Clarity In Pricing: Ad Shonks To Get Slapped

bigrebatesThere's few things more annoying than seeing what looks like a good deal advertised, only to find the total cost is much higher. From the end of May, that should be less common as new changes to Australian law make it illegal to promote "component prices" without also making the total cost clear.

From 25 May, new "clarity in pricing" rules will come into effect as part of the Trade Practices Act. The big switch is that advertisements will no longer be able to emphasise a component of the overall price of goods or services without also making it very clear what the total cost is. So, for instance, a tour operator could not just advertise a $500 air fare if the only way to obtain that was also to purchase a $1,000 accommodation package. The total cost of $1,500 would need to be included prominently.

The individual components which make up a price can be included in advertisements and marketing materials, but the total price involved must also feature (and not be relegated to small print).

According to the Australian Competition and Consumer Commission, which administers the act, this should be beneficial to both businesses and consumers.

"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," ACCC chairman Graeme Samuel said in a statement announcing the forthcoming changes.

"Under the current law a business that does the right thing by consumers and shows the total price they can expect to pay, may be disadvantaged if a competitor elects to feature only one part of the total price, along with a disclaimer or advice that other amounts (like statutory charges) will also be imposed. That will not be the case after 25 May."

Specific guidelines have been developed for the motor industry and travel industries, which often sell goods which have a complex total price made up of several components. This will mean, amongst other things, that car dealers can no longer use the catch-all "plus on-road costs" when advertising vehicles.

Of course, the changed regulations don't mean that you should ever part with your cash without carefully double-checking what you're getting for your money. But they should cut down on potentially deceptive promotions, making it easier to identify real bargains when they do appear.

Clear pricing [ACCC]

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Comments

    I'd love to see businesses like Melbourne Airport required to include the price-gouging of parking in their departure charges -- it can add substantially to the price of an air ticket, being that it's their primary source of income.

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