We have previously published material relevant to the assessment of whether inaccuracies in customer reporting constitute misleading or deceptive conduct. As we know, section 1041H of the Corporations Act and section 12DA of the ASIC Act are concerned with misleading or deceptive conduct. Conduct is regarded as misleading or deceptive if a representation communicated would have a sufficient tendency to cause the relevant persons to fall into error (i.e. to form an erroneous belief or state of mind). Whether this is the case is a question of probability, having regard to the surrounding circumstances.
The plot thickens, however, as product issuers grapple with practical examples and strive to understand where the dividing line lies. Case law reflects that, in certain circumstances, there will not be a sufficient tendency for a customer to have been misled into believing that reporting discrepancies convey an implied (or express) representation as to the correct state of the recipient's product account ledger.
This article explores with some granularity the issue of whether transactional reporting, which is based on underlying processing errors, is misleading or deceptive.
In Part 1, we start with our analysis, including some recent case law. In Part 2, we conclude with a set of Guiding Principles.
Read our detailed insights here.
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.
