False Advertising Pitfalls And Compliance In New Zealand

If you’re running a small business, marketing is how you get noticed. But in New Zealand, the line between “good marketing” and “false advertising” can be thinner than you think.

One unclear claim on your website, one “was/now” price that can’t be backed up, or one enthusiastic social media post that overpromises results can put you in breach of consumer law - and that can mean complaints, refunds, reputational damage, and even enforcement action.

This guide breaks down the most common false advertising traps and gives you practical, business-friendly steps to improve false advertising compliance in NZ (without sucking the personality out of your brand).

What Counts As False Advertising In New Zealand?

In NZ, “false advertising” isn’t just about outright lies. It can include anything that misleads (or is likely to mislead) customers.

The main law to be aware of is the Fair Trading Act 1986 (FTA). In simple terms, it requires businesses to avoid:

• Misleading or deceptive conduct (including through what you don’t say, or how something is presented).
• False or misleading representations about goods/services (for example, quality, price, benefits, or approval).
• Unsubstantiated representations (making claims you can’t reasonably back up).

Depending on what you sell, the Consumer Guarantees Act 1993 (CGA) also matters. It’s not “advertising law” as such, but it affects how you describe products and what customers can expect when something goes wrong (especially around refunds, repairs, and replacements).

It’s also worth remembering: advertising isn’t just your paid ads. It includes:

• your website copy and product pages
• social media posts (including stories and reels)
• email marketing and SMS campaigns
• flyers, signage and menus
• customer reviews and testimonials you repost
• influencer content you commission or repost
• quotes, proposals, and sales scripts used by staff

So, good false advertising compliance means setting up a system - not just “checking the website once”.

Common False Advertising Pitfalls (And How They Catch Small Businesses)

Most small businesses don’t set out to mislead customers. The issues usually happen because marketing moves fast, and legal checks happen later (or not at all).

Here are some of the biggest traps we see.

1) Pricing Claims That Don’t Stack Up

Pricing is one of the quickest ways to end up with a complaint, because customers are very alert to anything that feels unfair or “too good to be true”. Common issues include:

• “Was/Now” pricing where the “was” price was never genuinely charged (or was only charged briefly).
• Hidden fees added later (booking fees, service fees, credit card fees, installation fees, “mandatory” add-ons).
• Headline price advertising that doesn’t include unavoidable costs.
• Incorrect sale periods (e.g. “Ends tonight” but the sale continues for weeks).

If you do specials or promotions, make sure you’re clear about what’s included in the price and whether any conditions apply. The more “scroll-stopping” your price claim is, the more careful you need to be about substantiating it.

For a deeper look at price representations, advertised price rules are a good starting point.

2) “Results” Claims You Can’t Prove

This comes up a lot for service businesses (and product businesses selling outcomes). Examples include:

• “Guaranteed to increase revenue by 30%.”
• “Get approved in 24 hours.”
• “Permanent results.”
• “Cures”, “treats”, or “prevents” (especially in health and wellness industries).

Under the Fair Trading Act, you generally need to have a reasonable basis for claims at the time you make them - not after someone challenges you.

If your results vary depending on customer effort, circumstances, or external factors, you’ll usually want to frame your marketing more carefully, for example:

• use “can help” instead of “will”
• be specific about assumptions (timeframes, inputs, customer responsibilities)
• avoid “guarantee” language unless you genuinely mean it (and can honour it)

3) “Made In NZ”, Sustainability And Ethical Claims

Customers care about origin and values, but that also makes these claims high-risk if they’re vague or exaggerated.

Common examples include:

• “Made in NZ” when components are imported and only assembled locally (this can still be fine, but you need accuracy and clarity).
• “Eco-friendly” or “sustainable” without explaining what that means in practice.
• “Plastic-free” when there’s still plastic in inner packaging.
• “Ethically sourced” without supplier verification.

