Businesses will be required to specify a prominent single
price for any goods or services advertised, if the business
advertises any amount that would constitutes part of the
Businesses will need to review their advertising under a
proposed new broad ranging law that requires an advertisement
for consumer goods and services must state, prominently, the
"total price", excluding charges relating to postage
and handling, if the advertisement contains any statement about
the price or part of the price payable for the goods or
The reform will apply to all consumer goods and services,
except financial services.
Businesses which will be particularly affected include:
those who sell by volume or time
those who charge contingency fees; or
service providers whose prices are not ascertainable as a
total up front, such as airlines, or sellers who sell to
different places with different delivery charges or state
How will the law change?
If this bill is passed, the Trade Practices Act will
include, for the first time, a requirement for businesses to
specify a prominent single price for any goods or services
advertised, if the business advertises any amount that would
constitute part of the price.
For example if the bill becomes law:
It will not be lawful to advertise an airline ticket as
"$299 plus fees and charges". The total amount
including those fees and charges will have to be stated.
It will not be lawful to advertise goods or services as
"$39 plus GST" - the total GST inclusive price must
It will not be lawful to advertise a new motor vehicle
for sale by lease finance with the claim "from $299 per
month" without there being somewhere a prominent
statement of the total price.
According to the Explanatory Memorandum, stating the total
price in the fine print in an advertisement will not be enough
to comply with the new laws.
The new legislation will require the business to
specify the single figure price "in a prominent
The obligation to state a single price applies to the extent
that the price is quantifiable by the supplier.
Optional extra charges
The obligation on suppliers to state a total price does
not extend to additional amounts payable which
depend on "optional extras" selected by the customer,
such as additional product features, or alternative payment
means which might attract an additional charge eg. by credit
For mobile phone services where a minimum 12 month
commitment is required to be eligible for a stated handset
price, suppliers must state the minimum amount
payable by the consumer over that period of time, even if the
actual amount payable by consumers may well fluctuate in regard
Where, for some goods or services, part of the price is
quantifiable and part is not quantifiable, you must state the
quantifiable amounts if any statements at all about price are
Delivery and handling charges
Postage and handling charges will not need to be stated
provided that they are directly related to postage as well as
the process of packing, moving, carrying or transporting
The Government expects that where delivery is mandatory and
a charge applies, those charges must be stated if they are
quantifiable at the time of the advertisement.
Any applicable stamp duty does not need to be included in a
single price advertised because it is treated as a charge
imposed directly on the consumer.
What should you do?
Although this is still a draft version of the Bill, we think
it is close to the final version - as the Bill has been under
consideration for two years or more, it may be difficult to
seek changes unless a new scenario is put to Treasury which
highlights particular compliance problems.
It is likely the Bill will become law later in 2008. Because
penalties will apply businesses should review advertising
campaigns and sign off procedures to ensure good
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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