Navigating Misleading and Deceptive Conduct Under Australian Consumer Law: A Practical Guide

Clear, honest marketing builds trust - and trust drives repeat business. But if ads, website claims or sales scripts accidentally cross the line, your business could face complaints, refunds or even penalties.

Under the Australian Consumer Law (ACL), all businesses must avoid conduct that misleads or deceives (or is likely to). This isn’t just about obvious falsehoods - it’s about the overall impression your words, images and offers create for an ordinary customer.

In this practical guide, we’ll break down what “misleading or deceptive conduct” actually means in Australia, where small businesses commonly get caught out, and the steps you can take to stay compliant day-to-day.

What Counts As Misleading Or Deceptive Conduct Under The ACL?

The starting point is section 18 of the ACL, which prohibits misleading or deceptive conduct in trade or commerce. The rule is intentionally broad so it can cover a wide range of behaviour, from ad copy and web pages to sales calls and in‑store signage. For a deeper explanation, see this overview of section 18.

“Conduct” includes anything that might influence a consumer: statements, images, comparisons, testimonials, demonstrations, pricing, packaging, omissions (leaving key facts out) and even tone or placement. What matters is the overall impression created for your intended audience.

Silence can also mislead if you leave out information a reasonable customer would expect to know, especially where you’re making headline claims. Courts look at the context - who you’re talking to, how the message is delivered, and what a typical customer would take away at a glance.

Common Examples For Small Businesses

• Overstating benefits or performance features (e.g. “waterproof” when it’s only splash‑resistant).
• Comparisons that imply superiority without substantiation (e.g. “50% better than Brand X” without robust evidence).
• “Was/Now” pricing and countdown timers that don’t reflect a genuine previous price or genuine scarcity.
• Claims about availability or delivery timeframes that you can’t consistently meet.
• Selective testimonials or star ratings that omit prominent negative experiences, creating a skewed picture.
• Fine print that contradicts the headline message (small print won’t save a misleading headline).

The ACL also contains specific rules that carry serious penalties if breached - especially around false or misleading representations, such as price, quality, origin or consumer rights. If you make specific claims in ads or product pages, have a look at section 29 to see the kinds of representations that are risky.

If you want a simple framework for thinking about evidence, silence and context, this summary of the elements of misleading or deceptive conduct is a helpful place to start.

How Do You Assess The “Overall Impression”?

Courts use a pragmatic test: What would an ordinary member of your target audience think the message means? Not a lawyer. Not a hyper‑vigilant reader with a magnifying glass. The typical customer, reading or viewing at normal speed.

Key points to keep in mind:

• Headlines carry more weight than fine print. If the big claim says one thing and the small print walks it back, you still risk misleading customers.
• Context matters. The same words in a technical brochure to engineers might not mislead, but could mislead consumers in a general Facebook ad.
• Evidence first. You need reasonable grounds for any factual claim - before you publish it. You can’t “prove it later.”
• Disclaimers must be clear and proximate. If important limitations apply, put them where a consumer will actually see them, in plain language.

If your business sells online, your website is often a customer’s first (and sometimes only) touchpoint. Make sure your product pages, FAQs and landing pages are consistent with your headline claims, and back them up with clear, accessible Website Terms and Conditions that don’t contradict your marketing.

High‑Risk Areas To Watch In Marketing And Sales

Most small businesses want to promote confidently without crossing legal lines. Here are the pressure points we see most often - plus practical ways to stay on the right side.

Pricing, “From” Prices And Drip Fees

Prices must be accurate and reflect the total cost the consumer is required to pay, including mandatory fees and charges that most customers can’t opt out of. Add‑ons and surcharges that only appear at checkout can create a misleading impression about a product’s true price. If you use “from $X” pricing, ensure a meaningful proportion of stock is genuinely available at that price and that any conditions are clear. For a deeper dive, see the guide to advertised price laws.

Testimonials, Star Ratings And Reviews

Reviews must be genuine and not cherry‑picked in a way that creates a false impression. Don’t post fake reviews, incentivise positive reviews without disclosure, or suppress negatives to skew your rating. If you run into malicious or fake posts about your business, there are legitimate options for handling fake Google reviews while staying within the law.

Scarcity, Countdown Timers And “Limited Time” Claims

Only use urgency tactics when they reflect reality. If you say “limited stock,” be able to show it. If a sale ends at midnight, don’t quietly extend it. Misusing urgency can cross into misleading conduct quickly.

Comparative Claims And “Best/No.1” Statements

Comparisons must be apples‑to‑apples and backed by current, verifiable data. Superlatives like “best” or “No.1” can mislead if they imply an objective ranking or award you don’t have.

Consumer Guarantees, Warranties And “No Refunds”

You can’t exclude or restrict the ACL’s non‑negotiable consumer guarantees. Phrases like “no refunds” are risky unless accompanied by a clear explanation of the rights customers have under law. If you offer extras (e.g. an extended warranty), ensure your wording doesn’t misrepresent automatic rights as paid add‑ons.

Free Trials, Subscriptions And Auto‑Renewals

Be crystal clear about when charges start, how to cancel and what happens after a trial period. Burying key conditions can be misleading and damage trust. It’s wise to sanity‑check your subscription flow against how subscription services should be presented so customers aren’t surprised at renewal.