For origin claims like “Made in NZ”, try to be specific about what actually happens in New Zealand (for example, “Designed in NZ”, “Assembled in NZ”, or “Made in NZ from imported materials”, where appropriate). If you’re making values-based claims, keep records. For example, supplier certificates, invoices, manufacturing details, testing results, or internal processes that support what you’re saying.

4) Testimonials, Reviews And Before/After Content

Testimonials and user-generated content can be powerful, but they can also create risk if they imply typical results when they’re actually exceptional.

Watch out for:

• Cherry-picked results that imply everyone will get the same outcome.
• Before/after images without context (timeframe, conditions, whether results are typical).
• Editing or rewriting reviews in a way that changes the meaning.
• Using testimonials from people who weren’t genuine customers.

A good practical rule: if a reasonable customer would take the testimonial as a promise, you should either (1) be comfortable standing behind it, or (2) present it with clear, honest context.

5) Competitor Comparisons And “#1” Claims

Small businesses often use comparative marketing to stand out: “best value”, “cheapest”, “#1 in NZ”, “better than the rest”. These can be risky if they’re presented as fact rather than opinion.

To reduce risk:

• treat “best” as an opinion statement (and avoid dressing it up as a measurable fact)
• avoid “#1” unless you have a credible basis (e.g. independent market data)
• be careful with comparisons that rely on different inclusions (apples vs oranges)

False advertising compliance isn’t about avoiding bold marketing - it’s about making sure your bold claims can actually be supported.

Why “Fine Print” Isn’t A Magic Fix (And When Disclaimers Help)

A lot of businesses try to solve compliance issues by adding “fine print” at the bottom of an ad. Sometimes that helps, but it doesn’t automatically protect you.

As a general principle, you can’t use a disclaimer to “take back” a strong misleading headline. If your main message creates the wrong impression, hiding the truth in small text usually won’t be enough.

That said, well-written, clear disclaimers can be genuinely useful when they:

• clarify assumptions (e.g. delivery timeframes vary by region)
• explain limits (e.g. “intro offer for first-time customers only”)
• confirm what’s included/excluded (e.g. installation not included)
• set conditions for promotional offers (e.g. while stocks last)

The key is that the disclaimer should be:

• easy to find (not buried)
• easy to read (plain language)
• consistent with the main claim (not contradicting it)

If you’re using disclaimers across your website, advertising, proposals, or packaging, it’s worth getting them right upfront - disclaimers can be a practical tool, but only when they’re used properly.

How To Build A Practical False Advertising Compliance Process (Without Slowing Your Marketing)

For most small businesses, the goal isn’t perfection - it’s having a repeatable process so you don’t rely on memory (or a last-minute panic before a campaign launch).

Here’s a simple approach we often recommend.

Step 1: List Your “High-Risk” Claim Types

Start by identifying the areas where you’re most likely to overpromise. For example:

• price and discounts
• delivery timeframes
• performance or results
• “free” offers
• product origin or sustainability
• industry-leading or “best” claims

Once you know your high-risk zones, you can create templates and approval checks around them.

Step 2: Keep A “Proof Folder” For Key Claims

Keeping on top of false advertising compliance becomes much easier when you can quickly show the basis for what you’re saying.

Your proof folder might include:

• supplier specs and certificates
• lab testing or quality assurance documents
• pricing history screenshots/records for “was/now” promotions
• shipping terms from couriers or internal fulfilment metrics
• clinical evidence (where relevant) and professional advice
• customer survey data (if you’re making “most customers” type claims)

Think of it as part of your business operations, just like your bookkeeping.

Step 3: Standardise Your Offers And Customer-Facing Terms

A lot of advertising disputes happen because the marketing says one thing and the customer experience says another.

If you advertise a “hassle-free returns process” or “money-back guarantee”, make sure your actual returns approach matches what customers are being led to expect. Having a clear policy can reduce misunderstandings and complaints.

If you sell online (or even just promote your terms online), it can help to align your marketing with your returns position and customer comms - returns, refunds and exchanges are often where “misleading” complaints show up in real life.

