In a competitive market, it is critical to make your product or service stand out. But one area where businesses must tread carefully is making claims about endorsements, approvals, or affiliations - particularly when those claims are not accurate. Misleading statements of this kind can amount to breaches of the Australian Consumer Law (ACL), exposing businesses to significant penalties and serious reputational damage.
One of Australia’s best-known mattress franchises, Bedshed, has recently been caught napping on consumer law compliance, facing allegations of misleading advertising linked to the National Disability Insurance Scheme (NDIS).
The Australian Competition and Consumer Commission (ACCC) issued two infringement notices against the Aussie bedding giant after it caught the retailer dozing off on the job resulting in a hefty $39,600 penalty.
The issue? Bedshed claimed some of its products were “NDIS approved” and “NDIS permitted”. While that may sound dreamy to some, there’s one major issue: there is no such thing as an NDIS-approved product. The NDIS does not approve or endorse products, and implying it does can seriously mislead customers, especially vulnerable Australians seeking to spend their NDIS funds wisely.
According to the ACCC, Bedshed was advertising mattresses, furniture and accessories as if they had received an official stamp of approval from the NDIS. These claims appeared both on their website and in Google ads. But these endorsements were false. A bed-time story, one might say.
Of Bedshed’s 43 brick-and-mortar stores, we note that 11 are approved by the NDIS Quality and Safeguards Commission as registered NDIS providers of assistance products for personal care and safety. However, this does not necessarily equate to Bedshed’s products being NDIS approved. There are no specific categories of goods or services that are automatically approved or funded under the NDIS for all participants.
Whether a particular good or service will be funded depends on the individual participant’s plan, including their identified needs and goals. In any case, the NDIS does not provide general approval or accreditation for particular goods or services. As ACCC Chair Gina Cass-Gottlieb has said: “The NDIS does not approve any specific goods or services and to suggest otherwise is misleading and risks taking advantage of vulnerable consumers”.
This matter follows the ACCC’s proceedings against a NDIS service provider late last year, Ausnew Home Care Services, for making similar false and misleading representations that certain products were “NDIS approved”. This case is currently before the court.
The recent action against Bedshed is part of a broader campaign by the NDIS Fair Price and Australian Consumer Law Taskforce, which is targeting misleading advertising, price gouging and exploitative conduct aimed at some of Australia’s more vulnerable consumers.
Under the Australian Consumer Law (ACL), false or misleading representations about approval, affiliation or endorsement can carry serious legal consequences. Section 29 of the ACL prohibits businesses from making false or misleading representations that:
Beyond unambiguously fictional claims of “NDIS-approved”, the ACCC has taken action against false claims of:
Now more than ever, businesses working in regulated sectors - especially those in healthcare, disability services and aged care - must ensure their advertising and marketing materials meet both the letter and spirit of the law.
Whether you are planning a new campaign or reviewing existing marketing materials, it pays to double-check that your claims are accurate and substantiated - especially when it comes to endorsements, partnerships, or certifications.
If you are unsure, don’t lose sleep over it, get in touch for clear, practical and commercially-focused advice.
This article was written by Ariel Bastian Senior Associate and Nisali Pallewela Solicitor Corporate Commercial.