Businesses should review their existing compliance
procedures for advertising sign-off now that the Clarity in Pricing
Bill has been passed.
On 12 November 2008, the clarity in pricing amendments to the
TPA, which were proposed in September last year were passed by the
The new section 53C will commence no later than 25 May 2009. It
will apply to conduct that businesses engage in on or after that
What do the new rules require?
Once implemented, businesses will need to specify the single
figure price of goods or services when making a representation
about price to consumers. While business can continue to use
component pricing, it may only do so if it also prominently states
the single figure or total price for the goods or services (to the
extent that that price is quantifiable at the time the
representation is made). There will be an exception for
representations made exclusively between corporations.
What do businesses need to do now?
Before the new law comes into effect, businesses should review
their existing compliance procedures for advertising sign-off. In
Businesses will need to carefully and constantly monitor the
minimum price of postage, couriers and packaging for goods to
ensure that those costs are incorporated in the single figure price
and are accurately represented. If they do not do so, they may
infringe the new section by having "knowledge" of the
minimum cost of such charges. They may also run the risk of
infringing the other prohibitions of Part V of the TPA by not
accurately representing the price of the goods sold.
Those preparing catalogues will need to ensure that any
advertising / promotional materials display the single figure price
of a product in a way that is at least as prominent as any of the
components of that price.
Businesses will also need to revise their use of fine print
disclaimers which outline mandatory taxes, fees and other charges
which are additional to the cost of the products or services being
supplied, as these costs must now be incorporated in the single
By requiring business to specify a "minimum quantifiable
price" at the time the representation is made, the new law
will increase regulatory scrutiny of pricing and advertising by
Difficulties in determining a "minimum quantifiable
There are likely to be difficulties specifying a single or total
price in certain types of transactions where the "minimum
quantifiable price" cannot be ascertained.
In such cases, businesses may be able to provide an estimate of
the single figure price based on past transactions of like
products, together with an appropriately worded disclaimer which
makes it clear that the single figure price is a "best
estimate" which is subject to change when the other components
of the price become known.
However, the effectiveness of such a disclaimer is likely to
vary on a case-by-case basis. For example, if the quoted single
figure price varies significantly from the actual price paid by
consumer when the other elements of the price are included, then
this kind of disclaimer is not likely to be permissible.
Penalties and remedial orders
The maximum pecuniary penalty for a breach of section 53C is
$1.1 million for a company and $220,000 for an individual.
Injunctions, declarations and damages to recover loss are also
available for breach of section 53C, as are a range of other
As with the other fair trading provisions in the TPA, these
include the making of probation orders lasting up to three years,
community services orders, corrective advertising orders and orders
to implement compliance programs.
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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In some cases these fees or surcharges are higher than what a bank charges to these merchants for use of the system.
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