'Conduct' includes actions and statements, such as:
- any representation made by a person.
If a business creates an overall misleading impression about the price, value or quality of consumer products or services, they are likely to be breaking the law.
It is the business’s actions and statements that matter – not their intentions. A business can mislead and deceive, without intending to.
A trader's business name suggests an affiliation with a long-established institution. The name may mislead or deceive because of this similarity. The trader's intentions when choosing the name did not matter.
Disclaimers and small print
A business cannot rely on disclaimers buried in small print as an excuse for misleading or deceptive conduct.
A large department store was found to have engaged in misleading conduct when it advertised ‘25 per cent off all clothing’ and ‘15-40 per cent off housewares’, but in small print excluded certain clothing and manchester.
'Puffery' refers to wildly exaggerated, fanciful or vague claims that no reasonable person could possibly treat seriously or find misleading.
A café owner claims to make ‘the best coffee in the world’.
A business claims ‘all your dreams will come true’ if you use a certain product.
Types of misleading conduct
A business can break the law by failing to give relevant information to a consumer.
Silence can be misleading or deceptive when, for example:
- one person fails to alert another to facts known only to them, and the facts are relevant to a decision
- important details a person should know are not conveyed to them
- a change in circumstance meant information already provided was incorrect.
Whether silence is misleading or deceptive will depend on the circumstances of each case.
A consumer who lives in a regional area is buying a mobile phone. The salesman knows where the consumer lives but fails to tell him that the coverage is poor in that area and the phone may be of no use.
Predictions and opinions
Promises, opinions and predictions may be misleading or deceptive if, for example, the person making the statement:
- knew it was untrue or incorrect
- did not care whether it was true or not
- had no reasonable grounds for making it.
A real estate agency was selling apartments with a view of the sea. The agency assured prospective buyers that the view was protected because the land between the apartment block and the sea was zoned for low-rise development. This was based on information provided by a council officer.
However, the council officer was wrong. The zoning was about to change, allowing high-rise development. The agency had made a false statement about a future matter but had reasonable grounds, so was not liable for misleading consumers.
Last updated: 21/05/2013