Understanding Misleading Conduct in Australia

Credit: Alexander Mils (Unsplash)

Understanding Misleading Conduct in Australia

What every business owner needs to know before making bold claims

You have a great product. You have tested it, refined it, and you know what it can do. When it comes time to write your marketing copy, the language almost writes itself. Best in class. Revolutionary. Faster than anything else on the market. Results in minutes.

Then someone mentions the Australian Consumer Law. Suddenly, those confident claims feel less straightforward. Can you really say what you want about your own product? Where is the line between persuasive marketing and misleading conduct? And why does it sometimes feel like the law is designed to stop you from saying anything interesting at all?

The reality is more nuanced — and far more practical — than that.

Australian Consumer Law does not stop you from marketing your product effectively. What it does is hold you accountable for the expectations you create in the minds of consumers. The question is not whether your claims are technically true under ideal conditions. The question is whether an ordinary person, encountering your marketing in the real world, would walk away with an impression that is accurate.

That distinction matters more than many businesses realise. Misleading conduct is one of the most common areas of enforcement by the Australian Competition and Consumer Commission. It also drives customer complaints, refund demands and reputational damage — often at the exact moment a business is trying to build momentum.

Understanding how the law works is not about being cautious. It is about being strategic.

At the centre of this area is section 18 of the Australian Consumer Law, which prohibits conduct that is misleading or deceptive or likely to mislead or deceive. It is deliberately broad. It applies not just to formal advertising, but to everything a business communicates publicly — website copy, packaging, social media posts, influencer content, product demonstrations and even sales conversations.

Alongside this sits section 29, which targets specific types of false or misleading representations, including claims about performance, quality, benefits, price and availability. Taken together, these provisions cast a wide net. But the legal test itself is deceptively simple: would this conduct mislead a reasonable consumer?

That “reasonable consumer” is not a legal fiction. Courts have repeatedly confirmed that the test sits somewhere between the overly trusting and the overly sceptical. In Campomar Sociedad Limitada v Nike International Ltd and Google Inc v Australian Competition and Consumer Commission, the courts made clear that the law is concerned with the ordinary member of the target audience — someone with common sense, but not someone who carefully dissects every word or searches for disclaimers.

Context is everything. The same claim can be acceptable in a specialist publication aimed at industry professionals, but misleading in consumer-facing marketing. Courts look at the overall impression created, not individual words in isolation. As confirmed in Butcher v Lachlan Elder Realty Pty Ltd, you cannot cure a misleading headline with fine print. What matters is what sticks in the consumer’s mind after a brief interaction.

Perhaps the most surprising aspect for many businesses is that intention is irrelevant. Even if you genuinely believe your claims are accurate, you can still breach the law if the impression created is misleading. That principle, reinforced in Yorke v Lucas, is what makes this area particularly risky. Good faith is not a defence.

What gets businesses into trouble is rarely outright dishonesty. More often, it is enthusiasm. Absolute claims, unqualified comparisons and optimistic timelines can all cross the line. A statement that a product “delivers results in minutes” may be technically true in controlled conditions, but misleading if most users will not experience that outcome. A claim that something is “better than competitors” may reflect internal testing, but still fail if the comparison is not fair or substantiated.

The law also captures what you do not say. If your marketing highlights a key benefit but omits a significant limitation that would affect a consumer’s decision, that silence can be misleading. The overall picture matters. A technically accurate statement can still mislead if it creates an incomplete or distorted impression.

For businesses operating in fast-moving environments, particularly online, these risks are amplified. Social media rewards bold, simplified claims. Influencer marketing compresses complex messaging into seconds. Digital campaigns are often rolled out quickly, without the same level of internal scrutiny as traditional advertising. All of this increases the risk that the impression created will go further than the evidence can support.

This is where legal advice becomes commercially valuable, not just protective.

The most effective misleading conduct advice is not about removing claims. It is about refining them. Often, the difference between a risky statement and a defensible one is a matter of nuance — adding context, clarifying scope or adjusting language so that it reflects what consumers can realistically expect. The marketing remains compelling, but the legal risk drops significantly.

Timing is critical. Once a campaign is live, the damage can escalate quickly. Complaints can trigger regulatory attention. Competitors may raise concerns with the ACCC. Consumers may rely on claims that cannot be delivered. At that point, businesses are often dealing with corrective advertising, refunds or formal investigations — all of which are far more costly than getting it right at the outset.

There is also a strategic dimension that is often overlooked. The ACCC does not enforce evenly across all sectors. It focuses on priority areas, which currently include sustainability claims, digital marketing practices and influencer endorsements. Understanding those priorities allows businesses to assess risk more realistically and avoid becoming an unintended test case.

What this ultimately comes down to is alignment. The closer your marketing aligns with the actual consumer experience, the lower your legal risk and the stronger your brand. Businesses that consistently overpromise may generate short-term attention, but they also generate complaints, refunds and scrutiny. Businesses that set accurate expectations build trust, and trust compounds over time.

For business owners and marketing teams, the practical takeaway is simple but powerful. Before publishing, step back and read your claims as a customer would. Ask what expectation is being created. Ask whether that expectation is one your product consistently meets. If there is a gap, that is where legal risk sits.

At Sharon Givoni Consulting, we work with businesses across Australia to review marketing, assess substantiation and advise on how to communicate confidently while staying within the law. That includes pre-launch reviews, ongoing campaign advice and responding to ACCC enquiries where issues arise.

The goal is not to water down your messaging. It is to make sure that what you say is something you can stand behind.

Because in the end, misleading conduct law is not about restricting marketing. It is about ensuring that when a customer says yes, they get what they were led to expect.

A Quick Misleading Conduct Check

Every piece of marketing creates an expectation. The question is whether it is one your product can consistently meet.

Step back and ask yourself a few critical questions. If a regulator, competitor or customer looked closely at your claims, would you be comfortable defending them?

Start with the overall impression. Not the fine print, not the technical detail — but what an ordinary customer would take away after a quick read. If the headline promise is stronger than what most users will actually experience, that is where risk begins.

Then consider your evidence. Could you substantiate each key claim with real data, testing or reliable information? It is not enough that something is possible. The law expects that your claims reflect what consumers can realistically expect in normal conditions.

Pay attention to what you have not said. If there is an important limitation, condition or variable that would influence a customer’s decision, leaving it out can be just as misleading as saying something incorrect.

Finally, consider timing and delivery. If you are making promises about results, timeframes or future performance, ask whether those outcomes are consistently achievable — not just theoretically possible.

If there is any hesitation in answering these questions, that is usually the point at which legal input becomes valuable.

What are your customers really taking away from your claims? Credit: Towfiqu Barbhuiya (Unsplash)

Please note the above article is general in nature and does not constitute legal advice.

Please email us info@iplegal.com.au if you need legal advice about your brand or another legal matter in this area generally.