Healthy Skepticism Library item: 1750

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Publication type: news

O'Malley N.
Ad agencies liable if they mislead
Sydney Morning Herald 2002 Apr 12

Full text:

Advertising agencies have been put on notice: create misleading advertisements for your clients, wittingly or otherwise, and expect to join them in court.

Addressing a conference of the Advertising Federation of Australia (AFA) yesterday, the chairman of the Australian Consumer and Competition Commission, Allan Fels, said some elements in the industry believed accuracy and truth in advertising was the responsibility of the client alone.

He warned that the commission would take a dim view of such a defence in any dealings it had with agencies.

“The arguments about what people perceive to be their responsibilities do not carry much weight,” he said.

“Advertising agencies that knowingly participate in false or misleading campaigns put themselves at risk.

“The commission does not necessarily expect agencies to independently check the technical claims made about a product, but if they are complicit in an obviously misleading presentation, and fine print is used to obscure an offer’s restrictions, then difficulties start to arise.”

Professor Fels said there was already a precedent in regard to the liabilities of advertising agents, citing a fine issued last year to Nissan and its advertising agent, and the case of a mobile phone ad offering a “free” phone contingent on customers signing a $2000-plus contract.

Professor Fels told the Herald his address was a warning to the industry. “Over the past few years there has been an increase in the amount of qualifications not being disclosed in [advertising] fine print, or if there has been disclosure it has been in such minuscule fine print that it is illegible.

“There has to be eternal vigilance, because the temptation to go for those spectacular claims is so strong,” he said.

But Professor Fels applauded the industry for the work it had done to boost standards of truth and fairness across the board.

He said the Australian advertising industry was the first in the world to adopt a voluntary code of ethics, through the AFA.

The AFA’s chairman, Matthew Melhuish, said he did not disagree with the points raised by Professor Fels.

“Their position is very clear, and when you hear it explained, it’s very logical,” Mr Melhuish said.

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