Avoid being mislead about price, quality and value

You have the right to expect that a business will not mislead or deceive you. Advertising should never lead you to believe something that isn’t true. This might relate to the value, capabilities or quality of goods and services.

Types of misleading conduct

Misleading advertising

It is illegal for a business to mislead you when advertising goods and services.

A business is likely to be breaking the law if they give you a misleading overall impression. This might be about:

• price
• value
• quality.

Businesses might mislead you without meaning to. The important question is not what they intend to say or do, but what they actually say or do.

Disclaimers and fine print

Businesses must give you all the important facts about goods or services. They cannot hide them in the fine print. Any disclaimers must:

• be prominent and visible
• not be obscured by images, graphics or text
• not undermine or contradict the main offer.

Promises, opinions and predictions

A promise, opinion or prediction can be misleading or deceptive if the business:

• knew it was false
• did not care if it was true or not
• or had no reasonable grounds for making it.

Silence

Businesses must not keep silent about important facts regarding their goods or services. They must give you enough information to make an informed choice. Courts will look at the details of each case to decide if a business’s silence was deceptive conduct.

Examples of misleading conduct

• A transport company gives the impression that it takes freight by air, but it actually sends it by road.
• A mobile phone seller offers free weekend calls, but does not stress that the offer excludes calls to other networks.
• A business places a job advertisement online, but does not specify that the job is commission-based.
• A store advertises a sale as ‘25% off everything’, but still excludes certain items from the sale.
• A business offers or advertises reduced rates to entice customers, but only some items are actually available at that rate.
• A real estate agent advertises a property for less than the minimum price they quoted to the seller.

Not misleading conduct

Puffery

Some ads make claims that are clearly over-the-top because of:

• wildly exaggerated statements or images
• fanciful statements or images
• vague statements or images.

This is called puffery. Businesses are allowed to advertise like this.

However, there is no legal distinction between puffery and misleading or deceptive conduct. A Court will need to decide if a reasonable person would believe that a statement is serious.

Example of puffery

A young man sees an advertisement for a deodorant. The advertisement shows users of the deodorant becoming more attractive and desirable. The young man buys the deodorant, but he notices no change in himself. The deodorant business successfully argues that these claims were fanciful. The young man was unreasonable to take them seriously.

Offensive advertising

You should contact the Advertising Standards Bureau (ASB) if you think an advertisement is offensive.

This might be because it:

• discriminates against somebody’s race, nationality, sex, age, sexual preference, religion, disability or political beliefs
• shows strong violence
• uses strong or coarse language
• portrays sex, sexuality or nudity
• demonstrates poor health or safety
• may cause alarm or distress to children.