Section 18 of the Australian Consumer Law Explained

When you advertise your products, write your website copy, or answer a customer’s question, there’s one rule that always applies in Australia: don’t mislead. That rule lives in section 18 of the Australian Consumer Law (ACL), and it’s one of the most important consumer protections you need to know as a business owner.

Whether you sell online, in-store, or through distributors, s 18 sets the standard for how you make statements about your goods, services, prices and promotions. Getting it right builds trust and reduces legal risk. Getting it wrong can lead to complaints, enforcement action, and significant reputational damage.

In this guide, we’ll break down what s 18 actually says, what “misleading or deceptive conduct” looks like in real life, the common risk areas for small businesses, and the practical steps you can take to stay compliant from day one.

What Does Section 18 Of The ACL Say, In Simple Terms?

Section 18 of the Australian Consumer Law (in Schedule 2 to the Competition and Consumer Act 2010) prohibits a person, in trade or commerce, from engaging in conduct that is misleading or deceptive, or likely to mislead or deceive.

In plain English, this means any business conduct that could lead an ordinary customer to form a wrong impression is risky - regardless of whether you intended to mislead. The focus is on the overall impression your conduct creates, judged against your target audience.

A few key points to keep in mind:

• It covers “conduct,” not just written statements. Photos, comparisons, packaging, testimonials, silence (when you should say something), and even your sales process can be caught.
• It applies to all businesses, large or small, across all industries - goods and services alike.
• Intent isn’t required. You don’t need to have meant to mislead. If the conduct could mislead an ordinary consumer in your audience, that can be enough.
• Context matters. Courts look at the overall impression on your likely customers, not just the fine print.

If you want to dive deeper into the legal elements, it’s worth reading a short refresher on the elements of misleading or deceptive conduct and a practical overview of section 18 of the Australian Consumer Law.

What Counts As Misleading Or Deceptive Conduct?

Most s 18 issues arise in everyday business activities - marketing, pricing, product claims and customer communications. Below are common examples to help you spot risks early.

Advertising And Product Claims

• Describing a product as “100% organic” when some ingredients aren’t certified.
• Using “before and after” photos that exaggerate results or aren’t representative of typical outcomes.
• Claiming “Australian made” where the product is assembled locally but primarily manufactured overseas.
• Stating “lifetime warranty” when significant exclusions or conditions apply that would surprise a typical customer.

Tip: If you’re making performance claims, be ready to substantiate them. If you can’t prove it, don’t say it.

Pricing And Promotions

• “Was/Now” pricing where the “was” price was rarely offered (or offered only briefly) to create a false discount impression.
• Advertising a base price but hiding non-optional fees until checkout.
• “Limited time only” messaging that runs indefinitely.

Transparent pricing is key. If you’re running promotions or sales, make sure your approach aligns with advertised price laws in Australia and that your discounts are genuine.

Silence And Omissions

• Failing to mention material limitations (e.g. a software subscription that auto-renews unless cancelled, but that isn’t made clear).
• Not disclosing known defects when selling refurbished or used items.
• Suggesting a product is compatible with a customer’s system when you know it may not be.

Silence can mislead if a reasonable customer would expect you to reveal important information. If in doubt, clarify.

Testimonials, Reviews And Social Proof

• Publishing reviews that you know are fake, edited in a misleading way, or incentivised without disclosure.
• Using “as seen on” logos for media features that were paid placements presented as editorial coverage.

Managing online reputation is important, but avoid practices that could mislead. If you’re navigating a tricky situation, our guide to handling fake Google reviews explains your options.

Sales Processes And Representations

• Pressure selling that overstates urgency or availability.
• Suggesting a customer has certain legal obligations (e.g. “no refunds” signs) that conflict with the ACL.
• Cold-calling or door-to-door sales that don’t meet telemarketing laws or rules for unsolicited consumer agreements.

Remember, s 18 sits alongside other ACL rules. For instance, specific false representation offences (like claims about price or quality) appear in s 29 of the ACL - see our breakdown of section 29 for examples that often overlap with misleading conduct.

How Do You Stay Compliant With s 18 In Your Day-To-Day Operations?

You don’t need to be a lawyer to comply with s 18 - you just need a simple process that keeps your marketing and sales materials accurate, consistent and well-documented. Here’s a practical framework you can adopt.

1) Build A Claims Register And Sign-Off Process

List all key claims you make about your products or services (e.g. performance metrics, “made in Australia,” environmental benefits). For each claim, note your evidence, the date it was checked, and who approved it.

Before each campaign launches, have someone (ideally not the original writer) review the overall impression of the ad - not just the words, but images, layout, and headlines. Ask: What impression would a typical customer take away?

2) Be Clear On Pricing And Promotions

Ensure promotional pricing is genuine. Keep records showing the duration and frequency of your “was” price offers. Present any non-optional fees upfront, not just at checkout.

If you run sales often, create internal guidelines covering “limited time” language, stock availability, and rain checks to avoid creating misleading expectations.

3) Align Your Fine Print With The Headline

Disclaimers and terms can add clarity, but they can’t fix a misleading headline. If your main message leaves the wrong impression, rewrite the headline. Then make sure your Website Terms and Conditions and customer-facing documents match what you advertise.

