False claims about products and services

It is unlawful to make false or misleading claims or representations about goods and services.

For instance, a business must not make false or misleading representations about:

  • the standard, quality, value or grade of goods or services
  • the composition, style, model or previous history of goods
  • whether the goods are new
  • a particular person agreeing to acquire goods or services
  • testimonials by any person relating to goods or services
  • the sponsorship, approval, performance characteristics, accessories, benefits and uses of goods or services
  • the price of goods or services
  • the availability of repair facilities or spare parts
  • the place of origin of a product (where it was made) {link to Country of Origin page}
  • a buyer's need for the goods or services
  • any guarantee, warranty or condition on the goods or services {link to refunds, repairs & returns page}

Whether a representation is considered false or misleading will depend on the circumstances of each case, and what misleads one group of consumers may not necessarily mislead others.

A representation can be misleading even if it is partly true.

Testimonials

Testimonials - also known as reviews - are statements from customers about their experience with a product or service. Businesses often use them as promotional marketing tools.

It is unlawful to make, rely on or use false or misleading testimonials.

Tips for businesses

  • Make sure any testimonials used are true and correct
  • Don’t post or publish misleading reviews
  • Omitting negative reviews can be as misleading as posting false positive reviews
  • Be transparent about commercial relationships with anyone providing a testimonial
  • Keep records of all customer reviews and testimonials. Courts may consider testimonials to be misleading unless you can prove otherwise.

Gifts, rebates and prizes

Businesses who offer gifts, rebates or prizes must actually provide them and they must match their advertised description.

They must be provided within the specified time or, if no time is specified, within a reasonable time.

False competitions are illegal.

Bait advertising

Businesses need to keep a reasonable supply of any sale items they advertise.

If a product is sold out, a business can’t talk consumers into buying something similar that’s a higher price or lower quality.

Wrongfully accepting payment

A business must never accept your payment if they:

  • don't intend to supply the advertised goods or services
  • know they can’t offer the goods or services in a reasonable time.

Cash back offers

Cash back offers are a type of discount where instead of marking down product prices, retailers keep the same price but offer to return money after buying. These offers are limited in time and have special application conditions consumers have to meet to get the money.

It’s against the law for businesses to offer rebates, gifts or prizes without intending to provide them, or not providing them as offered.

If you decide to buy a product and apply for the cash back offer:

  • check the expiry date, waiting times to receive the offer, evidence required and all steps you need to take to get the cash
  • complete the application carefully to meet all conditions
  • keep copies of all documents as proof in case something goes wrong
  • shop around and compare prices before committing to a cash back deal.

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