01/04/2011

In a recent media release the ACCC said that it recently reviewed the advertised pricing by various airlines and whether they conformed to the requirements under the Competition and Consumer Act 2010 (formerly Trade Practices Act 1974) in showing a single price or component pricing including the known taxes, duties and fees.

Section 48 of the Australian Consumer Law which is a schedule to the Act, creates obligations on sellers to consumers in regard to component pricing and single price.  The section can be summarised as follows:

• A supplier must not specify a part of the price of the goods unless it also specifies, in a prominent way and as a single figure, the single total price.
• The single price must be at least as prominent as the most prominent part of the advertised component price.
• The single price is the minimum quantifiable price for the goods at the time of the representation, including any quantifiable charges, taxes, duties or levies.

What “prominent display” means will depend on the advertisement as a whole and would include consideration of the font size, placement and colour compared to the whole advertisement.

This should deal with the “fine print” and “*” at the very bottom of advertisements which states “price excludes other charges”.

The focus of the Australian Consumer Law is to assist and protect consumers in their dealings with suppliers to ensure informed decisions can be made prior to committing to a purchase.

Examples given by the Act are that a Passenger Movement Charge may be covered by a “quantifiable charge” and therefore should be stated as part of the single price of an airline ticket.  However, an option to purchase fabric protection with a lounge may not be part of the single price as it is a charge payable at the option of the consumer.

Charges for freight may or may not be part of the single price as the charges may not be known at the time of the representation so the consumer should always check if any additional charges may be incurred.

Next time you are reading an advertisement for a holiday, ensure the single price or all components are prominently displayed.

If you have any questions in regard to this article, please contact TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.