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ATTENTION CONSUMERS: BEWARE MISLEADING ADVERTISEMENTS

More often than not consumers see and read headline advertising, such as "Fly to Sydney for $50". However, it is very common that such headline advertising is subject to the terms and conditions attached to them.

Sometimes consumers can be misled or deceived by a headline advertisement if they are not drawn to the fine print in the terms and conditions of the advert or there is a great disparity between the headline advertisement and its terms and conditions.

Therefore, persons who use headline advertising to promote their goods or services must be careful not to breach sections 9 and 13(i) of the Fair Trading Act 1986 ("the Act"), which provides that:

  • No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
  • No person shall, in trade, in connection with the supply or possible supply of goods or services or with the promotion by any means of the supply or use of goods or services:
    Make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

If you put out a headline advertisement to the public at large or to a target audience, then it will be subject to the public or the target audience perception of the advert, except to persons who are unusually not smart or ill equipped, or those whose reactions are extreme or farfetched.

The object of the Act is to protect consumers. The Courts will look at the following if a headline advertisement has breached section 9 and 13(i) of the Act in respect of consumers at large or if the advert is targeted to a particular audience:

  • What is the dominant message of the headline advertisement;
  • What is the overall impression of the headline advertisement;
  • What proximity does the headline advertisement have with its terms and conditions;
  • What prominence does the terms and conditions have with the headline advertisement;
  • Whether the terms and conditions cause the headline advertisement to be misleading or deceptive;
  • What disparity (if any) is there between the headline advertisement and the terms and conditions.

From applying the above, the Courts will look at whether an advertisement as a whole has lured consumers into a mistake by a wrongful belief caused by the advertiser.

Consumers can file a complaint to the Commerce Commission if they feel they have been misled or deceived by a headline advertisement.

If you use headline advertising to promote your goods or services, we can review your headline advert and its terms and conditions to ensure you are not breaching our consumer laws. If you believe a competitor is breaching the law we can review the matter. 

Written by James Moran at 09:00
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