The ACCC has launched proceedings against two major vehicle distributors — Ateco and Jayco —alleging misleading advertising about vehicle durability and off-road capabilities. These cases are a timely reminder for all businesses, especially those in the automotive and consumer goods sectors, to ensure marketing claims are accurate, substantiated, and aligned with product performance.

The ACCC’s allegations - Ateco

The ACCC allege that despite being branded as “durable and tough”, suitable to be used on or near various terrains and off-road environments and without material risk of developing rust or corrosion within 10 years of manufacture, some LDV-branded vehicles have a propensity to develop rust and corrosion earlier than expected. 

The ACCC’s case against Ateco focuses on several promotional claims, including:

• A media release touting a “ten-year body perforation rust warranty” for the LDV T60.
• Social media posts showing the G10 and T60 in rugged, off-road environments.
• An Instagram post of the T60 driving through water, promoting its warranty and safety rating.

Whilst making the above representations to customers, the ACCC allege that, from around 2018, Ateco was aware rust and/or corrosion was appearing in the T60 and G10 vehicles within the first five years after manufacture. Further, between January 2018 and April 2019, Ateco received 110 notifications that these vehicles had rusted or corroded. Between 2018 and November 2024, there were at least 5,684 occasions where consumers complained about rust and/or corrosion. According to the ACCC, Ateco continued to advertise the relevant model vehicles as durable and suitable for diverse terrains (despite the above knowledge). 

The ACCC’s allegations - Jayco

In separate proceedings, the ACCC alleges that from around January 2020, Jayco advertised several caravan models on Instagram, Facebook and YouTube, as well as releasing print and digital promotional material representing the relevant model caravans had been designed specifically for use off-road and/or on four-wheel drive (4WD) tracks. Jayco’s advertising included the following kinds of statements or images:

• Instagram and Facebook posts, as well as printed promotional materials, depict a caravan navigating water and parked on rugged terrain.
• A Jayco brochure features imagery of a caravan being towed through water and positioned beside a body of water, accompanied by the statement emphasising a new chassis engineered “specifically for off-road adventures”

Despite these claims, Jayco’s warranty terms and conditions for the relevant models indicate the caravans are designed to be towed behind 4WD passenger vehicles, but are not actually designed for use or towing off-road and on terrain with hard impacts and heavy landings. In promoting the caravans in this way, knowing that the caravans are not suitable for off-road driving, the ACCC alleges that Jayco has engaged in misleading or deceptive conduct and made false or misleading representations liable to mislead the public.

Current status of the claims

While Ateco has acknowledged the legal proceedings initiated by the ACCC and filed their concise statement in reply, neither Ateco nor Jayco have released public statements addressing the matters, or announced their intention to halt advertising and/or distribution of relevant model vehicles. Despite this, we assume that they will initially vigorously defend the claims.

What does this mean for your business? 

These two recent proceedings demonstrate the ACCC’s ongoing interest in misleading advertising in the automotive industry, but there are broader lessons available. Businesses should consider the following:

1. Are any promotional claims accurate and able to be substantiated? Businesses should ensure their products are capable of fulfilling claims made in promotional material, and that there is no distinction between the way the vehicles are advertised (including through the use of images) and the actual capacity and features of the vehicles.
2. Are product claims clear to the consumer? Businesses should ensure there is no scope for misinterpretation of claims made within promotional material to consumers. This will assist in managing consumers’ expectations when purchasing a product.
3. Who is the audience? Businesses should consider the perspective and knowledge of their targeted audience, and use clear and precise language to ensure consumers' understanding of the product's capacity, so as not to give rise to conflicting interpretations.