Kylie Minogue And the Four-Letter Word

Is this a misleading headline? Well no, not really. As Kylie our beloved singing budgie sang, “This is the feeling I want for always. Free, so free. It’s special, the feeling, it`s really nice…”

‘Free’ is simple little four-letter word - but it can get agencies and your clients into trouble with the Trade Practices Act, meaning the use of this word is a frequently asked question by members.

In the past the ACCC has taken action involving the use of the word ‘free’.  Try this simple test…is the product or service really free or is there a hidden condition? If in doubt check with us. The AFA operate a Free Advice Service (not really ‘free’ because you pay for it through membership).

The idea of getting goods or services without charge is a powerful consumer trigger. Consumers will usually think ‘free’ means absolutely free. When the costs of a free offer are recouped by means of price rises elsewhere, it’s not truly free. For example a business that makes a ‘buy one get one free’ offer, but raises the price of the first item to cover the cost of the second (free) item.
Whilst use of the word ‘free’ in marketing and advertising is lawful, the law doesn’t allow a business to make a free offer and at the same time finance it from the pockets of consumers. To do so is to mislead consumers, who may not expect (unless they are explicitly told) that ‘free’ does not really mean free.

The word ‘free’ is also popular in the marketing of products to indicate they don’t contain a particular attribute or ingredient. The most obvious example is food and beverages. If the product does in fact contain  - say fat, sugar or salt  - that it claims to be ‘free’ from (even 0.1%) the marketer should consider a claim that more accurately describes the product. Otherwise the claim in advertising and labelling using the word ‘free’ may be found to be misleading or deceptive. The word ‘free’ is absolute.

In summary, Section 52 of the Trade Practices Act provides that a Corporation shall not engage in conduct that is misleading or deceptive or likely to mislead or deceive. This section has successfully been used by the ACCC to prosecute traders misusing the word ‘free’.

We thank our good friends at Stephen von Muenster, Solicitors and Attorneys for their assistance in compiling this article.  Watch for the next newsletter when we examine the three-letter word: ‘New.’

Advice provided by von Muenster Solicitors & Attorneys