The Australian Competition and Consumer Commission has obtained, by consent orders, a Federal Court declaration that A Whistle and Co (1979) Pty Ltd*, trading as Electrodry Carpet Dry Cleaning, breached the Trade Practices Act 1974 by distributing brochures with Goods and Service Tax-exclusive prices.
The brochures, which displayed the GST-exclusive price on the front page in large type and the total price in much smaller print, were the subject of numerous complaints from consumers to the ACCC. Also coupons at the back of the brochure included large-type GST-free prices accompanied by very small type GST-inclusive prices.
Delivered to household letterboxes, the brochures were the primary means by which Electrodry promoted its business in New South Wales, Victoria, Queensland, South Australia and Western Australia.
The ACCC attempted to resolve the matter administratively by requesting Electrodry to cease distribution of the brochure and amend future advertising material, but was unsuccessful. Proceedings were instituted in the Federal Court on 18 August 2000 under the misrepresentation and misleading and deceptive conduct provisions of the Act.
The outcomes of the proceedings included:
- declarations that Electrodry had breached sections 52 and 53(e) of the Trade Practices Act, relating to misrepresentation and false and misleading conduct;
- corrective advertising in the form of an apology on the front page of Electrodry’s next brochure;
- injunctions preventing Electrodry from engaging in similar conduct in the future; and
- an injunction directing Electrodry to conduct a trade practices compliance program designed to prevent repetition of this or similar conduct.
"Misleading price displays give rise to concerns not only in relation to consumer detriment but also in respect of potential detriment to competitors who are abiding by both the letter and spirit of the law", ACCC Chairman, Professor Allan Fels, said today.
The provisions of the price exploitation guidelines, issued by the ACCC under the Act, require that prices displayed to end-user consumers should be GST-inclusive. Where businesses chose to display the components of a price separately, such as the
GST-exclusive price and the GST amount, those components should not be given greater prominence than the total price. Consumers are entitled to know the total price payable, and be able to accurately compare prices between competitors, before making a decision to purchase goods or services.
"Businesses should be aware of the price exploitation guidelines and other material issued by the ACCC concerning price displays and take care that their advertisements do not mislead consumers as to the total price payable", Professor Fels said. "The ACCC will continue to monitor advertising relating to GST prices in all industry sectors where goods and services are supplied to end-users to ensure that consumers are not misled".
Consumers who have concerns about such misleading advertising should contact the ACCC Price Exploitation Hotline on 1300 302 502.
*A Whistle & Co (1979) Pty Ltd t/as Electrodry Carpet Dry Cleaning does not include Wallera Pty Limited t/as Electrodry which operates in the Sydney metropolitan area and was not involved in the advertising campaign the subject of these court proceedings.