Social Media Advertising In New Zealand: Legal Risks And Compliance

This article is general information for New Zealand businesses and isn’t legal advice. It’s not a substitute for getting advice on your specific campaign, industry, and sales process.

Social media advertising can be one of the fastest ways to get in front of new customers in New Zealand. A single campaign can build awareness, drive sales, and help you grow quickly.

But because social media advertising is so public (and so easy to share), it also carries real legal risks. If your ad is misleading, if you collect data in the wrong way, or if you use someone else’s content without permission, you can end up dealing with complaints, takedowns, refund demands, reputational damage, or even regulator attention.

The good news is you don’t need to be a legal expert to run compliant social media ads. You just need to know the most common risk areas and set up a few practical systems so your marketing stays both effective and legally safe.

Below, we break down the key legal issues NZ small businesses should think about before launching (or scaling) social media advertising.

What Laws Apply To Social Media Advertising In New Zealand?

When you run social media ads, you’re still “advertising” in the legal sense. It doesn’t matter that it’s online, informal, or only running for 24 hours.

Some of the most common legal frameworks that apply include:

• Fair Trading Act 1986 (FTA) (misleading or deceptive conduct, false representations, bait advertising, unfair practices)
• Consumer Guarantees Act 1993 (CGA) (consumer guarantees and remedies for goods/services sold to consumers)
• Privacy Act 2020 (collecting, using, storing, and disclosing personal information)
• Copyright Act 1994 (using images, videos, music, and other creative works)
• Trade Marks Act 2002 (brand confusion, misuse of trade marks, competitor comparisons)
• Unsolicited Electronic Messages Act 2007 (if your ad results in marketing messages like email/SMS)
• Gambling Act 2003 (where a promotion involves a prize and an element of chance, and depending on how entry is structured)

On top of legislation, self-regulatory rules and platform policies can also shape what you can and can’t do. In New Zealand, the Advertising Standards Authority (ASA) administers key advertising codes (including rules about misleading claims, social responsibility, identification of ads/“influencer” style content, and sector-specific standards). These codes can be particularly relevant for health-related claims, financial claims, competitions, and age-restricted products.

If you’re running ads as part of an online sales funnel, your overall legal foundations matter too (for example, having clear website terms, refund settings, and privacy settings that match what you’re actually doing). Many businesses bundle this into their broader Business Terms so their marketing, checkout, and customer expectations all line up.

Are Your Social Media Ads Misleading? (Fair Trading Act Risks)

The single biggest legal risk in social media advertising is simple: saying something that isn’t true or could mislead a typical customer.

Under the Fair Trading Act, it’s not only “lies” that are a problem. You can get into trouble if your advertising:

• creates the wrong overall impression (even if each individual sentence is technically true)
• omits important qualifications or conditions
• uses before-and-after imagery that isn’t representative
• implies an endorsement, certification, or approval you don’t have
• promises results that customers are unlikely to achieve

Common Risk Areas In Social Media Ads

Small businesses often get caught out because social media ads are short, punchy, and built to convert. That format can clash with legal requirements that expect clarity.

Here are a few common examples where businesses should be careful:

• Pricing ads: “$49 only” but the price requires a subscription, add-ons, shipping, or a minimum spend.
• Discount claims: “50% off” when the “was” price wasn’t a genuine regular price.
• Time pressure: “Ends tonight” when the offer actually keeps running.
• Availability: advertising a popular item without reasonable stock (this can also overlap with bait advertising concerns).
• Performance claims: “Guaranteed results” without solid basis, especially for health, fitness, finance, or skincare.

Practical Compliance Tips (That Still Let Your Ads Convert)

You don’t need to turn every ad into a legal document. But you do need to make sure the core claim is accurate and that key limitations are easy to find.

• Keep screenshots/records of what you ran, when, and what landing page it linked to (helpful if there’s a complaint later).
• Make the “deal” match the checkout (price, inclusions, exclusions, delivery fees, subscription terms).
• Avoid absolute statements like “guaranteed”, “cures”, “permanent”, “no risk” unless you can back them up.
• Use clear qualifiers (for example, “from $X”, “conditions apply”, “typical results vary”) and make sure those qualifiers are meaningful, not hidden.

If you want your customer journey to be consistent end-to-end, it’s worth checking your Online Shop Terms match what your ads promise (especially around delivery timeframes, refunds/returns, and subscriptions).

What If You Offer Giveaways Or Promotions In Social Media Advertising?

Giveaways and promotions can be great for engagement, but they can also create problems if your rules are unclear or inconsistent.

From a legal perspective, the key is that your promotion should not be misleading and should clearly explain:

• who can enter (NZ only? 18+ only?)
• how to enter (comment, sign-up, purchase)
• start and end dates (including NZ time zone)
• how winners are chosen and notified
• what the prize is (and any limitations)
• any key conditions (for example, travel not included, colour/style subject to availability)

If the promotion involves any element of chance (or looks like it does), you should be careful about how it’s structured and described. In NZ, the line between a simple giveaway, a sales promotion, and activity regulated under the Gambling Act can depend on factors like whether entry requires payment (including buying a product), and whether the outcome is determined by chance or skill. Even where a campaign feels “simple,” unclear rules can lead to disputes, complaints, or customers feeling misled.

For anything more than a very basic giveaway, having proper Competition Terms And Conditions helps you set expectations upfront and reduces the risk of someone arguing the outcome was unfair.

Also keep in mind: if your promotion is designed to collect emails or phone numbers, you’ll need to consider privacy and marketing rules (we cover those below).

Are You Collecting Customer Data Through Social Media Ads? (Privacy Act 2020)

Many social media advertising campaigns aren’t just about visibility. They’re designed to collect leads, build audiences, and retarget customers.