Step 4: Train Whoever Posts (Yes, Even If It’s “Just Socials”)

If you have staff, contractors, or an agency posting on your behalf, you’ll want them to understand the basics. Most problems are caused by:

• posting quickly without checking the facts
• reposting a customer comment that makes a big promise
• using trending formats (“POV: this cures your stress”) that aren’t accurate

A simple internal rule like “no guarantees, no medical claims, no price comparisons without approval” goes a long way.

Step 5: Don’t Forget Email And SMS Marketing Compliance

False advertising compliance isn’t limited to websites and ads - the same principles apply to direct marketing.

If you’re promoting discounts, “exclusive” deals, or limited-time offers via email, make sure:

• the offer terms are clear
• the offer is real (not artificially “limited”)
• your unsubscribe process works properly

And separately, NZ businesses also need to think about spam rules and consent-based marketing. If email is part of your growth strategy, email marketing laws are worth understanding early so you don’t build bad habits into your campaigns.

Influencers, Affiliates And Social Media: Where Many Businesses Slip Up

Influencer marketing can be a brilliant way to grow quickly, especially for ecommerce, hospitality, beauty, fitness, and lifestyle brands.

But influencer content can trigger false advertising problems if:

• they make claims you wouldn’t make yourself (e.g. “guaranteed results”)
• they don’t disclose the commercial relationship clearly (paid, gifted, affiliate, etc.) in line with New Zealand’s advertising guidance (including ASA standards)
• they demonstrate product use in a way that’s unsafe or unrealistic
• you repost their claim-heavy content onto your own channels

From a business owner perspective, the risk isn’t just what you say - it’s what’s said for you, especially if it’s part of your marketing strategy.

To manage this, it helps to:

• provide influencer briefs that restrict prohibited claims
• require content approval (at least for key campaigns)
• include clear obligations about compliance and disclosures
• document what was agreed (deliverables, messaging, usage rights)

In many cases, it’s worth putting proper paperwork in place so expectations are clear on both sides - influencer agreements can help you control brand risk while still giving creators room to be authentic.

What Happens If You Get It Wrong?

It’s easy to think false advertising compliance is only for big corporations. But small businesses can feel the impact more sharply because one public complaint can do real damage.

Depending on the situation, risks can include:

• Customer complaints and refund demands (including “I wouldn’t have bought this if I’d known”).
• Competitor complaints (especially around pricing and comparisons).
• Platform enforcement (ads rejected, accounts restricted).
• Regulatory attention and formal warnings or enforcement action.
• Costly reprinting or rework (packaging, signage, website updates).
• Reputation damage that’s hard to undo.

There’s also the internal cost: if your marketing team (even if that’s just you) is constantly firefighting complaints, it slows growth and makes promotions stressful rather than exciting.

That’s why setting up a “compliance by default” process is usually cheaper than fixing problems later.

And if you’re worried your advertising approach may be pushing the line, it’s smart to get advice early - not after a campaign has already gone live.

It can also help to think more broadly about marketing conduct and customer expectations - false advertising often overlaps with unfair business practices, especially where promotions are designed in a way that feels misleading in practice.

Key Takeaways

• In NZ, false advertising compliance is largely governed by the Fair Trading Act 1986, which covers misleading conduct and claims you can’t substantiate.
• Common risk areas include pricing and discounts, results-based claims, sustainability/origin claims, and testimonials that imply typical outcomes.
• Disclaimers can help when they clarify or add context, but they usually can’t “fix” a misleading main message - they need to be clear, prominent, and consistent.
• A simple compliance system (high-risk claim list, proof folder, standard offer terms, and staff training) can prevent most advertising problems before they happen.
• Influencers and affiliates can create legal risk if they overpromise or don’t disclose relationships clearly (including under ASA standards), so it’s worth documenting expectations in writing.
• Getting it wrong can lead to refunds, complaints, platform issues, and reputational damage - so it’s best to build compliance into your marketing from day one.

If you’d like help reviewing your advertising, promotions, website claims, or marketing terms (so you can grow confidently without stepping into legal traps), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.