Before you run the gimmick: misleading and deceptive conduct for SMEs
It's 4pm on a Thursday. Someone in the team has a great idea for the weekend: a flash sale, a "last chance" countdown, a giveaway that will blow up the comments. The graphics are ready. The caption is clever. All that's left is to hit post.
But before you do – hit pause.
Misleading or deceptive conduct is when a business, in trade or commerce, does or says something that is likely to lead people into error. It's set out in section 18 of the Australian Consumer Law, and it applies to every business in Australia, from a two-person startup to a national retailer. It covers ads, social posts, packaging, website copy, influencer content, even what your team says on the phone.
Most gimmicks that land businesses in trouble weren't designed to trick anyone. They were designed to sell (quickly!) and nobody stopped to read them the way a customer would.
How the test works
The question is not what you intended. It's what an ordinary person would reasonably take away. Three things follow from that.
1. Intent doesn't save you. You can break the law without meaning to. Good faith might help with the penalty if you’re lucky, but it won't change the answer.
2. The overall impression counts. Courts look at the whole ad as a reader sees it: the headline, the image, the size of the font, how fast it scrolls past. A statement can be technically true and still mislead.
3. Fine print can't fix a headline. If the big words say "Free" and the small words say "with any purchase over $200", the small words usually lose. A disclaimer can clarify. It can't contradict.
Silence counts too. Leaving out something a customer would expect to be told may be just as misleading as saying something false.
Six gimmicks that go wrong
None of these are no-go’s, but each one needs to be true, complete, and clear at first glance.
| The gimmick | Where it trips up | Do this instead |
|---|---|---|
| Was $200, now $99 | The “was” price was never really charged, or only for a day | Use a price you actually sold at for a reasonable period |
| “Free” gift or trial | The catch sits in the fine print: a minimum spend, a rolling subscription, a hard-to-find cancel button | Put the condition next to the word “free”, in the same size |
| “Only 3 left” or a countdown timer | The stock never runs out, or the timer resets on refresh | Only claim scarcity or deadlines that are real |
| Reviews and testimonials | Staff, friends or paid creators posting as happy customers, or the bad reviews quietly deleted | Show genuine reviews, and label paid or gifted content |
| Giveaways and competitions | Unclear entry terms, prizes that change, winners never announced | Publish full terms first. Games of chance may need a permit in NSW, SA or the ACT |
| “Eco”, “sustainable”, “carbon neutral” | Broad green claims with nothing behind them | Make a specific claim you can prove, and keep the evidence on file |
What it can cost
For many breaches of Australian Consumer Law, the maximum penalties can be significant.
For corporations, breaches of ACL can be the greatest of $100 million, three times the benefit gained, or 30% of turnover during the breach period.
Those penalties attach to the specific rules that sit beside section 18, such as false or misleading representations about price, testimonials or a product's qualities. Section 18 on its own doesn't carry a fine, but it opens the door to injunctions, refunds, compensation and corrective advertising.
And it isn't only the ACCC watching. Customers can bring claims. So can competitors, who tend to read your ads very closely.
For most small businesses, the bigger cost is quieter: the time, the legal fees, and a public correction that sits on your page longer than the original promotion ever did.
Five questions before you hit post
1. Is every claim true today? Prices, stock levels, deadlines, ratings.
2. Can we prove it? If someone asked for the evidence tomorrow, could you send it?
3. What would a customer take away in three seconds? Read it on your phone, at scrolling speed.
4. Is the catch as loud as the offer? Conditions belong next to the claim, not three taps away.
5. Would we be comfortable seeing it in a news story? If the answer makes you wince, rework it.
Keep the fun. Lose the risk.
Good marketing and good compliance want the same thing: a customer who gets exactly what they were promised, and comes back.
If you've got a campaign in the works and want a second set of eyes, we review promotions, terms and ad copy for an upfront fixed fee. Five minutes now beats a correction notice later.
This article is general information only and isn't legal advice. Speak to us about your specific situation.