Misleading Advertising during COVID-19 – what business owners need to know
It is important that all businesses remember their obligations when promoting or advertising goods and services during the current COVID-19 pandemic. Read on to find out the factors you should consider generally and additional considerations when promoting a therapeutic good.
Under the Australian Consumer Law, businesses must not engage in misleading or deceptive conduct or conduct that is likely to mislead or deceive consumers or other businesses. This prohibition applies regardless of whether a business intended to mislead or not and regardless of whether anyone has suffered loss or damage.
Businesses must also ensure that they do not make false or misleading claims. Such claims could include claims around the performance characteristics, benefits or use of products and services.
A lot of businesses are using the COVID-19 pandemic to explain stock shortages, delays in deliveries or price increases. If you intend to rely on the COVID-19 pandemic in anyway, then you must ensure that the representations you are making are accurate. You must also ensure that all product claims are correct.
What is Bait Advertising?
Bait advertising is the practice of offering goods and services at a discounted price. It becomes illegal when the goods or services, are not available in reasonable quantities for a reasonable period.
Many businesses are turning to discounted offerings to attract consumers during this difficult time.
If you do intend to discount a product or service and there are limited quantities or the discount is for a limited period of time, then this must clearly be specified in any advertising or you must offer a rain check to the consumer.
Care should also be taken to ensure that you don’t advertise products that are temporarily unavailable.
The Therapeutic Goods Administration (TGA) is aware that there are a number of products being advertised in connection with COVID-19.
Claims that a product may prevent the spread of coronavirus would be considered a therapeutic use claim and such product would most likely be a therapeutic good. Advertising for therapeutic goods needs to comply with the Therapeutic Goods Act 1989 and associated Code in addition to the Australian Consumer Law.
In response to the COVID-19 pandemic, the TGA has indicated that advertisers need to be aware of the following requirements:
- any representation which refers to the novel coronavirus is a restricted representation and cannot be used without prior approval from the TGA;
- any claim must be supported by appropriate evidence and must not mislead;
- advertising must not be inconsistent with any current public health campaigns; and,
- if promoting a disinfectant with explicit claims about killing the novel coronavirus, you must have studies conducted to demonstrate this and approval from the TGA is needed.
If you have any questions or concerns relating to any of the information in this blog or you require assistance, please do not hesitate to get in touch with a lawyer in Coleman Greig’s Commercial Advice team, who would be more than happy to assist you.