Misleading and Deceptive Conduct – Avoiding Unfair Trading Practices

Australian businesses must meet specific standards in providing goods or services. The Australian Consumer Law (ACL) is set out in Schedule 2 of the Competition and Consumer Law Act 2010 (Cth) and applies in commercial transactions or consumer transactions.

The ACL protects consumers from unfair business practices.

Section 18 of the ACL prohibits conduct, in trade or commerce (within Australia or between Australia and places outside of Australia) that is misleading or deceptive or is likely to mislead or deceive.

In accordance with the ACL, goods and services are acquired by a consumer if:

– the amount paid or payable for the goods, did not exceed $40,000; or

– the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption; or

– the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads.

Examples of misleading or deceptive conduct

Misleading or deceptive conduct includes, but is not limited to actions such as:

– Advertisements
– Promotions
– Statements
– Representations
– Quotations

Examples include failing to disclose relevant information about the quality, value or grade of goods or services, or the place of origin of a product, to a consumer in trade or commerce. This can be considered as misleading or deceptive conduct.

Silence or non-disclosure of material facts or information can also be considered misleading or deceptive, especially when a person fails to alert another to facts known only to them, and the facts are relevant to a consumer’s decision.

It is an offence to make any false or deceptive statements, or to deliberately hide any material facts, in order to persuade a buyer to enter into a contract. A material fact refers to information that could influence a potential buyer’s decision to enter the contract or determine the price they are willing to pay.

To protect your business from unfair practices, ensure that your advertising is clear and transparent, and that product and service descriptions are up to date and accurate.

Contravention of Section 18

Breaches of the ACL attract fines and pecuniary penalties. Breaches can be civil or criminal and can be imposed by a Court. Depending on various factors and the specific facts of each case, it could lead to significant monetary fines or even imprisonment.

If your business requires legal advice about managing business risks and consumer protection issues, please contact Ita Wong, Associate ita.wong@lewisholdway.com.au or John Wardlaw, Principal johnw@lewisholdway.com.au