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Walking the Talk: Are Your Customer Testimonials “Misleading”?

If you are a business owner, you probably recognise the value of testimonial advertising. Testimonials are often displayed on your business website, your print advertising, or your business’s social media websites, like a Facebook wall or Twitter feed via user posts. Your customers respond to positive feedback and endorsement from their peers, and in doing so, influence others’ decision-making and brand loyalty in your favour. However, if you have ever been tempted to “harmlessly” exaggerate your customer feedback (just a little!), or use customer feedback for a product you or a competitor may provide, for a separate product, you may be exposing you and your business to some very real legal risks.
No forgiveness from the ACCC
In an ACCC decision on 9 November 2011, James Wheeler, director of a removalist company, was fined $6,600 for publishing false and misleading customer testimonials on his business website. Mr Wheeler’s website copied consumer reviews of similar services from unrelated websites, and published them on his business website. He admitted to doing so, in an effort to collate consumer reviews in one location where the business could respond to certain consumer complaints. However, he also changed all identifying information related to the reviews, such as usernames, star ratings and the name of the removalist company. Significantly, the ACCC held that Mr Wheeler’s business ‘failed to have in place procedures to ensure the accuracy of the copied testimonials and allowed the website to “go live” in the knowledge that errors existed on the website.’ This applies even when you are not the one making the representation, but have the capability and authority to correct the representation, for example, statements made by your employees or other Facebook users.
How does this affect you and your business?
Since the revised Australian Consumer Laws (ACL) came into effect, any business communication that may be misleading or deceptive, or would be likely to mislead or deceive the public, is expressly prohibited. If your business communicates a promotion, quotation, statement or other representation that is inaccurate or misleading with respect to the quality, price, style, history, sponsorship, benefits, place of origin, or availability of your goods or services, then the conduct is likely to breach the law.
Mr Wheeler has experienced first-hand that the ACCC will not hesitate to enforce these provisions of the ACL, even on small businesses. Consequently, as a rule of good practice, you must ensure that any representations or claims you make in relation to your goods or services, whether on your business website, print or television advertising, Facebook pages or Twitter feeds are accurate and truthful. In other words, you need to walk the talk when it comes to advertising, even in your customer testimonials.