What are my options if a company makes misleading claims about their product?

In Plain English

If a company makes false or misleading statements about its products, you have several options.

1. For Goods:

   • If you bought goods based on a false description, or that aren't of acceptable quality, you may be able to claim compensation from the manufacturer (Trade Practices Amendment Act 1978).
   • You can also take action against the manufacturer for damages if goods don't meet the guarantees under the Competition and Consumer Act 2010, especially if the description was applied by or with the manufacturer's consent.
   • If the goods have a false trade description when imported, penalties may apply under the Commerce (Trade Descriptions) Act 1905.

2. For Financial Products and Services:

   • If the misleading claims relate to financial products or services, you can take action under the Corporations Act 2001. This Act prohibits misleading or deceptive conduct in relation to financial products or services.

3. General False or Misleading Representations:

   • The Competition and Consumer Act 2010 also makes it an offence to make false or misleading representations about goods or services in general.

Detailed Explanation

Your options depend on the nature of the product or service and the specific misleading claim. Here's a breakdown based on the legislation:

1. Goods under the Trade Practices Amendment Act 1978:

   • Unsuitable Goods (Section 74B): If a corporation supplies goods that aren't reasonably fit for a purpose you made known to them, and you suffer loss as a result, you can claim compensation. This doesn't apply if the issue arose due to someone else's actions or a cause outside human control after the goods left the corporation, or if you didn't rely on the corporation's skill/judgment.
   • False Descriptions (Section 74C): If goods supplied by a corporation don't match their description, and you suffer loss, you can claim compensation. This doesn't apply if the mismatch was due to someone else's actions or a cause outside human control after the goods left the corporation. The corporation is only liable if the description was applied by them or with their consent.
   • Unmerchantable Quality (Section 74D): If goods aren't of merchantable quality, and you suffer loss, you can claim compensation. This doesn't apply if the issue arose due to someone else's actions or a cause outside human control after the goods left the corporation, or if defects were pointed out before the sale, or if you examined the goods and should have noticed the defects.
   • Failure to Comply with Express Warranty (Section 74F): If a corporation fails to meet an express warranty, you can claim compensation for resulting loss or damage.
   • Time Limit (Section 74J): You generally have 3 years to commence an action after you became aware, or should have become aware, of the issue.

2. Goods under the Competition and Consumer Act 2010:

   • Guarantees Not Complied With (Section 271): If a manufacturer applied the description to goods, or gave express or implied consent to it, and the goods don't meet the guarantee under section 56, you can recover damages from the manufacturer. This doesn't apply if the guarantee wasn't met due to someone else's actions or a cause outside human control after the goods left the manufacturer.
   • Damages Recoverable (Section 272): Damages can include the reduction in value of the goods and any reasonably foreseeable loss or damage.
   • Time Limit (Section 273): You have 3 years to commence an action after you became aware, or should have become aware, that the guarantee wasn't complied with.
   • False or Misleading Representations (Section 151): This section makes it an offence to make false or misleading representations about goods or services.

3. Imported Goods under the Commerce (Trade Descriptions) Act 1905:

   • False Trade Descriptions (Sections 9, 9A, 10): It's illegal to import goods with a false trade description. Goods found with a false trade description are deemed to have been imported illegally. Such goods may be forfeited to the Crown.

4. Financial Products and Services under the Corporations Act 2001:

   • Misleading or Deceptive Conduct (Section 1041H): A person must not engage in conduct in relation to a financial product or service that is misleading or deceptive or is likely to mislead or deceive.
   • False or Misleading Statements (Section 1041E): It is an offence to make statements or disseminate information that is false in a material particular or is materially misleading, and is likely to induce persons to apply for, dispose of, or acquire financial products, or to have an effect on the price for trading in financial products.
   • Inducing Persons to Deal (Section 1041F): A person must not induce another person to deal in financial products by making or publishing a statement, promise or forecast if the person knows, or is reckless as to whether, the statement is misleading, false or deceptive; or by a dishonest concealment of material facts.
   • Dishonest Conduct (Section 1041G): A person must not, in the course of carrying on a financial services business, engage in dishonest conduct in relation to a financial product or financial service.