Competitions, Giveaways And Influencer Marketing

Promotions need clear rules, fair terms and transparent disclosure of any material connection between you and endorsers. If you run contests or use creators, your compliance obligations run across consumer law and advertising standards as well as platform rules. Do not overstate the chances of winning or the value of prizes. If you’re partnering with influencers, make sure their posts are accurate and their disclosures are obvious.

What Happens If You Get It Wrong? Remedies, Penalties And Risk Management

Consequences depend on the conduct and how it’s framed. Customers can seek refunds or compensation, competitors may complain, and regulators can investigate.

• Customer claims. Consumers can seek damages where they’ve suffered loss due to misleading conduct. Section 236 of the ACL sets out the right to recover loss or damage - see section 236 for how courts approach compensation and orders.
• Regulatory action. The ACCC and state regulators can issue infringement notices, accept court‑enforceable undertakings or commence proceedings. For certain false representation offences, courts can impose significant pecuniary penalties.
• Reputational harm. The fastest cost of a misleading campaign is usually customer backlash. It can take far longer to rebuild trust than to gain it.

Risk management is about building good habits:

• Evidence before claims. Don’t publish a factual claim (performance, savings, rankings) unless you already have robust evidence.
• Approval workflows. Set up internal sign‑off for campaigns, landing pages and sales scripts - marketing shouldn’t go live without a legal/quality review.
• Training. Make sure your sales and support teams understand what they can and can’t say about pricing, guarantees and features.
• Consistency. Align headlines, product pages, FAQs, checkout flows and contract terms to avoid mixed messages.
• Fix quickly. If something slips through, correct it promptly, contact affected customers where appropriate, and document what you changed.

Practical Steps To Stay Compliant Day‑To‑Day

You don’t need to be a lawyer to run compliant marketing. These steps will go a long way.

1) Map Your Claims

Make a simple inventory of the promises you make to customers - in ads, on your site, in PDFs, and in sales scripts. For each promise, ask: Is it factual or opinion? What evidence supports it? Is the claim qualified clearly?

2) Use Plain Language (And Put Key Conditions Up Front)

If a big, bold headline could be misunderstood, re‑write it or add a short, nearby qualifier. Don’t rely on a dense paragraph at the bottom of the page.

3) Keep Proof On File

Store test results, supplier certifications, pricing histories and screenshots of competitor comparisons. If challenged, you’ll want time‑stamped proof ready to go.

4) Get Your Online House In Order

Consistency across your digital touchpoints helps avoid confusion. Clear product pages, accessible policies and accurate checkout flows reduce risk. At a minimum, ensure your website has up‑to‑date Website Terms and Conditions that match how you actually sell and fulfil orders.

5) Price Transparently

Show the minimum payable price early, reveal unavoidable fees upfront and ensure “from” prices are genuine. Avoid designing checkout flows that surprise customers late in the process. The rules on advertised price laws are a good yardstick.

6) Build A Quick Review Loop

Before launch, run your campaign through a short checklist: Is the headline accurate? Are conditions next to the key claim? Do we have evidence? Is the imagery consistent with reality? A 10‑minute check saves headaches.

What Legal Documents Can Help Reduce Your Risk?

Good documents won’t save a misleading headline - but they do set clear expectations, reduce ambiguity and support a consistent customer experience.

• Website Terms and Conditions: Set out how your site and store work (ordering, pricing, delivery, returns) and align the fine print with your marketing. Consider tailored Website Terms and Conditions if you sell online.
• Terms of Sale or Customer Contract: Clarify inclusions, timelines, service levels and limits so customers understand exactly what they’re buying. A well‑drafted Terms of Sale document helps prevent disputes.
• Warranties Against Defects Policy: If you offer a voluntary warranty, the ACL requires specific wording and disclosures - a compliant Warranties Against Defects Policy avoids misrepresenting consumer rights.
• Disclaimers (used properly): Short, targeted disclaimers can clarify scope or limitations where needed - they must be prominent and consistent with the main message.
• Influencer or Affiliate Agreements: Ensure marketing partners make accurate claims, keep evidence and use required disclosures for paid endorsements.
• Competition/Giveaway Terms: Clear rules and eligibility criteria reduce the risk that a promotion could mislead or disappoint entrants, and they keep your team aligned operationally.

If you’re in doubt about how a campaign will land with a reasonable customer - or whether a claim needs stronger evidence - it’s wise to sanity‑check against section 18, review the specific false representation rules in section 29, and revisit the elements of misleading conduct before you hit publish.

Key Takeaways

• Misleading or deceptive conduct is judged by the overall impression on a reasonable customer, not just the fine print.
• High‑risk areas include headline pricing, urgency/scarcity tactics, comparative claims, reviews/ratings and statements about warranties or refunds.
• Have evidence for factual claims before you publish, and put important conditions clearly next to the main message.
• Keep your online experience consistent and transparent, supported by tailored Website Terms and Conditions and clear Terms of Sale.
• If things go wrong, customers can seek compensation under section 236, and regulators can take action - fix issues quickly and document changes.
• A simple review workflow, team training and the right documents significantly reduce the risk of accidental ACL breaches.

If you’d like a consultation on navigating misleading and deceptive conduct risks under the ACL, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.