Misleading Conduct In New Zealand: Compliance Tips For Businesses

If you run a small business, you've probably had this moment: you're writing an ad, updating your website, replying to a customer message, or posting on social media and you think, "Is this wording okay?"

In New Zealand, misleading statements (even accidental ones) can create real legal risk for your business. The good news is that once you know what misleading conduct looks like and where it typically happens, it becomes much easier to spot issues early and fix them.

This guide explains what misleading conduct means in New Zealand, which laws apply, common examples we see in small businesses, and practical steps you can put in place to stay compliant from day one.

What Does "Misleading Conduct" Mean In New Zealand?

In plain terms, misleading conduct is behaviour (including advertising, sales conversations, online listings, or pricing) that can lead someone to form the wrong impression about what they're buying, who they're dealing with, or what they'll receive.

It doesn't have to be an outright lie. A statement can be misleading if it:

• Creates the wrong overall impression (even if individual words are technically true)
• Leaves out important information that changes the meaning (misleading by omission)
• Uses unclear wording that an ordinary customer could reasonably misunderstand
• Relies on fine print to "fix" a bold claim that most people will read first

When people talk about "misleading conduct" in business, they're usually talking about obligations under the Fair Trading Act 1986 (FTA). The FTA applies broadly to anyone "in trade" (which covers most businesses, including online sellers, tradies, retailers, agencies, and service providers).

There's also a close relationship between misleading conduct and other legal concepts such as misrepresentation (which often comes up in contract disputes). If a customer relied on a misleading statement when deciding to buy, you may face refund demands, disputes, reputational damage, and potentially enforcement action.

If you're ever unsure whether something crosses the line, it helps to ask: "What impression would an ordinary customer take away from this?" That "overall impression" is often where the legal risk sits.

Which Laws Apply To Misleading Business Conduct?

For most small businesses, the key laws that sit behind misleading conduct risks are:

The Fair Trading Act 1986

The FTA is the main law that prohibits misleading and deceptive conduct in trade. It covers a wide range of real-world situations, including:

• Advertising and marketing claims (online and offline)
• Pricing, discounts, and "specials"
• Statements made by sales staff or customer service teams
• Packaging, labels, and product descriptions
• Testimonials, reviews, and endorsements
• Business-to-business representations (yes, not just consumers)

It also overlaps with "unfair" conduct more generally. If you're reviewing your marketing and sales practices, it's worth keeping an eye on the broader category of unfair business practices, because the same habits that trigger misleading issues often trigger other compliance issues too.

The Consumer Guarantees Act 1993

Even if your advertising is accurate, you still need to deliver what consumer law expects. Under the Consumer Guarantees Act 1993 (CGA), consumers receive automatic guarantees (for example, that goods are of acceptable quality and fit for purpose, and services are carried out with reasonable care and skill).

This matters for misleading conduct because businesses sometimes use broad statements like "no refunds" or "sold as-is" in a way that gives customers the wrong impression about their rights. In many consumer situations, those statements can be misleading and/or inconsistent with the CGA. In some business-to-business situations, contracting out of parts of the CGA may be possible if strict requirements are met, so it's important your wording matches your legal position and the context you're selling into. For a practical grounding on what consumer promises can and can't look like, see Warranties.

Contract Law (Including Misrepresentation Issues)

Misleading statements can also create contract risk. For example, if you make promises about delivery times, performance, or features, and the customer relies on that promise to sign up, the misleading conduct issue can become a dispute about what the contract actually was.

That's why it's important your customer terms, quotes, and proposals line up with what your marketing says. It can also help to understand when a quote can become enforceable in the first place - quotations are a common source of confusion for small businesses.

Common "Misleading" Traps For Small Businesses (With Practical Examples)

Misleading conduct issues usually don't come from businesses trying to do the wrong thing. They come from fast growth, busy teams, outdated website pages, or "marketing shortcuts" that create the wrong impression.

Here are some common traps we see in practice.

