Most businesses are more than aware of the general prohibition
against misleading or deceptive conduct, contained in s.52 of the
Trade Practices Act 1974 (Cth) and the fair trading
legislation of the relevant States and Territories. However, the
ACCC continue to receive complaints and take action against
businesses that still find themselves risking contravention of the
section. A particular danger area in this regard is the use of
powerful marketing words in advertisements, such as the word
Dodo Australia Pty Ltd recently found themselves under scrutiny
from the ACCC regarding its "FREE $29.20 Mobility Cap
Plan", "FREE Fuel" and "Cash Offer" 24
month mobile cap plan offers. The relevant advertisements
represented that consumers would receive a computer, a fuel card or
cash, for free, upon signing up to any of the "free"
Concerned that the advertisements were likely to mislead or
deceive consumers, the ACCC investigated the offers and revealed
that the goods offered were not actually "free". In fact,
consumers could enter into other mobile cap plans with Dodo that
were comparable in value and services to the "free" offer
plans, for up to $30 per month less where the plan did not include
the "free" offer.
As consumers ourselves, we can all recognise the appeal in an
advertisement offering something for free. Therefore, the ACCC are
particularly wary about offers containing such marketing
Dodo has now ceased publishing the advertisements. Once aware of
the ACCC's concerns, Dodo commenced corrective action which
included refunding customers and reducing the monthly fees on the
"free" offer plans, to ensure that customers who had
entered into the "free" offer plans would actually
receive the items for free. Dodo has also provided a court
Ultimately, businesses must consider what overall impression an
advertisement or offer conveys in the mind of the customer. It is
important that any product offered for "free" is actually
free, and that the cost of the goods is not otherwise recouped.
Businesses should consult their lawyer if they have any concerns
as to the legality of their advertisements.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Sportscraft refunds and returns policy limitations went beyond consumer's rights under the Australian Consumer Law.
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