Marketing is part of running a small business. You want to stand out, win customers, and explain why your product or service is worth paying for.
But when advertising gets too “optimistic” (even accidentally), it can cross into misleading territory - and that’s where legal risk, customer complaints and regulator attention can start to stack up.
In Australia, misleading and deceptive conduct is a major focus of the Australian Consumer Law (ACL). It applies to businesses of all sizes, across every industry, and it can cover far more than just “ads” (think: sales calls, website claims, invoices, social media, product packaging, and even what you don’t say).
Below, we’ll walk you through what “misleading” really means in practice, common risk areas for small businesses, and the habits and documents that can help you stay compliant while still marketing confidently.
What Does “Misleading Or Deceptive Conduct” Mean In Australia?
Under the ACL, businesses must not engage in conduct that is misleading or deceptive (or likely to mislead or deceive) in trade or commerce.
That’s a broad rule on purpose. It means your business can get into trouble for:
- making a statement that’s incorrect
- creating an overall impression that isn’t true (even if individual words are technically accurate)
- leaving out information that customers need to make an informed decision
- presenting key information in a way that’s unclear, hidden, or easily misunderstood
Importantly, “misleading” isn’t limited to intentional lies. You can breach the ACL even if:
- you genuinely believed the claim was true
- your supplier gave you the information and you repeated it
- the customer “should have known better”
- you used fine print (but the headline message was still misleading overall)
It’s About The Overall Impression
One of the most common traps for small businesses is focusing on whether each sentence is technically correct, while missing the bigger picture: the ACL looks at the overall impression created for the audience.
For example, if your webpage strongly suggests a feature is included in your service, but it’s only available on a higher tier, customers may still be misled even if there’s a note buried at the bottom.
Silence Can Be Misleading Too
You don’t always have to say something untrue to be misleading. Sometimes the issue is what isn’t said.
For instance, if a product has a limitation (compatibility, required add-ons, important exclusions, expiry dates, ongoing costs), and you don’t clearly disclose it before purchase, that omission may be misleading depending on context.
Common “Misleading” Risk Areas For Small Business Marketing
Most small businesses aren’t trying to trick anyone. The problems usually come from growth, fast marketing cycles, and inconsistent messaging across platforms.
Here are common places where misleading conduct shows up.
Pricing And “Hidden” Costs
Pricing is one of the fastest ways to trigger complaints - especially if your marketing highlights one figure but customers later discover extra fees.
Common examples include:
- advertising a price “from $X” when most customers will pay more
- not clearly stating that shipping, booking fees, or setup costs apply
- presenting a monthly price when the customer is committing to a longer minimum term
- advertising an “intro rate” without making the ongoing price obvious
Even if you have a terms page, pricing clarity needs to be strong at the point where the customer makes their decision.
“Best”, “#1”, “Guaranteed”, “Clinically Proven” And Similar Claims
Bold marketing language is normal - but it becomes risky when it sounds like a factual promise that you can’t back up.
Be careful with claims like:
- “guaranteed results”
- “works in 7 days”
- “cures” or “treats” (especially for health-related products/services)
- “Australia’s best” or “#1” (unless you have a defensible basis)
- “certified” or “approved” (if you don’t actually hold that certification/approval)
If you want to use strong claims, build your internal process around evidence. That way, your marketing team isn’t guessing (and your future self isn’t scrambling if there’s a complaint).
Before-And-After Images, Testimonials And Reviews
Testimonials and case studies can be powerful - and they’re also an area where customers often rely heavily on what they see.
To reduce misleading risk:
- make sure testimonials are genuine and reflect real experiences
- don’t edit testimonials in a way that changes their meaning
- avoid presenting “best case” outcomes as typical outcomes
- be careful with before-and-after photos (including lighting, angles, filters, and timeframes)
If you’re using influencers or affiliates, you should also ensure their content stays within the same guardrails as your own advertising (for example, no unsubstantiated performance claims). In some cases, businesses can still be held responsible for representations made by people marketing on their behalf, especially where the business has authorised, directed, or benefited from the promotion.
Fine Print Disclaimers That Don’t Fix The Headline
Disclaimers can help clarify things - but they don’t automatically “cancel out” a misleading headline.
If the headline gives a strong impression (for example, “free”, “unlimited”, “same-day delivery”, “no contracts”), you need to make sure the qualification is:
- clear
- close to the main claim
- easy to understand
- not contradictory to the dominant message
A good rule of thumb is: if a reasonable customer would miss it or misunderstand it, it’s not doing enough work.
Comparisons With Competitors
Many businesses compare themselves to “other providers” or “traditional options”. Comparisons can be fine, but they can also be misleading if they’re vague or not based on like-for-like comparisons.
Be careful with statements like:
- “50% cheaper” (cheaper than what, and based on which scenario?)
- “highest quality” (based on what measure?)
- “faster than the rest” (who is “the rest”?)
If you want to compare, keep records of what you compared, when, and what sources you relied on.
What Can Happen If Your Business Is Misleading?
