1. Buy one, get one free

Businesses have to be particularly careful when using the word “free” (and the same goes for saying something is as a “bonus”. Marketers need to be crystal clear about which products or services qualify as free and to ensure they clearly include any conditions must comply with. A common example of this is using the phrase “15% free” when increasing the volume of a product, if the price of the product has increased then the additional volume is not actually free.

Another example is with a ‘buy one get one free’ offer. If you raise the price of one item to make up the cost of the second “free” item, this would be considered to be misleading.

2. Comparative Advertising

Businesses often use comparative advertising to directly promote the superiority of their products over another. These comparisons can relate to price, quality, range, or volume. If you’re comparing something to your competitors product or service, or even your own pricing you need to be sure the comparisons are accurate.

“The comparisons must be like-for-like when comparing products/features and they must be accurate when making price claims,” Sarla explains. “We see businesses get in trouble when they don’t compare products or services correctly. You also need to consider the duration of the advertisement, because a competitor can act very quickly to change their product or service which would render your campaign misleading.”

An example of what it means to compare “like-for-like” is you might want to market that one brand’s batteries last longer than another. But you can’t compare an extra strong battery to a lesser-strength battery. Before making comparisons, you need to make sure you have a solid understanding of both your own products and your competitors. You also need to ensure that the claims you are making are specific and not all-encompassing (if the comparison only applies to one product).

Misleading or deceptive claims can also occur when comparing prices, whether your own or others’. This is an important watch-out as businesses often make comparisons between the prices they are currently charging for a product and the price for which they previously sold the item. They also might compare the pricing with a competitor’s price, the cost or a wholesale price. In all accounts, a business must ensure they don’t use statements that mislead.

3. Fake reviews and testimonials

Reviews and testimonials are popular tools used by businesses to promote their goods and services. Common examples of these can be found across a variety of marketing channels. Regardless of the advertising medium, any review or testimonial should reflect the genuine views and opinions of the person. Businesses must not misrepresent consumer opinions to dishonestly promote themselves (including “stuffing” review sites or ecommerce platforms with inauthentic reviews about how good your product or service is.

4. False or misleading claims

In addition to the prohibition against misleading or deceptive conduct, it is unlawful for a business to make false or misleading claims about goods or services. We saw several cases related to this type of misleading and deceptive behaviour during the COVID-19 pandemic. One prominent Australian athletic wear company was forced to pay millions in damages for claiming some of its products could protect wearers from COVID-19. There were similar examples where claims were made in relation to the protection level that some hand sanitiser and mask producers were making about their products.

The ACCC is cracking down hard on false and misleading claims made in relation to health, environmental, and sustainability.

5. Overreliance on disclaimers and fine print

While Australian Consumer Law allows companies to use disclaimers and fine print to clarify things, you can’t make bold claims and then contradict them in small type. When deciding if conduct is misleading or deceptive, or likely to mislead or deceive, the most important question to ask is whether the overall impression created is false or inaccurate. For example, a prominent internet service provider advertised a type of broadband internet for $29.99 a month. However, in the fine print, the company said that $29.99 rate was only available when the internet was bundled with a home line rental that cost $30 a month. The ACCC determined these advertisements were misleading, as it led customers to believe they could get broadband internet for just $29.99 a month, when the minimum price was at least $59.99 a month.

Other examples of deceptive or misleading conduct include:

• Accepting payments for goods or services the business does not intend to provide

• Misleading guarantees or warranties

When it comes to thinking about whether something could be considered misleading or deceptive, the best test is often common sense but it is always good to get a second opinion – to make sure that the way you read something is the only way it can be read. If you are uncertain about anything you are saying, then speak to your legal team. Engage them early so they can help you get the desired message across correctly. It’s better you speak to them upfront than need them to deal with a formal investigation if you get it wrong.”

Marketers need to have a good understanding of their responsibilities under the Australian Consumer in order to help their brand thrive and avoid becoming a case study for regulators.