When ‘accurate’ advertising misleads: The risks behind promotional and comparative advertising claims

An advertising claim can be accurate and still mislead consumers. Two recent Federal Court decisions involving Choosi and Coles demonstrate how and highlight why businesses need to consider the overall impression their advertising creates, rather than just the accuracy of individual words or prices.

In Australian Securities and Investments Commission v Choosi Pty Ltd, in the matter of Choosi Pty Ltd (liability) [2026] FCA 1196, the Federal Court found that Choosi Pty Ltd (Choosi) breached subsections 12DB(1)(a), 12DB(1)(e) and 12DF(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). Through its website, television advertisements, advertorials and Facebook advertisements, Choosi represented that its funeral and life insurance comparison service compared policies from a ‘range of insurers’, when in fact the policies compared during the relevant period were issued by only one or two insurers. The judgment determined liability only, with orders for relief and penalty reserved for later determination.

In the second case, Australian Competition and Consumer Commission (ACCC) v Coles Supermarkets Australia Pty Ltd [2026] FCA 598, the Federal Court found that Coles had temporarily increased the retail prices of 245 products before placing them on ‘Down Down’ promotions at prices higher than, or the same as, the prices at which those products were ordinarily sold before the temporary increase. This amounted to misleading conduct in breach of section 18 of the Australian Consumer Law.

Both decisions reinforce the importance of considering the overall impression created for consumers and whether the substance of the offering matches the message conveyed. A business also cannot fix a misleading headline message through disclaimers provided later in the customer journey, particularly where the initial advertising has already induced a consumer to engage with the service.

Not enough choices from Choosi

Choosi operates a service that allows consumers to compare and apply for funeral and life insurance policies. Through its website and advertising, it promotes the service as saving consumers the time and effort of comparing the policies themselves.

However, the range of insurers represented on the platform was limited. From 1 July 2019, all funeral insurance policies compared by Choosi were issued by one insurer, Hannover Life Re of Australasia Ltd (Hannover). Between 1 July 2019 and 30 June 2023, the life insurance policies compared were issued by Hannover, apart from one policy issued by Swiss Re Life & Health Australia. From 1 July 2023, all life insurance policies compared by Choosi were issued by Hannover.

ASIC alleged that Choosi’s website and advertising conveyed the misleading impression that its service compared policies from a ‘range of insurers’. The Court accepted ASIC’s case.

The Federal Court’s reasoning

A central issue was how an ordinary and reasonable consumer would interpret the claim that Choosi compared policies from a ‘range of insurers’. Choosi argued, among other things, that two insurers could be considered a ‘range’. However, the Court rejected the argument, which was simply based on the literal or dictionary meaning of that word. The claim had to be considered in its broader commercial context.

Importantly, Choosi promoted its service on the basis that it would save consumers the time and effort involved in researching different insurance products themselves. In that context, the value of the comparison service depended substantially on how much of the market it covered.

The Court found that consumers would understand the reference to a ‘range of insurers’ as indicating that Choosi considered a selection of insurers available in the market. The limited number of underlying insurers did not match that impression.

Choosi’s disclosures also did not correct the misleading impression. The platform sought to rely on other information and disclaimers available to consumers, including materials identifying the relevant insurers and information provided through later telephone interactions. However, those matters did not overcome the misleading impression created by their advertising.

When price reductions at Coles create a misleading impression

In Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2026] FCA 598 (Coles), the Federal Court found that the supermarket’s ‘Down Down’ prices were misleading even though the advertised price reductions were, in a literal sense, accurate.

The Court found that the relevant ‘Down Down’ tickets conveyed to ordinary consumers that Coles had reduced the price from the ‘was’ price and, implicitly, that the reduction involved a real or genuine discount from a price at which the product had ordinarily been offered for a reasonable period. The decision shows that an expressly accurate comparison between two prices may still mislead if the surrounding presentation conveys a false impression about whether the saving is genuine.

Key takeaways for businesses

With Black Friday and year-end sales approaching, these two decisions highlight a number of key lessons for businesses planning their promotions:

• consider the overall impression: Businesses should consider what an ordinary and reasonable consumer is likely to understand from the advertising
• claims about a ‘range’ or ‘choice’ require careful review: These words may convey an impression about the breadth of the market considered. This is particularly important where a service is promoted as removing the need for consumers to undertake their own research. There is no fixed number for what constitutes a ‘range’. The claim must be assessed in its context
• campaign language and design must be considered together: A court will not necessarily assess a ‘was’ price, ‘now’ price or promotional slogan in isolation. The words, pricing information and broader presentation can combine to create a representation about the nature and extent of the saving for consumers
• look beyond the brands when advertising options for comparison: Multiple brands may still represent only a small number of providers or products
• do not rely on later disclosures to correct the headline message: Any limitations on a comparison service should be communicated clearly and prominently. Fine print, disclosures or information provided later may not correct a misleading overall impression.

If you have questions about the implications of these decisions or need assistance with your advertising claims, please get in touch with us.

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Howard Rapke

Julia Townley

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