The Australian Electoral Commission (AEC) has found placards falsely depicting independent candidates David Pocock and Zali Steggall as members of the Greens political party are in breach of the Commonwealth's Electoral Act.
Conservative lobby group Advance Australia authorised the signs, which have appeared as roadside corflutes and on trucks parked near pre-poll voting centres.
Mr Pocock lodged a formal complaint with the AEC last month, when signs — featuring him opening his shirt in a "Superman pose" to reveal a T-shirt with a Greens logo — started popping up across Canberra.
At the time, the AEC said its preliminary view was that the corflutes did not breach political advertising laws.
Now, the AEC has said the signs — which were also used against Ms Steggall in the Sydney electorate of Warringah — were misleading and should not be displayed.
"The signage contains no other images or phrases that correct the representation made by the images," the AEC outlined in a statement.
"It is an offence to publish, permit or authorise to be published during the relevant period … any matter or thing that is likely to mislead or deceive an elector in relation to the casting of a vote."
The AEC said Advance Australia did not agree with the finding, but had agreed not to display the signage to avoid bringing on legal proceedings.
In a statement on its Facebook page, Advance Australia called the AEC's decision an "unprecedented backflip".
"Three weeks ago, at the beginning of the campaign, the AEC said publicly the ads were fine and now all of a sudden they're not," Advance Australia's executive director Matthew Sheahan said.
"This backflip by the AEC and its bullying and heavy handed behaviour should be of serious concern to all Australians."
AEC spokesman Evan Ekin-Smyth said while the independent body initially formed the preliminary view that the ads were allowed under the Act, in the time since, the signage had increased in frequency and the election campaign was now in its final stages.
"So it's all of those factors that have really tipped our view into thinking [the signage does] breach section 329 of the Electoral Act."
Mr Ekin-Smyth said that, if the AEC thought there had been a "cumulative effect" of confusion caused by the signage during the campaign or if the ads were suspected of having impacted the results, "then it might be something that a court examines after the event".
"[Pursuing legal proceedings] is something that we're looking at and we'll have something further to say about that quite soon," he said.
Advance Australia 'should be prosecuted'
Mr Pocock said he was disappointed the decision was not made sooner.
"I would have loved this three weeks ago when we lodged our initial complaint," he said.
"[These signs] were clearly designed to mislead and we should have laws in place that stop these sorts of things happening. We've got them here in the ACT and we've got them in South Australia, and they work well."
Mr Pocock said he had received hundreds of emails, calls and messages from people across the ACT who were outraged and confused by the advertising.
He said he had written to the AEC, requesting Advance Australia be prosecuted for the breach.
"This is something we can clean up, we just need the political will to do it."
In a statement, Ms Steggall said she welcomed the AEC's ruling, but said "the damage has been done all over Warringah".
"It only seems fair that Advance Australia issue a retraction and send a retraction to the electorate to set things right," she said.