4) Handle Warranties And Refunds Correctly

“No refunds” signs or policies can be misleading because the ACL grants non-excludable consumer guarantees. If you offer your own warranty, document it clearly and ensure it’s consistent with the mandatory wording for a Warranties Against Defects Policy.

5) Keep Your Online Presence Consistent

Your website, socials, marketplace listings and sales scripts should tell the same story. If you collect customer data for marketing or personalisation, make sure your Privacy Policy reflects what you actually do - saying one thing and doing another can mislead.

6) Train Your Team

Give staff simple, scenario-based training. Show examples of risky phrases (“free” with significant conditions, “up to” claims without context) and teach how to qualify statements without overpromising. Encourage team members to flag anything they’re unsure about before it goes live.

7) Document Your Decisions

Keep records of approvals, claim substantiation, and campaign changes. If a claim is challenged, being able to show your reasoning and evidence can make a real difference.

High-Risk Areas: Where Small Businesses Get Caught Out

Some scenarios trigger s 18 issues more than others. If any of these apply to you, slow down and double-check your approach.

Intro Pricing And “Founders” Deals

Early-bird or “founders” discounts are popular, but avoid creating a misleading impression that your standard price is higher if that “standard” is rarely charged. Make timing and eligibility crystal clear, and don’t extend “limited time” offers indefinitely.

Green Claims And Sustainability

Environmental claims attract scrutiny. Terms like “eco-friendly,” “sustainable,” or “carbon neutral” need substantiation and context. If you rely on offsets, explain that plainly. If only part of a product meets your claim, say so.

Comparative Advertising

“We’re 30% cheaper than the leading brand” can be powerful - and risky. Ensure comparisons are current, apples-to-apples, and supported by evidence. Qualify your comparisons (e.g. model, size, timeframe) so customers aren’t misled.

Free Trials, Subscriptions And Auto-Renewals

Be upfront about renewal dates, billing cycles and cancellation mechanics. Don’t hide steps in a maze of menu items. If a “free trial” converts to paid, make the end date and the price highly visible - not just in the fine print.

Health, Fitness And Performance-Based Services

Be cautious with outcome promises. Use realistic language and disclaimers that align with the main message. Testimonials should be genuine and reflect typical experiences if they’re used to imply likely outcomes.

How s 18 Interacts With Other ACL Rules

Section 18 is the broad “don’t mislead” rule, and it often works alongside more specific ACL provisions:

• Specific false representation offences appear in section 29 (e.g. misrepresentations about price, quality, or affiliation).
• Pricing transparency expectations are reinforced by advertised price laws and other competition/consumer guidance.
• Phone and door-to-door selling must comply with telemarketing laws and rules for unsolicited consumer agreements.
• Your public-facing policies and terms (like your Website Terms and Conditions, returns policy, and Warranties Against Defects Policy) must align with ACL consumer guarantees.

Think of s 18 as the baseline filter: would a reasonable customer be misled by what we’re saying or doing? Then check the specific rules that apply to your channel or claim type.

What Happens If You Breach s 18?

Consequences vary depending on the conduct and its impact. Potential outcomes include:

• Regulatory action: The ACCC or state consumer agencies may investigate, seek enforceable undertakings, or commence court action.
• Court orders: Injunctions to stop the conduct, orders to publish corrective notices, and other remedial orders.
• Damages or compensation: Customers or competitors who suffered loss due to misleading conduct can seek compensation.
• Reputational harm: Public enforcement and negative publicity can erode trust quickly.

Courts look at the overall impression and the likelihood of customers being misled. Even without intent, careless or poorly substantiated claims can attract serious consequences - especially if the conduct is widespread or persistent.

Practical Checklist: Embedding s 18 Compliance In Your Business

To make s 18 compliance part of “how we do things here,” bake these steps into your workflows:

• Maintain a simple claims register with evidence and review dates.
• Set up a pre-publication sign-off process for promotions and website updates.
• Use plain, accurate language and avoid absolute statements unless you’re certain.
• Substantiate comparative, environmental, or performance claims before using them.
• Present total prices clearly, and make any conditions obvious upfront.
• Align your public policies with the ACL (returns, warranties, subscriptions).
• Train your sales, marketing and customer support teams with real examples.
• Document approvals, data sources, and campaign changes for accountability.
• Regularly audit your website, socials, and sales scripts to keep them consistent and current.

If you want a deeper legal overview as you implement your processes, revisit the practical summary of section 18 and keep an eye on related rules like section 29 false representations.

Key Takeaways

• Section 18 of the ACL prohibits conduct that is misleading or deceptive, or likely to mislead - across all industries and channels.
• The test is the overall impression on your target audience; intent isn’t required, so careless claims can still breach the law.
• High-risk areas include pricing and promotions, green claims, testimonials/reviews, subscription renewals, and comparative ads.
• Build a practical compliance workflow: substantiate claims, use a sign-off process, keep terms consistent, and train your team.
• Make sure public-facing documents like your Website Terms and Conditions, Privacy Policy and Warranties Against Defects Policy match what you say in your marketing.
• Staying aligned with related rules (e.g. advertised price laws and section 29) reduces risk and builds trust with customers.

If you’d like a consultation on tightening your marketing, pricing and customer policies around section 18 of the Australian Consumer Law, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.