ADAM STEPHEN:
If you’ve signed up to a free trial, then you might have actually found the experience quite difficult to unwind yourself. You know those free trials, they start out free and then you might notice when you’re going through your bank account one day, I don’t remember. What is that payment for? I don’t remember what that payment’s for. You might query it with the bank and they say, oh, it’s for this streaming service. And you go, that’s right. I signed up to a free trial ages ago and I forgot to get off before the payment started.
But sometimes it’s not so easy as just hitting a cancel button and getting out of your subscription. And that isn’t the only uneasy practice that’s been weighing heavily on the mind of the federal government, which says it’s going to crack down on dodgy payment practices that are being used not exclusively for online shopping, but largely for things that we’re purchasing online. I had a chat to Stephen Jones, Assistant Treasurer and Minister for Financial Services.
STEPHEN JONES:
There’s a couple of different tactics. Subscription traps, you know when you get a trial period streaming service or product and you get the sneaky renewals, there’s never a notification of it. Really, really easy to sign up, almost impossible to unsubscribe or to get out. That’s called a subscription trap, used in a lot of different business models. We want to ensure that we change the law so that the sneaky practices are banned. And it is easy, is as easy to unsubscribe to get out of the service as it is to sign up in the first place. So, that’s one.
The second one is what we call drip pricing or dodgy fees. That’s when you see an advertised price, maybe for a flight or a hotel booking, and you go online to purchase it. And halfway through the purchase, maybe you’ve already added in your credit card details, new fees get added to it. They’re always known. It might be landing fees or it might be taxes or it might be other things. They just keep adding different fees and charges, booking fees, all of this sort of stuff to it. It’s dodgy, it’s deceptive, we want to ban it.
And the third one is what we call dynamic pricing. So, you have an advertised price, you go online to buy a ticket to a concert or a sporting contest, and meanwhile, halfway through the transaction, the price keeps moving and it goes up and up and up, never goes down. That’s called dynamic pricing and it’s deceptive and it’s misleading. And it’s another thing that we want to take on with a focus on these things, but also broad prohibition on what we call unfair, dodgy marketing practices.
STEPHEN:
How fierce do you think the resistance will be to the proposed ban? You are putting them out to consultation. You’re talking about flights, hotels. You’ve got some of the major, probably companies in Australia that are using these practices.
JONES:
Yeah. So, very confident that we’ll have in place effective laws and we’ll bring legislation into the parliament next year – in the first half of next year, the businesses who have got the most to gain from this are the businesses who are doing the right thing by their customers and competing against the businesses that aren’t. So, it’s not a level playing field. All these multinational digital platforms that you talk about, they’re already bound by similar laws in other countries. We’ve got similar laws in operation in the United Kingdom, in Europe, in the United States and Japan, but not in Australia. And what we’re doing, what this government is doing, is ensuring that we bring consumer law into the 21st century, ensure that it’s fit for purpose in a digital age.
Another one we’re looking at – can you imagine if you went into a shop and you wanted to buy a pair of jeans, and before you were able to buy a pair of jeans, you had to open an account with that store that gave your name and your home address and your phone number and your credit card details? You had to sign up with the store before you were able to buy a pair of jeans. You’d walk out and you’d go into another one. But that’s exactly what so many of these online marketplaces are requiring you to do, to sign up to an account, and then they use that information for their own purposes, not yours. It’s misleading, it’s deceptive, it’s unfair, but it’s also dangerous because they’re collecting that information and you don’t know what they’re doing with it.
STEPHEN:
It’s the same example for dynamic pricing. You could imagine if you went into a store and you had a pair of jeans in your hand and by the time you picked them up and went to the counter, that increased by 20 per cent all of a sudden because they were popular. It doesn’t make sense when you think about it in physical terms. Yet we’ve – they’ve prepped in all these practices, you say they’re issues around the world. The US refers to drip pricing as junk fees. The White House has referred to them as junk fees. And with the changes, what could we expect in a different online environment? What should be just standard practice when it comes to buying tickets for a concert or flights or a hotel?
JONES:
There’ll be fair fees, fair pricing, transparent – none of these dodgy sorts of practices that are tricking consumers into spending more than they need to or staying with the service longer than they want to. These are not fair trading practices. They operate in other countries around the world. They’re going to operate in Australia. The laws of Australia can’t stop at the internet.
STEPHEN:
That was the Assistant Treasurer, Stephen Jones.