When running competitions or promotions that offer gifts or prizes make sure you do not mislead consumers.
When you run a competition, or other promotion offering gifts or prizes, all the conditions that apply, including any relevant time limits, must be clearly stated.
Gifts and prizes must be described accurately, and must not mislead people into thinking that what they stand to gain or win, or their chance of winning, is better than it actually is. You must not offer gifts or prizes that you do not intend to provide, or do not intend to provide as offered.
Finally, you must not disguise the cost of a 'free' gift or prize by including it in the selling price of the advertised goods.
Example: An investment company ran a television advertising campaign promoting a 'Money and the Bach Summer Bonus Draw' which implied that people buying bonds in a specific time period would be placed in a draw to win the major prize, valued at $1.5 million. The company however intended to run a two tier prize draw. Eligible consumers would only be placed in an initial draw; the winner of which would go on to be placed in a second draw where they would draw from 100 envelopes only one contained the major prize of $1 million and a further $500,000 to go towards a bach, the other 99 envelopes contained a cheque for $10,000. Therefore, the winner of the first draw only had a 1% chance of winning the advertised prize. The company was convicted under the Fair Trading Act and fined.