ACCC to crackdown on use of fine print in advertising

The Australian Competition and Consumer Commission has sent a warning that it will crackdown on companies that try to hide additional charges in the fine print of advertising.

New “clarity in pricing” amendments to the Trade Practices Act take effect from 25 May. Under the new rules, businesses that try to advertise part of the price of their product and service must also prominently display the total price of the item.

The change will hit a number of common forms of advertising:

• Car companies will no longer be able to promote a price as being “plus on-road costs”. Instead, they’ll need to display the total price of the vehicle, including those additional costs.
• A company that sells tickets to an event for $xx but does not prominently show that there is also an additional booking fee.
• Restaurants that add a surcharge on public holidays.
• Travel agents who advertise holiday packages but only show part of the total price, such as “holiday package from $xxx plus flights and transfers”.
• Companies that advertise an item as being available for “six easy payments of $xx” and then bury the total price in the fine print.
• Car rental companies that offer a vehicle from $xx a day, but then charge a surcharge for each kilometre driven.

ACCC chairman Graeme Samuel, who launched new guidelines on the changes yesterday, says the rules do not outlaw the use of component pricing, but instead require the total price to be displayed as prominently as the price of any one component.

“The new law will not only mean consumers have accurate price information, but also that businesses have a more level playing field on which to compete when it comes to price representations.”