The Minister for Competition Policy and Consumer Affairs, Chris Bowen MP, today welcomed the commencement of clarity in pricing provisions in the Trade Practices Act 1974 (the TPA).
Amendments to section 53C of the TPA were passed by the Parliament in November 2008; however businesses have been given a six month transition period to adjust their advertising and sales practices where necessary.
"For too long consumers have been duped by advertisements that cover only part of the price or the component price and don't reflect the actual price that is paid for the good or service," Mr Bowen said.
"Consumers should be made aware of the total costs of goods or services as early as practical in making a decision whether to purchase them or not.
"It is not appropriate for businesses to draw consumers into purchases on the basis of price claims that do not relate to the actual price that consumers would have to pay to acquire the good or service."
From Monday 25 May 2009, where a business makes a representation to consumers about the partial price of a good or service, the total price must also be prominently displayed, as a single figure, to the extent that it is quantifiable.
"Importantly, the provisions take the guessing game out of calculating a single price for the consumer. For businesses if it is not quantifiable at the time the price representation is made, then those costs need not be included in the single, total price."
The TPA does not prohibit component pricing, provided that a single figure total price is also specified prominently. The TPA also contains a limited number of exceptions, to ensure that it can be implemented effectively by businesses.
Guidance for businesses on complying with the revised provisions along with information for consumers is available on the Australian Competition and Consumer Commission's website at www.accc.gov.au.
22 May 2009
The Trade Practices Amendment (Clarity in Pricing) Act 2008 received the Royal Assent on 25 November 2008. The Act amends section 53C of the Trade Practices Act 1974.
- The Act replaces the previous concept of 'cash price' with 'single price'.
The Act requires that, where a business makes a representation to consumers (including in advertising) about the partial prices of goods or services, it must also disclose the total price, as a single figure, to the extent that it is quantifiable at the time of the representation. The total price must be displayed at least as prominently as the most prominent of any partial price representation.
The are some exceptions from the single price or prominence requirements in respect of:
- genuine postage and handling charges;
- representations made exclusively between businesses;
- financial services; and
- certain contracts for services that provide for periodic payments over the term of the contract.