When putting together marketing and promotional materials, you need to make sure that any statements relating to your products or services should be true and accurate and able to be substantiated.
There are substantial fines for business engaging in false advertising that misleads consumers, and there is no defense that the misleading information or statements were not intended.
The Golden Rule to bear in mind is this – “Do not make promises that you cannot keep”.
When advertising products or services to customers do:
- Give current and correct information
- Use simple language
- Check the overall impression is accurate
- Back up claims with facts and documented evidence where appropriate
- Note important limitations or exemptions
- Correct any misunderstandings
- Be prepared to substantiate your statements
- Omit relevant information
- Make ambiguous or contradictory statements
- Use unnecessary jargon
- Make promises you cannot keep, or make predictions without reasonable basis
- Offer goods or services without a reasonable basis for believing you can deliver
Advertising and statements in media
The above recommendations apply to print, radio, television, social media online, and on product packaging.
It includes written statements or oral statements made by persons representing your business.
Therefore training for your staff and sales representatives is important and their conduct may make you liable.
Businesses must not make false or misleading claims about the quality, value, price, age or benefit of goods and services or any associated warranty.
Using false testimonials is also illegal.
The test is whether the overall impression created by the conduct is false or inaccurate.
Fine print qualifications
A business cannot rely on disclaimers and small print as an excuse for misleading advertising. Do not state a product is “free” if in fact there is a payment that needs to be made. Any qualification to your offer must be clear and prominent.
This can be used to promote the benefit of your product or services over competitors but it must be accurate and the comparison must also relate to factors that reflects price, quality range and value.
This is an illegal practice usually involving a “sale price” on goods, that are not available or only available in very limited quantities.
Goods which are offered at a special price should be available in reasonable quantities for a reasonable period. If it is in short supply or only on sale for a limited time, say so.
Country of origin
It is illegal to make false and misleading claims about the country of origin of goods; this includes the use of symbols for example a kangaroo when in fact it is manufactured overseas.
Claims that suggest your products is safer or have some social benefit (ie free range eggs) or a nutritional benefit (fat free) or environmentally better, (100% recyclable) or therapeutic, can be made so long as they can be substantiates.
Exaggerated claims (puffery)
‘Puffery’ or wildly exaggerated or vague claims about a product that no one could reasonably treat seriously are not considered misleading for example, a restaurant that claims that they have the “best steaks in Australia” would not be considered misleading but mere puffery.
Social media channels like Facebook, Twitter and YouTube have a responsibility to ensure content on their pages is accurate irrespective of who published it.
The do’s and don’ts of social media
The same rules that apply to advertising in other forms also apply to social media.
Business must ensure that they do not make any false or misleading claims as part of their marketing and commercial activities whether in print, television, radio, websites and social media channels such as Facebook, Twitter and YouTube.
The same consumer laws apply to social media. A Tweet for example may be considered false, misleading or deceptive. False endorsements by celebrities in relation to a product or service when they never occurred can also be false, misleading or deceptive.
Misleading claims in comments
A business may also be held responsible for posts for public comments made by others on social media pages which are false or likely to mislead or deceive customers. In a recent case, a company accepted responsibility for posts by fans and testimonials on social media pages when the company knew about them, and decided not to remove them.
Placing a negative or untrue comment about a competitor’s product on a company’s Facebook page may make your company liable.
Social media – limiting your risk
- Do not make statements on your Facebook or other social media pages that you not would make in any other type of advertising
- Monitor your own social media pages and remove any posts that may be considered false, misleading or deceptive as soon as you become aware of them
- Establish in house guidelines that apply to the actions of your staff, friends and followers using social media pages
- These guidelines should be featured prominently on the social media pages – block users who breach these rules
- If a larger company, it will be assumed by the ACCC that you have sufficient resources and systems to actively and regularly monitor the social media pages
- Often it is safer to remove a misleading or false comment rather than responding to it
Misleading and deceptive conduct may lead to civil remedies including:
- Injunctions, damages, compensatory orders, orders for non-party consumers; and non-punitive orders.
Criminal sanctions do not apply, but penalties may apply if the conduct breaches the Australian Consumer Law in other ways.
If in doubt seek legal advice. Wisewould Mahony Advertising Group can provide a review and sign off of your advertising, marketing, internet or social media at a fixed fee.
Robert Toth| Partner | Corporate & Commercial
p +61 3 9612 7297 | f +61 3 9629 4035
[email protected] | www.wisewouldmahony.com.au