Disclaimer: This article is for general informational purposes only and is not meant to be used or construed as legal advice in any manner whatsoever. All articles have been scrutinised by a practising lawyer from Tristan & Partners to ensure accuracy.
Back in 2014, I remember hearing news about how Red Bull was being sued for not actually giving you wings as per their slogan.
I was a kid then, and all I saw was the headlines before immediately jumping to conclusions.
“Of course it can’t do that, what were you expecting?”
The meaning behind the slogan is that the drink is meant to give you so much energy that you feel as though you could fly.
The man responsible for the lawsuit, Benjamin Careathers, obviously knew that as well. So why was he suing?
Red Bull claimed on their website, and still does, that “the 80 mg of caffeine contained in one 250 ml can of Red Bull Energy Drink is about the same amount as in a cup of coffee.”
Careathers’ investigation, however, found that this wasn’t the case at all—a can of the energy drink had less caffeine than the average cup of coffee.
Thus, he sued the company on the grounds of false advertising, and the company ended up paying US$13 million to settle the case.
But that whole situation was done on American soil. How does it work here in Malaysia?
What the law says
Our country does indeed have several laws pertaining to false advertising.
Section 10 (1) of the Consumer Protection Act 1998 specifically prohibits the “false or misleading representation” on the traits, history, and condition of goods.
Incorrect claims on “the existence, exclusion or effect of any condition, guarantee, right or remedy” is also prohibited, and the full document can be viewed here.
The penalty for false advertising under Section 10 (1) of the Consumer Protection Act 1998 is a fine not exceeding RM250,000 for a body corporate on the first offence and RM500,000 if it is a subsequent offence.
As for non-body corporate, the penalty for false advertising is a fine not exceeding RM100,000 or imprisonment not exceeding three years or both. For any subsequent offence by a non-body corporate, the penalty shall be a fine not exceeding RM250,000 or imprisonment not exceeding six years or both.
The Trade Descriptions Act 2011 is another that we have, and it prohibits the application of a “false trade description” to any goods.
Convicted corporations will be liable to fines up to RM250,000, doubling to RM500,000 should they do it again.
Individuals will be subject to either a maximum fine of RM100,000, up to three years of imprisonment, or both. Subsequent offences will increase these punishments to an RM250,000 fine and up to five years of jail time, again with the chances of having to serve both.
Not to burst your bubble but…
Now, that’s all well and good. But say you come across a false advertisement. You’ve been had, and you want compensation or to selflessly bring justice through a lawsuit the American way.
Well, you can’t actually sue the advertiser for it here.
In an article from The Star reposted by the Malaysian Bar, author Bhag Singh puts it like this.
“A buyer’s rights are governed by the contract entered into, and rarely by the claims made in an advertisement.”
As it happens, ads in Malaysia are merely perceived as things that draw attention to a potential deal. Because they aren’t legally binding contracts, your rights are technically not infringed upon.
That is to say, when you see an ad and go out of your way to buy the product being promoted, that’s seen as you taking the initiative. As far as the law is concerned, it is a choice that you actively made, not something forced upon you or agreed upon through an “offer.”
Case in point, the reader which Singh addressed the article to.
Singh’s reader bought a unit in a condominium following a newspaper ad in which the developer promised that a covered walkway would be built from the building to the LRT station.
Come to find out, the walkway was built, but the cover was nowhere to be found.
“Where an advertisement is required to be licensed and to comply with certain requirements, and is published not in accordance with such requirements, it would constitute an infringement of the code or Act,” Singh explained.
“However, this does not give an aggrieved person a basis to claim for damages or for that matter any form of specific performance against the party that has published such an advertisement.”
Playing by the book
So, what can you do about false advertising in Malaysia?
Arguably the most convenient way and what Advertising Standards Malaysia (ASA) chairman Dato’ Mah Weng Kwai recommends is to report offenders to their organisation.
The ASA was founded in 1977 and acts as an independent body to ensure adherence to the otherwise self-regulating advertising industry.
The organisation works to resolve industry-related issues stemming from non-compliance to their Malaysian Code of Advertising Practice which can be found here.
This can be done online through a tab on their website labelled “Lodge a Complaint.”
Once a complaint is submitted, the reported company will be investigated and be hit with the appropriate penalty should they be found guilty.
Under Section 29 of the Consumer Protection Act, the Court may additionally provide reliefs in the event of a contravention, i.e., if the reported company is in the wrong. Such reliefs include refund of money, or recovery of losses and damages.
Aside from them, people can also report false advertising to the Ministry of Domestic Trade and Costs of Living, the Assistant Controller of the Consumer Protection Act, and the Assistant Controller of the Trade Description Act.
It may be an anticlimactic solution, but at the very least it’ll save you on court and legal fees.
- Read other articles we’ve written about Malaysian startups here.
Featured Image Credit: Images used under licence from Shutterstock / Freepik
