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Summary of Advertising - exam notes...

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Topic 7: Advertising 7.1.1 Learning outcomes At the completion of these study guides and lectures you will be able to: • • •

identify and describe deceptive business practices such as bait advertising, pyramid selling etc; apply the defences to a practical problem; and identify and apply the laws labelling laws of a product to a practical problem.

Reading Chapter 10 Advertising Chapter 11 Selling techniques Australian Consumer Law 2010; s 29-36 s44-46. 47-50, 224, s236 238-240, 255. 7.1.1 Topics Outline 1. Deceptive advertising - false representations concerning products, consumers’ rights. s18 ACL (topic 6B) is a very broad general section dealing with the advertisement being misleading overall, but there are specific sections dealing with particular conduct that is misleading and deceptive. The aim of S29 is to provide consumers with protection against the worst forms of abuse by advertising. In theory, the law supports truth in advertising, and allows you to make statements that are puffery without out being liable. (Remember from contract puff is a statement no reasonable person would believe is true or that it is a joke). If the advertising makes statements that mislead or make a false representation to the relevant public about: (a) That it meets Australian Standard AS1023 s29(1)(a) (b) That the product is composed of sterling silver (Sterling silver is an alloy of silver containing 92.5% by mass of silver and 7.5% by mass of other metals, usually copper.) s29(1)(a); (c) A car is a 2010 Mazda 3, s29(1)(a); (d) That a Austin Mini was previously used or owned by Princess Diana, s29(1)(a); (e) s29(1)(b), same issues of quality, value grade of services. (f) That a pair of jeans are new when they are second hand- or uses the words ”as new” for second hand goods s29(1)(c); (g) Testimonials from players or famous people that goods are great- Roger Federer and Rolex, s29(1)(e) (h) Sponsorship by the Olympic Federation or IOC when not sponsored, s29(1)(g); (i) Affiliation that your business is affiliated with Apple computers; s29(1)(h); (j) Representations about price- changing labels adding different prices, bringing in special items for sale that never offered for sale in store before sale; s29(1)(i) (k) Represent that the wristwatch can be repaired in Australia when they need to be returned to Switzerland at the cost of the owner,s29(1)(j); (l) About the origin of the goods eg from China and change label to say Germany, s29(1)(k). (m) About rights of the consumer to return goods s29(1)(m). (n) Multi pricing s 47 and single pricing in certain cases s48.

Can lead to litigation about is it misleading and deceptive to members of the public if it is not true as the representation misleads or causes confusion to the public. 2. Defences under the Australian Consumer Law

a. Exception for information provider (media outlet)- means the media outlets cannot be liable for the content carried in the media. It is an exception not a defence. Media still liable for their own misleading and deceptive advertising and conduct disseminated through the media as part of a contract with a supplier or associate. b. If person acted honestly and reasonably, s226 court can relieve person of liability. c. Special defence publishers s209; -s207 reasonable mistake of fact; 3. Self-regulation of advertising.

a. The ACCC which polices the issues of advertising has released some useful guides on these issues: i. a handbook on Country of Origin and the Australian Consumer law. See http://www.accc.gov.au/publications/country-of-originclaims-the-australian-consumer-law

ii. Advertising and selling Guide 2017 ACCC - see http://www.accc.gov.au/publications/advertising-selling

(b) Australian Association of National Advertisers- AANA- advertiser’s code of ethics has its own codes on communications to Children Code (2008) Environmental claims in advertising (2008) and Food and beverage (2006) 1. Selling Techniques Covers issues such as promising gifts and prizes; bait advertising; door to door selling; referral selling; harassment; pyramid selling; inertia selling etc. 1. OK so long as follow rules to avoid the problem: 1. Gifts and prizes s32 ACL 2. Bait adverting s35 ACL 3. Inertia selling 4. Lay-by 5. Direct selling- unsolicited goods s69 & 70, s 74, S78 & 19 and s 82 2. Not ok: 1. Pyramid selling s45 and s46 ACL – 2. Referral selling s49 ACL 3. Representations about price 1. Multiple pricing S47 2. Single pricing S48 3. Discounting etc see above s18 ACL and s 29(1) (i)....