False advertising in Australia and the rules your business must follow

Is false advertising illegal in Australia? Yes. If your business advertises, sells or promotes anything to Australian customers, the law requires that your marketing be truthful: you must not engage in conduct that is misleading or deceptive, and you must not make false or misleading representations about what you sell. Those duties sit in the Australian Consumer Law (the ACL), which is Schedule 2 of the Competition and Consumer Act 2010 (Cth).

What catches most businesses out is that these rules are broader than banning outright lies. The law judges the overall impression your advertising creates, it reaches into how you display prices and discounts, and it applies even when you never intended to mislead anyone. This guide sets out who the rules apply to, the specific duties your advertising must meet, what happens if you breach them, and a practical checklist for keeping your campaigns compliant.

Who must comply and what triggers the rules

The core prohibitions apply to any person acting in trade or commerce. There is no turnover threshold, no minimum headcount and no exemption for small business. A sole trader running a weekend market stall is bound by the same rules as a national retailer, and the duties extend beyond consumers: the general prohibition in s 18 of the ACL protects other businesses as well.

The rules are triggered by conduct in connection with the supply, possible supply or promotion of goods or services. That covers a wide field: a television or social media advertisement, a website, an email campaign, a product label, an in-store display, a catalogue, an influencer post and even a one-on-one sales pitch. Conduct includes omissions. Leaving out a key limitation, condition or cost can mislead just as effectively as a false statement, so what your advertising does not say matters as much as what it says.

Intention is irrelevant. The test is whether the conduct is misleading or deceptive, or likely to mislead or deceive, judged by how an ordinary or reasonable member of the audience would understand it. An honest mistake can still breach the law, which is why substantiation and review processes matter more than good intentions.

The general duty: do not mislead or deceive

Section 18 of the ACL provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. It is the foundation of Australian advertising law and applies across every industry and channel.

The assessment is not made word by word. Courts look at the overall impression the advertisement conveys, including its prominent claims, images and tone. In Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54, the High Court considered broadband advertisements that promoted an "unlimited" plan in large type while key conditions, including the fact that the price was only available with bundled telephone services, appeared in fine print. The Court held that the advertisement had to be judged by its overall effect on the ordinary consumer, and that the qualifications buried in small print did not prevent the dominant message from misleading.

The practical consequence is that fine print cannot cure a misleading headline. If the main message of an advertisement only becomes accurate once the reader finds a condition in the terms and conditions, the advertisement is still at risk. Qualifications need to be prominent, in plain English and placed near the claim they qualify.

Specific prohibitions: false or misleading representations

Alongside the general duty, s 29 of the ACL prohibits a long list of specific false or misleading representations made in connection with the supply or promotion of goods or services. The list covers the goods themselves: their standard, quality, value, grade, composition, style or model, their history or previous use, and whether they are new. It extends to services of a particular standard, quality, value or grade, and to testimonials: it is unlawful to make a representation that purports to be a testimonial, or to misuse a genuine testimonial, in a way that is false or misleading. Representations about sponsorship or approval are also covered.

Two things matter here. First, the list is exhaustive in form but broad in effect, so almost any factual claim about a product or service can fall within it if it is false or misleading. Second, unlike s 18, s 29 is a pecuniary penalty provision, which means non-compliance can attract the substantial penalties set out below.

The testimonial rules are the legal hook for reviews and influencer content. Fabricating reviews, posting testimonials that do not reflect genuine customer experience, or presenting paid endorsements as independent opinion can breach s 29. If you incentivise reviews or give influencers free products, the connection needs to be disclosed and the content needs to reflect what customers actually experienced.

Pricing duties: single prices, discounts and fees

Pricing is where businesses most often trip over the ACL. Under s 48, if you advertise any component of the price of goods or services of a kind ordinarily acquired for personal, domestic or household use, you must also specify, in a prominent way and as a single figure, the single price for the goods or services. The single price is the total the customer must pay to acquire the item, so it includes mandatory, quantifiable charges such as GST. If a charge is unavoidable, build it into the price you display rather than adding it at checkout.

Delivery charges for sending goods do not need to be folded into the single price, provided they are disclosed clearly so the shopper can see the true total before committing to the purchase. Optional extras that the customer chooses do not need to be included either, but anything the customer cannot avoid must be.

Two further pricing rules deserve attention. Under s 47, if goods carry more than one displayed price, you must sell them at the lower or lowest of the displayed prices. And the accuracy of discount claims is judged against reality: a "was" price must be a genuine price the business actually charged for a reasonable period, not an inflated figure invented to make a sale look bigger. An "up to 60% off" promotion needs the actual range of items to reflect that headline; if only a handful of products reach the maximum discount, the promotion is likely to mislead. The same logic applies to "limited time" offers and "only one left" notices, which must be accurate and must not be kept running indefinitely.

Watch this area closely over the next year. The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (Cth) passed Parliament in July 2026 and introduces new consumer protections, including disclosure obligations for transaction-based charges aimed at drip pricing, which take effect from 1 July 2027. Businesses that charge mandatory fees on top of a displayed base price should start reviewing their checkout flows now.

