Marketing is one of the fastest ways to grow a small business - but it’s also one of the easiest ways to accidentally create legal risk.
If you’re running campaigns on social media, Google, marketplaces, email, or even just putting signage in your shopfront window, you’re “advertising”. And in Australia, advertising is heavily influenced by the Australian Consumer Law (ACL).
The good news is you don’t need to be a lawyer to stay compliant. Once you understand how the ACL treats ads that could mislead customers, you can build a simple internal checklist that protects your business, your reputation, and your customer relationships.
Below, we’ll walk you through what counts as misleading advertising, the most common traps we see for small businesses, and practical steps you can apply before you hit “publish”.
What Counts As Misleading Ads Under The Australian Consumer Law?
Under the ACL, your advertising must not be misleading or deceptive (or likely to mislead or deceive). That includes what you say and what you imply.
This matters because many business owners hear “misleading ads” and think it only applies to blatant lies. In reality, a claim can be misleading even if:
- you didn’t intend to mislead anyone
- you believed the claim was true
- the ad is technically correct but creates the wrong overall impression
- the important detail is hidden in fine print or only explained after checkout
In practice, the ACL looks at the overall impression your ad gives a typical customer in your target audience.
Misleading “Silence” Counts Too
Misleading advertising isn’t only about what you include - it can also be about what you leave out.
For example, if you advertise “$0 setup” but there’s a mandatory onboarding fee disclosed only after someone signs up, the issue isn’t just the wording. It’s the impression that setup is free when, in reality, most customers will pay something.
Online, Offline, And “Word Of Mouth” Can All Be Advertising
Misleading ads can happen anywhere you communicate with customers, including:
- website pages (including product pages, FAQs and pop-ups)
- Instagram, TikTok, Facebook and LinkedIn posts
- Google Ads and marketplace listings
- sales calls, DMs, scripts and brochures
- testimonials and “before/after” images
- “limited time” offers and countdown timers
Even if a statement is made casually by your team (for example, in a comment reply or on a phone call), it can still contribute to a misleading impression.
Why Small Businesses Get Caught: The Most Common Triggers
Most ACL problems we see don’t come from “bad” businesses - they come from fast-moving businesses. You’re juggling growth, content creation, sales, and customer support, and marketing gets produced quickly.
Here are the common areas where misleading ads tend to happen.
1. Pricing Claims That Aren’t The Real “Payable” Price
Pricing is one of the highest-risk areas because customers rely on it to make quick decisions.
Be careful with:
- “From $X” pricing where most customers can’t actually buy at that price
- add-on fees (booking fees, service fees, delivery charges) disclosed too late
- subscription traps where the ongoing price is not prominent
- bundles and “free” offers where something is only free if conditions apply
It’s also important to show prices clearly in the format you’re using (online, in-store, quotes). If you advertise prices publicly, specific advertised pricing rules may apply to how prices are displayed, so your presentation should be consistent and not likely to mislead. For more detail, see advertised price laws.
2. “Sale” And Discount Claims That Don’t Stack Up
Discount advertising is a common growth strategy - but it’s also a common compliance risk.
Red flags include:
- inflating the “was” price briefly to make the “now” price look better
- claiming “50% off everything” when exclusions apply
- advertising a sitewide discount that only applies once a code is used (and the code isn’t obvious)
- running “ending tonight” sales that keep being extended
As a practical rule: if a customer would feel tricked when they reach checkout, you should assume the ad needs rewriting.
Many industries rely on strong outcome-focused marketing (think: health, beauty, fitness, coaching, professional services, software and trades). That’s where small businesses can accidentally promise more than they can deliver.
Examples that often create issues:
- “Guaranteed results” without clear, achievable conditions
- “Works in 24 hours” when results vary widely
- “A permanent fix” when ongoing maintenance is usually required
- claims that imply scientific or professional endorsement without proof
Also remember: customer rights under the ACL can’t be contracted out of. If you sell goods, you need to be careful with warranty messaging. Many businesses assume warranties are “two years and that’s it”, but the ACL is more nuanced - the key is what is reasonable for that product and price point. This comes up often when businesses advertise warranty terms, as explained in warranties under the ACL.
