Section 18 of the Australian Consumer Law (ACL) (found in Schedule 2 of the Competition and Consumer Act 2010) provides a basis for a claim of misleading and deceptive conduct as follows:
“A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
A person includes a company or an individual.
So, what does this mean? What actually is misleading and deceptive conduct?
‘Deception’ is the act of deliberately leading another person into error (ie fraud), while ‘misleading’ requires no such intention. Therefore, you can mislead someone by mistake and still be held accountable.
Misleading and deceptive conduct can result from:
- Statements
- Representations; and
- Omissions (ie where the person has remained silent when they should have otherwise provided clarification).
The conduct is normally in relation to the price, value or quality of goods/services. Although, it is not confined to these factors.
While the misleading and deceptive conduct provision is primarily used to provide consumer protection (for unfair trade practices), it can apply to anyone who is buying or selling goods/services, other than in relation to private transactions.
Some obvious examples of misleading and deceptive conduct include:
- A pain relief brand which advertises to specifically treat different types of pain (eg back pain, head pain, joint pain) – where each product contains the same ingredient and no formulation is any more or less effective than others;
- A business making a ‘buy one, get one free’ offer – where they increase the price of the first item to cover losses;
- Internet service providers advertising “unlimited” downloads – where they disclose in small print that internet speeds will decelerate for specific time periods and after a certain download threshold is reached; and
- Claiming a business opportunity will make a profit of $2M – where the seller/offeror has no reasonable grounds for this assertion.
This leads us to the next question. What isn’t misleading and deceptive conduct?
Wildly exaggerated, fanciful or vague claims (“puffery”) will not trigger an action of misleading and deceptive conduct. An example of this would be a statement on our website saying we are the best law firm in the world (mind you, if you ask me, we are pretty great!). It is common for people to use puffery in advertising.
If you believe you have been subjected to misleading and deceptive conduct, we may be able to help! Contact us today to arrange an appointment.