ACCC Advertising Regulations

Important Notice for all Backpacking Operators

Trade practices amendment (clarity in pricing) act 2008.

Backpacking Queensland would like to notify all members of recent amendments to the Trade Practices Act (1974). The new legislation requires corporations making price representations about consumer goods or services to specify (as far as possible) a single price for acquiring those goods or services.

We have heard reports that the Australian Competition and Consumer Commission (ACCC) may be completing an audit of backpacking operators in mid 2009.

What does the new Trade Practices Amendment (Clarity in Pricing) Act, 2008, mean for the travel industry?

Businesses must not make a component price representation without prominently specifying the single figure price (total price) payable by consumers

• ‘Single figure price’- minimum quantifiable consideration
• Excludes optional charges
• Must be at least as prominent as the most prominent price component

For example:

A ticket price for a boat trip in the Whitsundays:

Price $600 includes all charges.
 
or $555 ticket price + $45 paid locally for a total of $600

NB - If the charge is optional it is not necessary to include it in the single price:

For example:

A ticket price for a four day tour of Cairns and the tropical north:

Price $400 includes all charges*

*Optional extras include: skydive - $200, reef daytrip - $200 all inclusive.

What are some important parts of the original Trade Practices Act, 1974?

The TPA prohibits conduct which is misleading or deceptive or likely to mislead or deceive (s.52).

• Conduct that could lead a person into error
• Applies to all forms of advertising
• Your intention is irrelevant

The TPA prohibits false or misleading representations about price. (s.53[e])

• Price representations should include all mandatory charges in a holiday package E.g. taxes, levies, fees, land content or port charges.
• ‘Only $X’ is misleading, if additional money has to be paid to third party (national park authority, tour operator or equipment hire company).

Potential pitfalls and how to avoid them:

Non-inclusive pricing
The price advertised for a holiday package excludes additional mandatory charges (E.g. fuel, insurance, food, equipment hire or national park fees).

Best Practice: Clearly and prominently state all additional charges.
                          State the total price of the package including all additional mandatory charges.


First Contact Deception
Enticing customers with misrepresentations even if the misrepresentation is later corrected presents an unfair competitive advantage and inconveniences consumers.

Best Practice: Ensure all advertising informs consumers about all additional mandatory charges.
                          Keep advertising up to date.

Two Price Advertising
Was/Now pricing or 50% may be misleading if perceived savings are not real. It may be misleading to compare Recommended Retail Price if no-one sells at the RRP.

Best Practice: Ensure that the previous ‘was’ price was genuine and applicable for a reasonable amount of time.

Fine Print
Fine Print should be used to clarify and not correct

Best Practice: Fine Print should be:
•    Sufficiently clear
•    Prominent in size & appearance
•    In close proximity to the main representation
•    Clearly linked to the price representation
•    Fully addressing the issue being clarified
•    ‘Additional charges may apply’is not sufficient

How can you avoid TPA breaches?

•    Each claim must be correct
•    Overall impression conveyed must match the facts
•    Specify value and content of all mandatory charges
•    Avoid fine print or ensure fine print is prominently placed to dispel any potential misleading impression
•    Use up to date information
•    Trade practices lawyer should check advertising
•    Establish and maintain a trade practices law compliance program
•    Create a complaints handling system.

Disclaimer
BQ has provided the information above for the puroposes of genereal interest and that info should not be relied upon by any person for any purpose and that prior to taking any steps you should seek independent legal advice.