One example of false advertising is lying by implication, which means what?

Businesses should be honest in their dealings. Businesses shouldn't try to gain an unfair advantage by making misleading claims about their products or services.

It makes no difference whether a business intends to mislead or not.

Information must be accurate and truthful

Any information or claim that a business provides about its products or services must be accurate, truthful and based on reasonable grounds.

This includes:

• Information on prices
• images and descriptions of what is offered
• claims about the value, benefits, qualities or performance of products and services
• shipping options and delivery times.

This rule applies to any communication by a business, including through:

• advertising
• product packaging
• a quotation
• any information provided by staff, whether verbally or in writing
• social media
• testimonials
• websites or any other platform.

Any statement that creates a false impression about goods and services can be breaking the law.

Case study of a misleading claim

In June 2022, Samsung Electronics Australia Pty Ltd was ordered by the Federal Court to pay $14 million in penalties for misleading water resistance claims about its mobile phones. Samsung admitted to the court that its ads misrepresented the water resistance of its phones.

Samsung published 9 ads online and in-store. The ads showed the use of various Samsung Galaxy phones in pools and sea water. One Samsung ad showed a person surfing alongside the statement: “Do everything you love this summer on the Galaxy A5. Whether its listening to your favourite song by the pool or capturing your Sunday surf session at the beach”.

Pool and sea water could, in fact, damage the phones by corroding the charging ports.

Read more in the ACCC media release about Samsung.

Silence can be misleading

In some circumstances, failure to disclose information can be misleading. This is particularly the case if a business provides some information to a consumer but doesn't mention important details the consumer should know that are relevant to their decision.

Example of silence being misleading

A buyer wants to purchase a car for a particular purpose and he tells this to the car dealer. The car dealer knows the car isn’t suitable for John's purpose, but doesn’t say this. The car dealer's silence can amount to misleading conduct.

Wildly exaggerated claims (puffery) can be misleading

‘Puffery’ refers to wildly exaggerated and vague claims about a product or service that no one could treat seriously. For example, a restaurant claims they have the ‘best steaks on earth’. These types of statements are generally not considered misleading.

Advertising techniques that can mislead

Price claims

Price is an important factor in consumer decision making. Businesses should take extra care not to make misleading statements about price.

This may happen if products are:

• offered 'free' but on closer examination 'conditions apply'
• promoted at a ‘sale’ price which is not actually a temporary sale price, or
• advertised or displayed at a particular price, but GST or other costs are not included in that price.

A business shouldn’t mislead customers about savings on products or services.

For example, a business may advertise a sale by using statements such as 'WAS $275 NOW $149'. This implies the buyer will save the difference between the higher and lower price.

The advertised savings may be misleading or deceptive if the product or service:

• has never been sold at the higher price, or
• was sold in a limited amount at the higher price immediately before the sale

Find out more about misleading prices and price displays.

Fine print and qualifications

Many advertisements include some information in fine print. This information must not conflict with the overall message of the advertisement.

Examples of information in fine print being misleading

• An advertisement states that a product is 'free'. An extra payment is mentioned in the fine print. The advertisement is likely to be misleading.
• An advertisement states that a discount promotion is ‘storewide’ or ‘X% off all products’. Excluded products or brands are mentioned in the fine print. This may also be misleading.

Comparative advertising

Some advertisements may compare products or services to others on the market. Comparisons may be about any factors including:

• price
• quality
• range, or
• volume.

Comparative advertising can be misleading if:

• the comparison is inaccurate, or
• it doesn’t compare products fairly.

Bait advertising

Bait advertising is the practice of promoting prices, often ‘sale’ prices, on products that are:

• not available, or
• available only in very limited quantities.

It is not misleading if the business is upfront and clear about the product being:

• in short supply, or
• on sale for a limited time.

Country or place of origin

It is illegal to make false or misleading claims about country or place of origin.

Find out more about country or place of origin claims.

Premium or benefit claims

A business must be able to prove a claim of a product having a particular quality or benefit.

Premium claims may suggest a product:

• is safer, for example, ‘non-toxic’
• offers a moral or social benefit, for example, ‘free-range eggs’
• has a nutritional benefit, for example, ‘fat free’
• is 'green' or environmental, for example, ‘100% recyclable’
• is therapeutic, for example, ‘the fastest pain reliever’

A premium claim may also promote a product as being of a perceived quality. For example, ‘Swiss chocolate’ or ‘Belgian beer’.

Premium claims should be true, accurate and based on reasonable grounds.

How businesses can protect against making a false claim

Businesses can take steps to make sure they don't make a false or misleading claim.

What a business shouldn’t do

Businesses shouldn’t:

• guess the facts
• omit relevant information
• make ambiguous or contradictory statements or use jargon that consumers wouldn’t be able to understand
• make promises they can’t keep, or make predictions without solid evidence
• offer goods or services knowing they can’t supply them
• impersonate or pretend to be a different business or brand.

Don’t make false claims about:

• the price of any products or services
• the quality, style, model or history of a product or service
• whether the goods are new
• the sponsorship, performance characteristics, accessories, benefits or use of products and services
• whether goods are in stock or when they may be supplied, including estimates about delivery timeframes
• the availability of repair facilities or spare parts
• the need for the goods or services
• any exclusions on the goods and services
• a consumer’s rights, warranties or remedies.

What a business should do

Businesses should:

• give current and correct information
• use easy to understand language
• check that the overall general impression is accurate
• back up claims with facts and evidence
• note important limitations or exemptions
• keep consumers updated if things change. For example, if the business will no longer be able to supply a product within the timeframe provided to the consumer.
• correct any misunderstandings
• be prepared to prove claims.

Businesses must also consider how any claims they make may impact on consumers experiencing vulnerability. For more information, download the guide Consumer vulnerability: A business guide to the Australian Consumer Law.

Penalties for false or misleading claims

There can be penalties for businesses that mislead consumers. Find out more about the penalties that may apply.

What is manipulative advertising?

Is advertising a form of lying?

What is an example of truth in advertising?

What does false advertising violate?