1. Pricing And Discount Claims That Don't Match Reality

Pricing is one of the most common misleading conduct risk areas because customers make quick decisions based on price cues.

Examples that can cause problems:

• Advertising a price that doesn't include unavoidable fees (for example, mandatory service fees)
• Promoting "from $X" pricing when almost no customers can actually obtain that price
• Showing a discount against a "was" price that wasn't genuinely offered for a reasonable time
• Displaying different prices online vs in-store without making the conditions clear

For a deeper look at how advertised prices can create compliance issues, advertised price rules are a good benchmark.

2. Overstated Results Or Performance Claims

Results-based marketing can be a powerful sales tool, but it's also where misleading conduct risk spikes - especially when claims are absolute.

Higher-risk wording includes:

• "Guaranteed results"
• "100% effective"
• "Works for everyone"
• "Instant approval" (when approval is actually conditional)
• "Unlimited" (when there are fair use limits or caps)

A safer approach is to use accurate, qualified statements you can back up, like "most customers see?" or "typically?" - but only if you genuinely have evidence for that claim.

3. Before-And-After Photos, Testimonials, And Reviews

Social proof is a big part of small business marketing, but it needs to be handled carefully.

Potential issues include:

• Using edited before-and-after images without clarifying they are edited
• Using a "best case" transformation as if it's typical
• Publishing testimonials that make claims you can't substantiate
• Reposting a customer's claim about a product/service that turns out to be inaccurate

One practical tip: treat testimonials like advertising copy. If a reasonable customer would rely on it, you should be comfortable it's fair, accurate, and not creating an overall misleading impression.

4. "Fine Print" Disclaimers That Don't Actually Fix The Headline Claim

Disclaimers can be useful, but they're not a magic shield. If your main message is misleading, adding a small disclaimer at the bottom often won't cure it (and can sometimes make things worse if it suggests you knew the claim was risky).

That doesn't mean you should never use disclaimers - it means you should use them properly, in a way that supports clarity rather than contradicting the headline. If your business uses disclaimers in ads, websites, or service descriptions, it's worth having a clear, tailored Disclaimer strategy rather than copying generic wording from somewhere else.

5. Claims About Availability, Timeframes, Or Urgency

Small businesses often use urgency marketing ("limited spots", "closing tonight", "last chance") - and this can be fine if it's true.

Risky situations include:

• Advertising limited stock when stock isn't actually limited
• Running "ending soon" sales that continue indefinitely
• Promising delivery timeframes you can't reliably meet (especially around peak periods)
• Stating you can start work immediately when there's a waiting list

Customers don't just rely on what you say - they rely on what your statements imply.

How To Stay Compliant: A Practical Checklist For Your Marketing, Sales, And Website

Compliance doesn't have to slow your business down. A simple internal process can reduce the chance of misleading conduct and help you respond quickly if a customer raises a concern.

Here's a practical "misleading risk" checklist you can adapt to your business.

1. Make Sure You Can Prove Your Claims

Before publishing a claim, ask yourself: "What evidence would I show if someone challenged this?"

This matters for:

• Performance claims (speed, durability, effectiveness)
• Comparisons ("best", "cheapest", ?#1?)
• Credentials ("licensed", "certified", "approved")
• "Made in New Zealand" or origin claims
• Environmental claims ("eco-friendly", "carbon neutral") - be careful with broad statements

If you can't support it, reword it, qualify it, or remove it.

2. Align Your Marketing With Your Terms, Quotes, And Contracts

Misleading problems often show up when your:

• Instagram post says one thing
• Website FAQ says another
• Quote says something else
• Invoice/terms include different conditions again

Try to standardise the core promises you make (scope, exclusions, delivery, turnaround times, refund approach) so your customer doesn't receive mixed messages.

As a general principle, the clearer your agreement is, the easier it is to avoid disputes about what was promised. If you're refreshing your customer-facing documents, it can help to understand what makes a contract legally binding, because "handshake deals" and casual emails can still create enforceable obligations.

