Are you aware of how your communication could mislead or deceive your customers? Do you know where and how and why you might breach Australian Consumer Law? Rebecca Halkett of Kain C+C Lawyers wrote this guest post for us about exactly that.
Misleading and deceptive statements
Guest Post by Rebecca Halkett
Every business that supplies goods or services should be familiar with the prohibitions on misleading statements under the Australian Consumer Law. Section 18 of the Competition and Consumer Act 2010 provides the general prohibition on misleading or deceptive conduct. Section 29 prohibits a more specific list of false or misleading representations.
There is often an overlap of these sections, so if you breach one you are likely to breach the other.
What does Australian Consumer Law cover?
For the most part these provisions will apply any time you are trying to market or sell a product. This includes:
- any communication directly with customers;
- advertising in any way (online, television, radio, print media etc);
- staff statements to customers (instore, online and by phone; and
- catalogues and flyers.
As the regulator, it is the Australian Competition and Consumer Commission‘s (ACCC) job to monitor conduct and to enforce the prohibitions in the Australian Consumer Law. The ACCC will consider and investigate complaints made to it.
Complaints aren’t only made by consumers
Complaints are not only made by consumers but very often by competitors.
This means that even if the ACCC and consumers don’t notice a misstatement about a product or service, your competitors are likely to notice it. They can then bring it to the ACCC’s attention.
Misleading or deceptive conduct is determined by the ‘overall impression’
When considering a potential breach, the ACCC will consider whether or not a representation is misleading by looking at the circumstances as a whole. Misleading or deceptive conduct is determined by the ‘overall impression’ given. It is not determined by considering the separate elements which make up an advertisement or representation.
This means that even if each representation made is correct, if together and with any images they create a misleading impression, then this may constitute a breach of the Australian Consumer Law.
So, what are the consequences?
In addition to the time and cost involved in having your staff and/or advisers engaged in dealing with the ACCC, there are penalties and other remedies that may apply.
The ACCC could choose to:
- pursue penalties in the Federal Court, at which point the Court will decide how much the penalty should be – just because the ACCC has a view doesn’t mean the Court will agree with them;
- require corrective advertising; and/or
- issue infringement notices. An infringement notice is similar to a parking fine. The ACCC can allege the breach and you have the choice to either pay the fine or elect to be prosecuted.
About our guest: Rebecca Halkett
Rebecca leads the Food & Agribusiness team at Kain C+C in Adelaide, Australia. She is the firm’s resident competition and consumer law specialist.
Rebecca has acted on behalf of the ACCC in prosecutions and for companies in the consumer goods, food, wine, health and automotive industries resolving contraventions and ensuring compliance. With the benefit of having worked for the regulator, Rebecca taps into her extensive experience to provide her corporate clients with clear and concise advice that enables them to operate with confidence and avoid substantial penalties.
At Brutal Pixie we specialise in helping companies like yours to improve their communication – so you’re far less likely to find yourself at the ACCC’s mercy. Contact us for more information » »