Avoiding false or misleading claims

Do you or your staff make claims to customers that aren’t 100% true?
Have you left out key information because you thought disclosing it might lose a sale?
Is your competitor lying in their ads?

It is against the law to engage in conduct that is misleading or deceptive to consumers and other businesses. Businesses shouldn't try to gain an unfair advantage by making false or misleading claims about their products or services.

False or misleading claims

All claims must be clear, truthful and accurate under the law.

Businesses should be honest in their dealings and shouldn't try to gain an unfair advantage by making false or misleading claims about their products or services. Make sure that any claims you make are clear, truthful and accurate.

Businesses risk breaking the law if they make false or misleading claims.

A false or misleading claim can be incorrect information or something that creates a false impression. It doesn’t matter if a business intends to mislead or not.

False or misleading claims can be made in any communication by a business, including through advertising or sales techniques, pricing, marketing claims about your product or service, online content, packaging and more.

A false or misleading claim doesn’t have to be in writing. Verbal statements, images and videos can be misleading too. A false or misleading claim can also be made verbally by a person that represents your business.

In some circumstances, failure to say something can be misleading too. This may be the case if you don’t disclose important information that is relevant to the decision to purchase a product or service.

Relaying information from third parties that is misleading or deceptive can also be in breach of the law. The exception is if you make it clear you are just relaying the information and aren’t giving any assurance about its accuracy.

You must be able to prove any claims you make about your products or services.

Case study of a business making misleading representations

In December 2024, the Federal Court ordered Meg’s Flowers Pty Ltd to pay $1 million in penalties for making misleading representations that it was a ‘local’ florist.

Meg’s Flowers admitted that it had made false or misleading representations that it was a local florist located in each of the towns, suburbs or localities referred to in 156 websites and in 7,462 Google advertisements.

In fact, Meg’s Flowers did not directly maintain any local shopfronts accessible to customers. Orders placed with Meg’s Flowers were fulfilled from any one of 11 Meg’s Flowers premises, or, in some instances, by subcontractors.

Example of failure to say something

A small business wants to purchase a printer for a particular purpose, and he tells this to the seller. The seller knows the printer isn't suitable for the purpose specified by the small business but doesn’t say so. The seller’s silence could amount to misleading conduct.

Example of relaying third party information

An independent toy retailer, relying on information provided by a manufacturer, told a customer that a specific toy was waterproof. This wasn’t true. The retailer has likely misled the customer even though he believed the information was correct.

Examples of false and misleading claim

An online store promotes its pillows and bedding as hypoallergenic and having been endorsed by an asthma association. However, no such endorsement has been given, and no testing has been undertaken to verify the material used is unlikely to cause an allergic response. Such claims are likely to be false or misleading and in breach of the law.