This provision is specific to the ACL and allows the ACCC to take action against businesses using a false or misleading testimonial.
Testimonials can give consumers confidence in a product or service on the basis that another person – particularly a celebrity or well-known person – is satisfied with the goods or services.
Misleading representations can persuade customers to buy something to their detriment, based on belief in the testimonial.
Examples of testimonials that have been found to be false and misleading are:
- A company published a newspaper advertisement about a ‘nasal delivery system’ to treat impotence or erectile dysfunction. The advertisement quoted an interview with a celebrity that falsely claimed he had suffered from impotence and the nasal delivery system had assisted in dealing with this condition.
- An advertisement where an actor is portrayed as a real person and falsely claims to have reaped financial benefits from distributing health care products.
In Court, a representation about a testimonial is presumed to be misleading but not false. A business accused of making a misleading testimonial has to provide evidence to show it is not misleading.
The following is a suggested checklist to be used prior to publication:
Is the testimonial genuine?
- Does the person exist?
- Did they use the product or receive the service?
- Does the testimonial truthfully represent the outcomes?
- Was any form of inducement provided in exchange for the testimonial?
Has permission been granted to use it?
Is the testimonial typical?
If the testimonial is published over a prolonged period of time then the advertiser has an ongoing obligation to ensure the currency of the testimonials.