TomTom, MiTAC, Garmin agree to stop using “lifetime claims” in advertising after ACCC crackdown
The ACCC has warned businesses about making claims which may be understood differently by customers after reaching an agreement with GPS giants.
A commitment from three of Australia’s largest GPS navigation brands to stop using “lifetime” claims in their advertising underscores the importance of ensuring marketing slogans match consumer understanding.
TomTom ANZ, MiTAC Australia and Garmin Australasia yesterday agreed to stop using certain terms in their advertising after the consumer watchdog expressed concern they could be misleading.
The ACCC said each of the companies had made lifetime claims in marketing on their websites, packaging, point-of-sale marketing and in retailer’s catalogues.
These include statements such as: “Lifetime FREE Maps – Never worry about maps again, “Free Lifetime Maps & Traffic”, and “Lifetime TomTomTraffic”.
While the statements use the term “lifetime”, the businesses are legally able to stop providing map services before the end of the lifetime of a device in some cases.
The ACCC said these “limitations” were not communicated to customers in a “prominent way”.
“We believe the statements about ‘lifetime’ services made by these GPS manufacturers were inconsistent with what consumers would understand ‘lifetime’ to mean,” ACCC commissioner Sarah Court said in a statement.
“Consumers would have rightly expected to receive those services for the lifetime of the device, without the manufacturer being able to unilaterally terminate the commitment.”
According to Mitchell Zadow, principal lawyer at Sharrock Pitman Legal, the case highlights the importance of considering how customer communications and product statements may be understood by customers.
“All businesses need to be careful about their representations to their customers,” Zadow tells SmartCompany.
“The current environment is very much focused on consumer rights and protections, and this case is another example of the ACCC demonstrating that focus.”
Zadow says a mismatch between what a business understands a term to mean and what consumers might reasonably think can land brands in hot water with the regulator.
Broad terms such as “lifetime” are particularly susceptible, particularly if there is a different legal definition for a term than is generally understood.
Being transparent with consumers about what broad or general terms mean in advertising or other communication is a way to avoid getting in trouble.
Avoiding vague language altogether is another possible solution.
“Businesses must not deceive or mislead consumers in advertising, whether through small print, or by using ill-defined, broad terms like ‘lifetime’, and they should take care to use terms that match the understanding of consumers,” Court said.
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