WTH Pty Ltd, trading as Avis Australia, has made changes to its website advertising to ensure that all mandatory fees and charges are included in quoted prices.
Avis operates a website, www.avis.com.au, where customers can book a vehicle. In addition to hiring a vehicle, Avis also offers customers a range of supplementary services including GPS units, child car seats and options to buy insurances that reduce the excess payable by a customer if a vehicle is damaged (optional extras).
On 25 May 2009 amendments to the Trade Practices Act 1974 came into force under section 53C of the Act requiring businesses that use component pricing to also specify a single (total) price for the goods and services, including all mandatory charges quantifiable at that time.
Between 25 May 2009 and 30 October 2009, the reservation pages on the Avis website did not show or include mandatory fees and charges relating to the optional extras that would be added to the customer's bill when picking up the vehicle. These mandatory fees and charges included an administration fee and goods and services tax which were not included in the quote provided to the customer.
ACCC chairman Graeme Samuel said tourists and holidaymakers want to rent a car quickly and simply, so it is essential they are provided with upfront and accurate information so they can make informed decisions.
"Accurate price representations are not just good advertising practice, they are required by law," Mr Samuel said.
In a court enforceable undertaking provided to the ACCC, Avis has acknowledged that its pricing was likely to have contravened the Act by not displaying the full price that would be payable for the selected hire vehicle. Avis will take the following steps to address the ACCC's concerns:
- change its website, so that all mandatory fees and charges are now included in the quoted price
- write to all affected customers and refund the amount of additional fees and taxes paid by the customer, which were not disclosed at the time of making the reservation
- place a corrective notice on its website for a period of four weeks apologising, and
- ensure its senior executives receive practical trade practices law training.
"The car rental industry attracts a large number of complaints and this case should serve as a warning to the rest of the industry that the ACCC expects compliance with the law," Mr Samuel said.
A copy of the undertaking will be available on the ACCC's website.
The ACCC's new guidelines, Fair trading in the rental car sector are now available on the website.