4. Testimonials, Reviews And Before/After Content
Testimonials and reviews are powerful - but they can also create misleading impressions if they’re not handled carefully.
Common pitfalls include:
- publishing testimonials that suggest typical results when the results are exceptional
- editing reviews in a way that changes the meaning
- using testimonials for a different product/service than the one being advertised
- not disclosing that a testimonial was incentivised (e.g. discount, free product, affiliate commission)
If you work with influencers or affiliates, you should also check that their messaging aligns with your own compliance standards - because their posts may be treated as advertising for your business.
5. GST And “Hidden” Tax Language
If you sell to consumers, most of the time you’ll want pricing that is easy to compare and doesn’t surprise people at checkout.
Where businesses can get into trouble is when they say “$110” in one place and then add GST later, or they advertise “$100” without making it clear whether that price is GST-inclusive.
As a baseline, make sure you’re consistent and clear about whether prices are GST-inclusive, particularly where you sell to the public. If you use “ex GST” pricing, the display needs to be handled carefully - especially in mixed B2B/B2C settings. A helpful reference point is how to display prices and GST.
Note: this section is general information only and isn’t tax advice. GST treatment and invoicing can be technical - if you’re unsure, it’s worth checking with your accountant or tax adviser.
A Practical Pre-Publish Checklist To Avoid Misleading Ads
If you want a system your team can actually use, you need something more practical than “don’t mislead”. Below is a simple checklist you can apply to most ads, landing pages and promo emails.
Step 1: Identify The “Big Promise” In The Ad
Every ad has a main takeaway - the one thing you want customers to believe. Start by asking:
- What is the single most persuasive claim on this page/post?
- What would a customer repeat to a friend after reading it?
- What assumption might a rushed customer make?
That’s the claim you should stress-test.
Step 2: Confirm You Can Substantiate The Claim
If your ad makes a factual claim, you should be able to support it.
Substantiation might be:
- product testing results
- supplier documentation and specifications
- your own business records (e.g. delivery times, success rates)
- clear terms that show what is included/excluded
It’s not enough that a claim “sounds right” or that a competitor says it. If you ever need to justify the claim (to a customer, platform, regulator, or court), you want evidence ready.
Step 3: Check The “Overall Impression” (Not Just The Fine Print)
Even accurate fine print can’t “save” an ad if the headline creates a misleading impression.
For example, if your headline says “Free Delivery Australia-Wide” and the fine print says “excluding WA/NT and remote locations”, you’ve created a mismatch. The fine print should clarify, not contradict.
Try this test: if you removed the fine print, would the main message still be true?
Step 4: Look For Common “Danger Words”
Some words are naturally risky because they imply certainty or a typical outcome.
Do an extra check when you use language like:
- “guaranteed”, “will”, “always”, “never”
- “best”, “#1”, “leading”, “award-winning”
- “instant”, “permanent”, “risk-free”
- “only X left”, “ending tonight”, “limited time”
You can still use these words - you just need to ensure they’re true, supportable, and not likely to create an incorrect impression.
Step 5: Make Sure Your Team Can Deliver What Marketing Promises
Compliance isn’t only a marketing problem - it’s an operations problem too.
If you advertise:
- same-day shipping
- 24/7 support
- “bookings available this weekend”
- “fixed price” services
…make sure your systems and staffing can realistically deliver that experience.
A common mismatch is where the ad is written by a marketing contractor, but your internal team is unaware of the promise and can’t fulfil it consistently.
What Does The ACL Actually Prohibit (And What Are The Consequences)?
When we talk about misleading ads, the core ACL concept you’ll see referenced is misleading or deceptive conduct.
In plain English: you can’t create an overall impression that leads customers to believe something untrue (or likely untrue), especially when that belief influences their decision to buy.
