing with strong customer-facing terms, a clear Privacy Policy, compliant warranty wording and practical internal training.
• Section 29 bans specific false representations about price, quality and consumer rights - make sure sales scripts and templates reflect the rules.
• Early fixes resolve most issues; serious breaches can lead to compensation claims and regulator action, so prevention pays.

If you’d like tailored advice on misleading and deceptive conduct in NSW - or a review of your contracts and marketing - reach us on 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.