Line 5 of 5 · ACCC and the Australian Consumer Law
Checking a claim a coach makes about results
Under the Australian Consumer Law, a claim about the future, such as the results a program will bring, is taken to be misleading if the person making it had no reasonable grounds for it, and the ACCC says the business is responsible for showing it had those grounds. It makes no difference whether anyone meant to mislead.
General information about the Australian Consumer Law, not legal advice. The official place to check is the ACCC, linked at the foot of this page.
Generally not misleading
ACCC: puffery
- Wildly exaggerated, vague claims that no one could take seriously, like a restaurant’s “best steaks on earth”
Can break the law
ACCC and the Australian Consumer Law
- A prediction made without reasonable grounds at the time it is made
- Fine print that conflicts with the overall message
- Leaving out details the buyer should know that are relevant to the decision
From the ACCC’s page on false or misleading claims, summarised.
The rule for predictions
The Australian Consumer Law sits in Schedule 2 to the Competition and Consumer Act 2010. Its starting point is section 18: “A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” Section 4 then deals with promises about the future:
“(1) If:
Australian Consumer Law, section 4(1)
(a) a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and
(b) the person does not have reasonable grounds for making the representation;
the representation is taken, for the purposes of this Schedule, to be misleading.”
In a court case, section 4(2) adds that the person is taken not to have had reasonable grounds unless evidence is brought to the contrary. The ACCC asks businesses to “adequately address the range of uncertainties and variables” in claims about the future.
The law protects businesses as well as consumers, which matters when the buyer of coaching is a business. The ACCC’s guide says: “It is illegal for a business to engage in conduct that misleads or deceives or is likely to mislead or deceive consumers or other businesses. This law applies even if you did not intend to mislead or deceive anyone or no one has suffered any loss or damage as a result of your conduct.”
Testimonials and a coach’s own track record
Section 29 says a person must not, in trade or commerce, in connection with supplying or promoting goods or services, “make a false or misleading representation that purports to be a testimonial by any person relating to goods or services”, and it also bars a false or misleading representation about a testimonial. For those two kinds of representation, section 29(2) works like section 4: the representation is taken to be misleading unless evidence is brought to the contrary. Claims a coach makes about their own results are claims about their services too, and the ACCC says any information or claim “a business provides about its products or services must be accurate, truthful and based on reasonable grounds.”
Questions to ask of a claim
The ACCC tells businesses to back up claims with facts and evidence, note important limitations or exemptions, check the overall general impression, and be prepared to prove what they say; and not to make promises they can’t keep, or predictions without solid evidence. Turned around, that list gives a buyer of coaching some plain questions:
- What is the evidence behind this result, and could it be shown to me?
- What limits or exceptions apply, and are they as visible as the headline?
- Does the fine print say the same thing as the promise?
If a business that bought coaching believes it has been misled, the ACCC’s page for businesses says its first step is to contact the other business to explain the problem, and that there are more steps if that doesn’t resolve it.