Substantiate what you claim

Advertising claims that assert a fact about performance, quality, health, environmental benefit or a scientific basis need evidence to back them up. The ACCC has a direct tool to test this: under ss 219 to 222 of the ACL, it can issue a substantiation notice requiring a business to produce documents that support a claim it has made. Failing to comply with a substantiation notice is itself a contravention attracting penalties, so an unsubstantiated claim can create two problems at once.

Environmental claims have been a particular focus. In December 2023 the ACCC published its guide, Making environmental claims, setting out eight principles for businesses making green claims. Terms like "eco-friendly", "carbon neutral" and "biodegradable" need clear, accurate context and credible evidence. Vague language without specifics is exactly the kind of claim regulators scrutinise: an ACCC internet sweep of environmental claims found that 57 per cent of businesses reviewed made claims that were potentially misleading.

The practical habit is to hold a substantiation file for every campaign: test results, product specifications, supplier certifications and the basis for any comparative or superlative claim. If the evidence is context-specific or uncertain, reword the claim or add a prominent qualification.

Proof of transaction records

There is a small but easily missed record-keeping duty. Under s 100 of the ACL, if you supply goods or services to a consumer and the total price is $75 or more, excluding GST, you must give the consumer a proof of transaction as soon as practicable after the supply. If the total is less than $75, you must provide a proof of transaction within 7 days if the consumer requests one. A proof of transaction must identify the supplier and its ABN or ACN, state the date of supply, describe the goods or services supplied and state the price. Breaching s 100 attracts penalties of up to $15,000 for a company and $3,000 for an individual.

These records matter beyond the letter of the rule. They are the evidence trail for consumer guarantee claims and for substantiating any advertising claim about what was sold, at what price and on what terms.

What happens if you get it wrong

The consequences differ depending on which provision is breached.

Section 18 does not carry pecuniary penalties by itself. Instead, a court can make orders including injunctions to stop the conduct, damages or compensation for loss suffered, and non-punitive orders such as corrective advertising. A corrective advertising order can be expensive and embarrassing: it usually requires the business to publish a notice telling consumers the earlier advertising was misleading.

Breaches of the specific provisions in Part 3-1 of the ACL, including s 29, can attract pecuniary penalties under s 224. For a body corporate, the maximum penalty for each contravention is the greater of $100 million, three times the value of the benefit obtained from the conduct, or, where the benefit cannot be determined, 30 per cent of the company's adjusted turnover during the breach period. For individuals, the maximum is $2.5 million per contravention. A single campaign can involve many separate contraventions, and each act or omission is penalised separately, so the headline figures are not theoretical.

Enforcement sits primarily with the Australian Competition and Consumer Commission (ACCC) and the state and territory fair trading agencies. The ACCC can investigate complaints, issue substantiation notices, accept court-enforceable undertakings, issue infringement notices for certain contraventions and commence court proceedings for penalties, injunctions and corrective orders. Its enforcement priorities in recent years have included pricing conduct, environmental claims and conduct affecting vulnerable consumers, and penalties awarded by the courts have run into the tens of millions of dollars.

A compliance checklist for your next campaign

Run each new campaign through these checks before it goes live:

• Headline test: Read each advertisement as a customer would, looking only at the headline and primary message. If that message misleads without the fine print, rework it.
• Substantiation file: Keep evidence for every factual, comparative, health or environmental claim, and hold it for as long as the claim runs.
• Pricing display: Show a single total price including mandatory charges, sell at the lowest displayed price, and make "was", "up to" and "limited time" claims accurate.
• Reviews and endorsements: Use genuine testimonials that reflect typical experience, disclose paid or incentivised relationships, and train staff on how reviews are requested, displayed and moderated.
• Disclaimers: Place qualifications near the claim they qualify, in plain language. They clarify; they do not rescue a misleading headline.
• Sign-off process: Have a named person approve each campaign and website change before it goes live, with authority to escalate to a lawyer.
• Correction protocol: If a problem surfaces, correct it everywhere it appears and consider contacting affected customers, because regulators weigh prompt, cooperative correction favourably.

When a lawyer should be involved

You do not need a lawyer to run a compliant campaign, but there are moments where one pays for itself. If the ACCC or a state agency issues a substantiation notice or contacts you about a complaint, respond with professional help rather than improvising. If a campaign makes health, environmental, safety or comparative claims, or targets children or other vulnerable audiences, have the claims and their substantiation reviewed before publication. If a misleading advertisement has already run and reached a wide audience, a lawyer can help you assess consumer impact, plan corrections and engage with the regulator. And with the unfair trading practices reforms taking effect from 1 July 2027, now is the time to audit checkout flows, subscription offers and review practices against the coming rules.

Start with the headline, not the fine print

If your advertising only tells the truth in the terms and conditions, it is already at risk. The High Court's decision in TPG is a reminder that regulators and courts judge the impression your advertisement creates, and a buried qualification does not undo a dominant misleading message. The first action this week is simple: pull up your live campaigns and read only the headline, the imagery and the price. If any of them would mislead a customer who never reads the fine print, rework them before the ACCC does it for you.