Information to help business and consumers to understand the 'Clarity in pricing' amendments to the Trade Practices Act 1974 has been issued by the Australian Competition and Consumer Commission.
The amendments, which take effect on 25 May, require if businesses choose to advertise a part of the price of a particular product or service, they must also provide a single figure that reflects the total price to be paid.
This does not mean that businesses cannot show the various components that make up that price, but does mean that if they do, they must also show, in a prominent way, the total price to be paid.
"The new law will not only mean consumers have accurate price information, but also that businesses have a more level playing field on which to compete when it comes to price representations," ACCC Chairman, Mr Graeme Samuel, said today.
"Under the current law a business that does the right thing by consumers and shows the total price they can expect to pay, may be disadvantaged if a competitor elects to feature only one part of the total price, along with a disclaimer or advice that other amounts (like statutory charges) will also be imposed. That will not be the case after 25 May."
The ACCC has developed guidance material specifically for the motor vehicle and tourism sectors, which frequently use component pricing in advertising. These publications also remind businesses of their broader obligations under the Act.
It will no longer be sufficient for example, for a motor vehicle advertisement to show the price of the vehicle 'plus on-road costs'.
Similarly, if a travel agent is advertising a package holiday and wants to show what each part of the package costs - for example, airfares, accommodation and taxes and charges - it can still do so, but must also show the total of those costs in a way that is at least as prominent as any of the component amounts shown.
In addition to its industry-specific material, the ACCC has produced a general guide, News for business - component price advertising, to explain the new provision and its application across all industries.
The consumer pages on the ACCC's website also contain new information to explain the changes, and what consumers can now expect to see in advertisements.
The business guidance is now available on the ACCC's website and will be available in hard copy from 18 May.