If your conduct is misleading, the consequences can be more than a single refund. Depending on the situation, you could be dealing with:
- customer complaints (and the time cost of managing them)
- refunds, returns, or chargebacks
- disputes where customers claim they relied on misleading statements
- regulator action (including the ACCC and state fair trading bodies)
- court orders, including injunctions, corrective advertising, or damages
- reputation damage (especially if the issue spreads online)
Even if the legal risk feels “unlikely”, the commercial risk is often very real: unclear advertising can quickly erode trust and drive churn.
Misleading Can Also Create Contract Problems
Misleading statements can also affect your contracts - especially where customers say they entered into the deal based on what you told them.
This is where your customer-facing documents matter. Clear terms can help manage expectations, define what is and isn’t included, and reduce misunderstandings.
For many small businesses, this starts with strong Business Terms that align with what you actually sell and how you deliver it.
How To Reduce Misleading Risk (Without Killing Your Marketing)
You don’t need “boring” marketing to stay compliant. The goal is to set up a simple system so your messaging is clear, consistent, and backed by reality.
1) Create A “Claims Checklist” For Your Marketing
If you have more than one person creating content (or you use freelancers/agencies), a checklist helps keep things consistent.
Your internal checklist might include questions like:
- Is this claim objectively true, or is it an opinion/puffery?
- What evidence do we have to support it?
- Is there anything important a customer needs to know (limitations, exclusions, extra costs)?
- Does the headline match the fine print?
- Is the offer still current (or has it expired/changed)?
This kind of process is especially useful for fast-moving channels like social media and paid ads.
2) Keep One Source Of Truth For Prices, Inclusions And Exclusions
Many “misleading” issues happen because your website says one thing, your staff say another, and your invoices or onboarding emails say something else.
Try creating one internal “source of truth” document that sets out:
- your current pricing
- what’s included in each package
- key exclusions
- refund/return approach (consistent with ACL)
- delivery timeframes or performance limits
Then make sure your team uses it when updating your website, quotes and sales scripts.
3) Train Your Sales Team (And Give Them Approved Scripts)
Misleading conduct isn’t only about ads. It can also happen in conversations - including calls, DMs, and in-store discussions.
If you have staff (or contractors) selling your services, provide:
- approved descriptions of what you offer
- approved answers for common questions
- clear guidance on what they should never promise
If you’re hiring employees who communicate with customers, having the right Employment Contract and policies can also help set expectations around compliance and brand messaging.
4) Make Sure Your Website Terms Match Your Actual Practices
Your website can be a major risk area because it’s often where customers form their first impression.
Strong Website Terms and Conditions can help clarify things like:
- what your product/service includes
- how subscriptions renew
- delivery and shipping terms
- user responsibilities (for example, providing correct information)
- limits on your services (where appropriate and legally enforceable)
The key is alignment: if your terms say “48-hour response times” but you’re regularly taking a week, that mismatch can create both customer frustration and legal risk.
5) Handle Customer Data Carefully (Especially In Marketing)
If you collect customer personal information (for online orders, mailing lists, enquiries, or remarketing), you should be clear about what you collect and how you use it.
A clear Privacy Policy supports transparency and helps customers understand what happens with their data.
This doesn’t replace your ACL obligations, but it’s part of building trust and reducing complaints (especially when marketing involves emails, SMS, or targeted ads).
Key Documents That Help You Avoid Misleading Disputes
There’s no single “misleading” contract that solves everything. But the right suite of documents can help you communicate clearly and consistently, which goes a long way to preventing disputes.
Depending on your business model, you may want to consider:
- Customer Terms / service terms: These set out what you’re providing, timelines, pricing, exclusions, and the process for variations or cancellations.
- Website Terms and Conditions: Particularly important if you sell online, run subscriptions, accept bookings, or have user accounts.
- Refund and return wording: Your policies should be consistent with Australian Consumer Law and not overstate limitations on customer rights. Be especially careful with “no refunds” statements.
- Supplier agreements: If your marketing relies on supplier specs (performance, materials, compatibility), strong supplier terms can help you manage what information you can confidently rely on.
- Employment and contractor documents: If team members are communicating with customers, your agreements and policies should reinforce consistent messaging and compliance expectations.
If your business has multiple owners or you’re bringing in investors, it’s also worth ensuring your internal governance is strong. A tailored Shareholders Agreement can help align decision-making - which matters when you’re approving marketing strategy, pricing changes, and risk appetite.
And if you operate through a company, your Company Constitution helps set the rules for how the company runs, which supports better compliance processes as you grow.
Key Takeaways
- Misleading and deceptive conduct can include incorrect statements, unclear fine print, or omissions that create a false overall impression.
- You don’t need to intend to mislead - even honest mistakes can still be misleading under the Australian Consumer Law.
- High-risk areas for small businesses include pricing, “free” offers, testimonials, performance guarantees, and unclear inclusions/exclusions.
- Practical safeguards include a marketing claims checklist, staff training, and keeping one “source of truth” for your offers.
- Well-drafted customer terms, website terms and internal policies help reduce misunderstandings and disputes by aligning what you promise with what you deliver.
If you’d like help reviewing your marketing, customer terms, or website wording to reduce misleading risk, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