3. Treat "Free", "Unlimited", And "Guaranteed" As High-Risk Words

These words aren't banned, but they're frequently misleading if the conditions aren't front and centre.

For example:

• "Free" - is it truly free, or just included elsewhere in the price?
• "Unlimited" - are there caps, fair use limits, time limits, or exclusions?
• "Guaranteed" - what exactly is guaranteed, and in what circumstances?

If you need to use these terms, keep the conditions close to the claim and written in plain language.

4. Keep Your Website And Ads Updated (And Remove Old Claims)

Outdated pages are a surprisingly common cause of misleading conduct. You might change your offer or pricing, but old landing pages, old PDFs, or pinned posts remain live.

Set a simple recurring task (monthly or quarterly) to review:

• Pricing pages
• Sales pages and FAQs
• Refund/returns wording
• Delivery/shipping timeframes
• Credentials and "about us" claims
• Testimonials and before-after content

Consistency is your friend here.

5. Be Careful With Customer Data And Targeted Marketing Statements

Misleading conduct isn't only about pricing - it can also involve what you say about privacy, data use, and communications (for example, saying you "never share data" when you use third-party service providers, or claiming customers can "unsubscribe anytime" when it's not actually straightforward).

If your business collects personal information through your website (contact forms, bookings, mailing list sign-ups, account creation), you'll usually want a clear Privacy Policy that matches what you actually do.

6. Train Your Team On "Sales Talk" Risk Areas

Many misleading issues happen in verbal conversations - especially when a staff member is trying to be helpful and reassure a customer.

Consider a short internal script or training on:

• What staff can and can't promise about timeframes
• How to describe "typical" outcomes vs exceptional outcomes
• How to handle refund questions without overpromising
• When to escalate to a manager (for example, a complex complaint)

It can feel formal, but it's one of the simplest ways to reduce misleading conduct risk as you grow.

What Happens If Your Business Is Accused Of Being Misleading?

If a customer believes your business has been misleading, you might see the issue escalate in a few different ways - and it's rarely "just a bad review".

Depending on the situation, you could face:

• Customer complaints requesting a refund, cancellation, or discount
• Chargebacks or payment disputes (particularly for online businesses)
• Disputes Tribunal claims (common for smaller transactions)
• Regulatory attention (for example, if complaints are widespread)
• Costly reputational damage (reviews, social posts, lost referrals)

It can also create internal time-cost: investigating what was said, pulling emails, checking website versions, and trying to settle disputes without admitting fault.

If you spot an issue early, a practical approach is usually:

• Pause or correct the claim immediately (ads, website wording, product listings)
• Gather evidence (screenshots, sales scripts, invoices, communications)
• Respond calmly and professionally (avoid defensive language)
• Consider whether a remedy is appropriate (refund, replacement, clarification)
• Get tailored legal advice before putting anything in writing if the matter is serious

And if the dispute is tied to what was promised during negotiations, it may be connected to misrepresentation-type issues (even if no one uses that word). This is where getting advice early can save a lot of time and stress.

Key Takeaways

• In New Zealand, misleading conduct can include statements, omissions, and overall impressions created by your advertising, website, pricing, and sales conversations.
• The Fair Trading Act 1986 is the key law for misleading conduct, and it can apply to both consumer and business-to-business transactions.
• Common misleading risk areas for small businesses include pricing and discounts, "guaranteed" claims, testimonials, urgency marketing, and outdated website information.
• Disclaimers can help, but they won't necessarily fix a misleading headline claim - your best protection is clear, accurate messaging supported by evidence.
• Keeping your marketing aligned with your quotes, invoices, and customer terms reduces disputes about what was promised and what the customer thought they were buying.
• Simple processes (regular website reviews, team training, proof for claims) go a long way toward staying compliant as your business grows.

This article is for general information only and isn't legal advice. If you'd like advice about your specific situation, get in touch with a lawyer.

If you'd like help reviewing your advertising, website wording, customer terms, or a complaint involving misleading conduct, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.