An Australian Competition and Consumer Commission investigation into Goods and Services Tax representations has resulted in Melbourne and Sydney-based Zoeros Lifeskills Training providing a court-enforceable undertaking to the ACCC.
In October this year, Zoeros Lifeskills Training claimed that in February 2000, the price of its 'Turning Point' lifeskills course would rise from $395 to $495 as a result of the GST.
"These claims were likely to mislead consumers about the true effect of the GST and the New Tax System changes, ACCC Chairman, Professor Allan Fels, said today.
"The ACCC is of the view that when the New Tax System takes effect on 1 July 2000 the abolition of wholesale sales tax and other input cost savings will result in increases in the price of goods and services of less than 10 per cent. Moreover, educational courses may not be affected at all.
"Zoeros admitted that the claims made about the price of its training course were made in error and likely to breach the Trade Practices Act 1974. It also agreed that its courses are unlikely to rise by more than 10 per cent as a result of the introduction of the GST", Professor Fels said.
Zoeros has provided court enforceable undertakings to the ACCC to:
not make representations about the GST where it does not have reasonable grounds for doing so; write to any affected customers to whom the representation has been made; and implement a trade practices training program to ensure staff are fully aware of their legal responsibilities under the Trade Practices Act.
Professor Fels said that the undertaking reflects the ACCC's position concerning representations about the effect of the GST.
"Businesses have to take proper steps to ensure the claims they make in advertising are correct and that the facts back them up.
"The ACCC will be vigilant in the transition to the New Tax System and will make sure consumers are not exploited or misled by business.
"The ACCC has welcomed the undertakings provided by Zoeros as a positive and timely way to resolve this matter. The ACCC encourages all businesses to make sure that where a problem is identified, remedial steps, such as those taken by Zoeros, are undertaken without delay.
More information about the ACCC's role in the New Tax System and the GST can be found in the ACCC publication Pricing Claims and the New Tax System or on the ACCC's website: www.accc.gov.au. Also, the GST Hotline (1300 302 502) lets consumers alert the ACCC about any unjustified price increases and provides information to business about the law prohibiting price exploitation.