What you need to know about misleading business practices

Jan Vykydal

It’s always hard hearing about small businesses that have been scammed or mislead, but it’s doubly hard when those businesses were just trying to improve workplace safety for their employees and customers.

After all, who doesn’t want to make their workplace safer?

The Federal Court ruled last month that Safety Compliance Pty Ltd pay $515,000 in penalties for making false and misleading claims to small businesses about wall safety charts and first aid kits, says The Australian Competition and Consumer Commission (ACCC).

Justice Farrell said the company’s businesses model was “a systematic and deliberate scam targeted at potentially large numbers of people in small businesses across Australia.”

The company was found to be in violation of the Competition and Consumer Act 2010 – a handy piece of law for business owners to be aware of – for saying it was a state workplace health and safety agency, and for telling people that businesses needed to have the safety wall charts sold by Safety Compliance.

The government has a series of easy-to-follow guidelines that both tell you what you are and are not allowed to say about your business or products, and what to do if you think someone is trying to mislead you. Here’s a quick rundown.

Impressions count

You can’t say things that create a false overall impression. This is important because it means that not only can’t you tell big fat lies about the quality, price, etc. of your products, you’re also not allowed to say things that would give someone the wrong impression (this includes false testimonials).

The fine print

You can’t use “the fine print” as an excuse. Make yourself clear to your customers.

Don’t bait customers by advertising a really good product that you don’t have in stock.

Advertising claims

Interestingly, it’s totally fine to say your company offers the best or cheapest products as long as those statements are accurate. You can also say your product has some kind of added benefit when compared to similar products, again, provided that claim is true. These claims would include products being fat-free, free-range, non-toxic, “green”, recyclable, and so on.

But don’t make misleading claims about a product’s country of origin. And don’t bait customers by advertising a really good product that you don’t have in stock.

Wildly exaggerated claims

Here’s the fun thing: If a claim is so crazy that nobody in their right mind would take it seriously, you can use it. If you want to say your new paperclip design is the greatest thing humans have created since primitive man first combined peanut butter with chocolate, that’s fine.

Your homework

If you’d like to know more, Avoiding unfair business practices is a handy guide that tells you exactly what you should and shouldn’t do.

If you think you’re being misled

Don’t run straight to the authorities if you think you’re being misled, says the ACCC. Maybe someone just made a mistake.

First, give the business or company you think is misleading you a chance to respond. If you’re pretty sure you’re being swindled, put your complaint in writing, so you have a record of it.

The second step would be to contact either the ACCC or a third party (which one to contact will depend on the circumstances).

The third step is to take legal action. Consult someone beforehand, though. A legal aid office or a lawyer would be a good place to start. You might also be able to take your case to a small claims court or tribunal.

To contact the ACCC, click here.

Jan Vykydal

Jan is a Sydney-based writer and editor whose work has been published in a stable of titles including the National Post, The Daily Planet and Edmonton Examiner. He is currently Editor at ShortPress.

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