For a deeper breakdown of what regulators and courts look at, the principles are closely aligned with misleading or deceptive conduct and how it operates under the ACL, including ACL section 18.
So What Can Happen If Your Ads Are Misleading?
The risk isn’t only theoretical. Consequences can include:
- customer disputes and refunds (including chargebacks)
- platform enforcement (ads rejected, accounts restricted, listings removed)
- complaints to consumer regulators (including the ACCC and state bodies)
- legal claims from customers, competitors, or others affected
- penalties in serious cases (particularly where there’s widespread impact or repeated conduct)
Even if a matter never escalates to a regulator, misleading ads can cause brand damage quickly - especially in the age of screenshots and review platforms.
How To Build A Compliant Advertising System (Not Just A One-Off Fix)
Most small businesses don’t want to “police” every caption. You want a repeatable system that helps you move quickly without unnecessary risk.
Here are practical ways to build that system.
Create A Simple Approval Process For High-Risk Claims
Not every post needs a legal review. But certain categories should trigger an internal check, such as:
- price and discount campaigns
- time-limited or scarcity campaigns
- health, safety or performance claims
- comparative claims (“better than”, “cheaper than”, “the best”)
- warranty and refunds messaging
Even a 10-minute review using the checklist above can prevent months of problems later.
Align Your Website, Terms, And Checkout Experience
Your website and checkout flow are part of the “overall impression”. If your ad says one thing but your Terms & Conditions say another, customers will usually rely on what they saw first.
It often helps to have clear Website Terms & Conditions that match what you’re advertising (for example, delivery timeframes, subscription billing, acceptable use, and limitations).
Be Careful With Cancellation And Refund Messaging
Small businesses often want to protect cash flow by using “no refunds” or “strict cancellation” policies. The risk is that broad statements can contradict consumer rights under the ACL, depending on what you sell and how you sell it.
If you charge cancellation fees or have strict change policies, it’s important that:
- the fees are disclosed clearly before purchase
- the fee structure is not misleading
- your policy doesn’t suggest customers have fewer rights than the ACL provides
This comes up regularly for service businesses (events, beauty, trades, coaching, bookings) and is closely connected to cancellation fees under the ACL.
Make Your Marketing Privacy-Safe (Especially Email And SMS)
If you collect customer emails, run remarketing campaigns, or build subscriber lists, there are privacy and marketing compliance issues that can overlap with advertising claims.
At a minimum, you’ll generally want a clear Privacy Policy explaining what personal information you collect and how you use it.
If you send promotional messages, you should also check the rules around consent, identification and unsubscribe requirements - particularly for email campaigns - which commonly arises in email marketing laws.
Train Your Staff And Contractors On “What Not To Say”
Misleading ads aren’t only created by your marketing manager. Sales staff, customer support, and contractors can create risk too.
Consider giving your team a short “compliance script” covering:
- what outcomes they can and can’t promise
- how to describe pricing (including add-ons)
- what to say about timeframes (shipping, completion dates, booking availability)
- how to handle customer questions about refunds and warranties
This is especially useful if your team responds to DMs and comments quickly, where “off the cuff” answers can accidentally become misleading.
Key Takeaways
- Ads that mislead customers aren’t just about false statements - they can be half-truths, missing information, or an overall impression that leads customers to the wrong conclusion.
- High-risk areas include pricing, discounts, “limited time” campaigns, performance claims, testimonials, and warranty/refund messaging.
- A practical pre-publish checklist (substantiate claims, check overall impression, avoid contradictory fine print) can prevent most issues before they start.
- Advertising compliance works best as a system: clear approval steps for high-risk campaigns, aligned website terms, and consistent staff messaging.
- Where your ads touch on cancellations, warranties, subscriptions, or marketing communications, make sure your policies don’t accidentally contradict the ACL or create confusion.
If you’d like help reviewing your advertising, promotions, website wording, or customer terms so your marketing can grow confidently without legal surprises, call us on 1800 730 617 or email team@sprintlaw.com.au for a free, no-obligations chat.
