Most small business owners struggle with marketing their business. They sweat blood to finally get their offer out to the public without realising that they may be breaking a raft of laws.

A common discussion we have with new clients is around their legal compliance for their marketing. They often don’t know what they don’t know, so have slipped over to the dark side without realising.

It starts with simple things – lifting a paragraph here or there from their competitors, or copying an image from an online search without permission or attribution. They often then go even darker through misleading taglines and shonky product or service benefit claims.

Breaking the law with your marketing is surprisingly easy to do, and can be extremely costly in terms of damage to your reputation and penalty costs. Here are just a few of the cases in the past few months that have made the news:

 

Legal Essentials

If you don’t want to become a statistic, here’s a quick primer on some of the major bits of legislation and legislative bodies that every small business needs to know about before they hit “go” on their next bit of marketing. (Remember, we are not a law firm, and this is general and not legal advice. If you have a legal question, you need to contact a qualified legal practitioner experienced in consumer law).

Advertising & Promoting Your Business – ACCC & TGA

The ACCC (Australian Consumer and Competition Commission) ensures businesses comply with fair trading and consumer protection laws including the Competition and Consumer Act.

The TGA (Therapeutic Goods Administration) regulates all therapeutic goods in Australia, including the regulation of advertising.

False Or Misleading Statements

False or misleading statements are some of the most common problem areas for business in their marketing across any media or product packaging.

You cannot make false and misleading claims which can include lying, leading people to a wrong conclusion, creating a false impression, leaving out important information, making false or inaccurate claims about quality, value, price, age or benefits of goods or services.

It doesn’t matter if you didn’t intend to mislead – the result is what counts.

The things that are considered by the ACCC when looking at if something is misleading include overall impression, potential audience and intent.  This is a quite tricky area as it includes considering what the most susceptible members of the audience may react to the marketing as well considering the wider potential audience beyond your target audience.

You can’t argue that your client base is educated, and they know what you mean. If there is even a hint that someone may be more susceptible than your regular client base or that your promotion can be seen by other people, you must be doubly careful.

 Things to take into consideration:

  • You must have reasonable grounds when predicting a future event or result (and be able to prove it!)
  • You must not mislead or deceive.
  • You must not misrepresent the goods or services such as price, place of origin etc.
  • You must not mislead people about the characteristics, suitability or quantity of services.
  • You must not force people to buy a product or service from a different business before they can buy from you (this can be a problem if you do a Joint Venture with someone else).
  • You must not use false testimonials.

Comparative Ads

If you are going to compare your product to someone else’s product – beware. The sort of thing the ACCC looks at is the accuracy of the comparison, whether the products are reasonably similar and if the comparison has remained valid for the term of the promotion.

If, for example, you are comparing on price and your competitor drops their price during your campaign you are suddenly engaged in “misleading conduct”.

Comparative ads are fraught with danger for most small businesses and are generally not worth pursuing in your marketing without strong legal advice from a lawyer versed in Trade Practices law.

Bait Advertising

Another area fraught with danger for small business is bait advertising, where you advertise items at an extremely low cost on stock that is not available, or only available in very limited quantities without disclosing the limit.

This is not only legally wrong, even if you disclose your limits you can set yourself up for disgruntled potential customers who miss out on the deal.

Other Marketing Claims Areas to Be Aware Of

Many other areas fall under the ACCC and TGA including country of origin claims, green or environmental claims, therapeutic claims, moral or social benefits of a product or service, quality claims and safety.

If your marketing or product refers to any of these attributes, then you need to comply with all the ACCC and TGA requirements.

What About Just Using Fine Print?

Some businesses try and get around potential problems by writing in disclaimers, limitations or conditions. The bad news is the fine print may not be enough to save you from breaching the legislation.

The stronger your claims, the less likely the fine print will save you, particularly if the fine print is too small or in an obscure place. If you use a disclaimer, put it on a major page, so your disclaimer is clear and prominent to reduce the risks to your business.

Some businesses try and get around potential problems by writing in disclaimers, limitations or conditions. The bad news is the fine print may not be enough to save you from breaching the legislation.