That often involves collecting personal information, such as:

• names
• emails
• phone numbers
• addresses (if customers purchase)
• preferences and behavioural data (for retargeting)

In New Zealand, the Privacy Act 2020 expects you to handle personal information responsibly. Practically, this means being clear about what you’re collecting, why you’re collecting it, how you’ll use it, and how you’ll keep it safe.

Where Small Businesses Often Slip Up

• Lead forms with no privacy messaging: collecting details without telling people what will happen next.
• Unexpected marketing follow-up: someone downloads a free guide and then gets ongoing marketing they didn’t expect (and, where required, without proper consent/unsubscribe options).
• Retargeting without clarity: not being transparent about tracking tools and targeted advertising practices.
• Storing leads insecurely: exporting lead lists and storing them in shared drives without access controls.

Practical Steps To Stay Compliant

• Use a clear privacy notice at the point of collection (even a short statement with a link can help).
• Have a proper Privacy Policy that matches what you actually do with customer data.
• Only collect what you need (don’t collect extra fields “just because”).
• Secure your customer lists and control access, especially if contractors or multiple staff log in to your tools.

If you’re collecting leads or customer details through your campaigns, having a fit-for-purpose Privacy Policy is one of the simplest ways to show customers (and regulators) you take privacy seriously.

And if you use external agencies, freelancers, or software tools to manage campaigns and customer data, it’s also worth checking your contracts clearly set out who owns the data, who can access it, and what happens when the relationship ends. Often, that sits within a broader Service Agreement.

Can You Use Images, Videos, Music, And Testimonials In Social Media Ads?

Creative is the engine of social media ads. But creative content is also one of the easiest ways to accidentally infringe someone’s rights.

Copyright And Content Use (Photos, Videos, Music)

In general, you should assume that an image, video, or piece of music is protected by copyright unless you know otherwise.

That means you should be careful about:

• using images you found online (even if “everyone uses it”)
• reposting customer photos in paid ads without permission
• using music tracks as background audio in a commercial ad
• using a contractor’s work without a clear agreement about IP ownership

A practical approach is to:

• use your own original content, or
• use properly licensed stock content, or
• get written permission (and keep a record of it).

If you’re working with photographers, videographers, or creators, it’s worth making sure you have clear usage rights, including whether you can use the content for paid advertising (not just organic posts). Depending on the situation, a Photography Video Consent Form can help document permissions in a clear, practical way.

Testimonials, Reviews, And “Results” Claims

Testimonials can be powerful in social media advertising, but they need to be handled carefully. The key legal issue is whether the testimonial creates a misleading impression.

Good practices include:

• Only use genuine testimonials from real customers.
• Don’t edit testimonials in a way that changes the meaning.
• Avoid implying typical results if the outcome is unusual or depends on customer effort or circumstances.
• Be careful with medical/health style claims and “before and after” content (these can attract extra scrutiny under both law and advertising standards).

If you’re unsure whether a claim is “too strong,” a helpful rule of thumb is: could you prove it if someone challenged you? If not, it’s usually worth softening the claim or adding proper context.

What Legal Documents Help Support Compliant Social Media Advertising?

Social media ads don’t exist in a vacuum. Customers click through from an ad to your website, landing page, booking form, or checkout.

So if your ad is compliant but your website policies are unclear (or don’t match what the ad promised), you can still end up with customer disputes and refund pressure.

Depending on your business model, these are some of the most common documents that support compliant advertising:

• Website Terms (especially if you run a content site or membership platform)
• Online shop terms and refund/returns settings (particularly important for ecommerce and promotions)
• Privacy Policy (especially for lead generation, mailing lists, retargeting)
• Competition terms (for giveaways and promotions)
• Supplier/contractor agreements (for creatives, agencies, and marketing contractors)

For many small businesses, a solid set of Website Terms And Conditions provides a clear foundation for how customers can use your site and what they should expect when engaging with your business online.

If you sell goods or services online, you should also make sure your terms reflect New Zealand consumer law obligations. In many cases, you can’t exclude key CGA guarantees for consumers, and statements like “no refunds” can create problems if they misrepresent customers’ legal rights (including where remedies may be available for faulty goods or services).

It’s also worth thinking about how you manage customer complaints that arise from ads (for example, “this wasn’t what the ad said” issues). Your terms, your processes, and your ad copy should all line up so your team can respond consistently and fairly.

Key Takeaways

• Social media advertising is still advertising, so NZ laws like the Fair Trading Act 1986, Consumer Guarantees Act 1993, and Privacy Act 2020 can apply to your social media ads and the customer journey they create.
• NZ advertising is also shaped by the Advertising Standards Authority (ASA) Advertising Codes and platform policies, which can affect how claims, promotions, and certain product categories are presented.
• The biggest legal risk in social media advertising is misleading or deceptive claims, including unclear pricing, exaggerated results, or important conditions hidden in the fine print.
• If you run giveaways or promotions, clear rules and consistent communication can reduce complaints and disputes, and you should also watch for Gambling Act issues where a prize and chance (and sometimes payment/consideration) are involved.
• If your campaigns collect personal information (like leads), you should be transparent about what you collect and why, and have a Privacy Policy that matches your actual practices.
• Using images, videos, music, and testimonials in social media ads can raise copyright and misrepresentation issues, so it’s important to use licensed content and genuine, appropriately framed testimonials.
• Strong legal foundations (terms, privacy documentation, and clear supplier/marketing agreements) help ensure your social media ads match what customers experience after they click.

If you’d like help reviewing your social media advertising risks or getting your online legal documents sorted (so you’re protected from day one), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.