The stronger your claims, the less likely the fine print will save you, particularly if the fine print is too small or in an obscure place. If you use a disclaimer, put it on a major page, so your disclaimer is clear and prominent to reduce the risks to your business.

Pricing & Surcharging

Setting your prices, displaying your prices, and adding in surcharges for card transactions all are governed by the ACCC.

Specific danger areas to watch out for here are you cannot set your prices in collusion with other businesses (price fixing). You also can’t charge excessive card surcharges, and you need to be cautious when using comparative pricing (e.g. This item was $x and now is just $y) that the items were sold at the specified higher rate immediately before the sale commenced.

Signs

The signs you place outside your business, or via A-frames on your footpath are regulated by your local or state government. In many cases, you need a permit as well as public liability insurance before you erect your sign.

Remember to also check with your Body Corporate before hanging up your sign as they also have rules around size and location.

Posting Signs on Poles etc

Want to promote your new service? What about simply sticking signs up on telegraph poles, fences or road signs? It is illegal to post signs on public property (including signs and poles). In other areas where bill posting is legal, you may need a permit before you pull out your glue, staple gun or sticky tape.

Competitions – ACCC and State Consumer and Gambling Regulatory Bodies

A simple lucky door prize or a Facebook competition. What could go wrong? Unfortunately, competitions, lotteries, and promotions are highly regulated, and you may need a permit before you start, or the need to comply with rules around your competition.

Each state has different requirements, so you need to check with your local agencies before running any competition.

For Example – QLD Rules around Competitions & raffles (Most business competitions fall under Category 4). The inspectors in QLD are quite active, with most trade exhibitions at the Exhibition Centre and the Ekka inspected to ensure compliance with the regulations.

Spam

Emailing material to your clients or people whose names you have scraped off a website or bought on a list, are covered by The Spam Act. Penalties quickly add up, with the current maximum penalty of $1.8million for breaching the Act as well as the seizure of property.

Read more about the Spam Act.

Telemarketing

If you cold call people to promote your business, you need to comply with the Do Not Call Register Act. If you contact a person who is listed on the Do Not Call Register you could face hefty penalties.

You also need to comply with the Telecommunications (Telemarketing and Research Calls) Industry Standard 2017, which governs when calls can be made, what you can say, when a call must be terminated and when you need to use caller ID.

Handing Out Brochures

Thinking of handing out brochures or flyers to passing people? You are probably going to need a permit for that from your local or state government.

You may also be caught under Environmental Protection Legislation if you attempt to put things under windscreen wipers on cars. In some states it is illegal to place things on cars, in others you may be charged with littering offences if they blow away.

Spruiking

Ever thought about hiring a microphone and a speaker and spruiking your services to passers-by? This is another area where you may need a permit, as well as complying with the local council and body corporate rules before you even get your first word out.

Copyright & Intellectual Property

Photos, images, words and music are all covered under copyright. If you want to use someone else’s images, words, photos, or music, you need to comply with all Intellectual Property requirements.

This means you can’t simply copy the words from someone else’s website that you like, copy an image from a Google search, use some music that you like or take a clip from your favourite film without permission and possibly payment of a fee.

To find out more about the rules around Copyright in Australia, visit the Australian Copyright Council.

Where to Start?

There’s so much regulation around marketing and advertising in Australia, it’s hard to know where to start.

If you do nothing else, read the ACCC website thoroughly.

If your product or service covers health or therapies (including alternative therapies and cosmetic injections), then you need to read the TGA Advertising guidelines.

To find out if you need a permit for something you are planning on doing, this handy whole of government licencing site is a great place to start.

Marketing in business is just like all other parts of your business – governed by rules and regulations. It is your responsibility to be across and comply with all the legal requirements that impact on your business.

Ingrid Moyle

Ingrid Moyle is the Chief Web Wizard at Heart Harmony Communications. A self-confessed multipotentialite, Ingrid shamelessly blends her passions of human resources, psychology, web design and copywriting. When not hardwired to her computer, she quests for the perfect coffee while chasing virtual reality creatures across the backstreets of Brisbane.
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