The Australian Competition and Consumer Commission has accepted court enforceable undertakings from American Express regarding the advertising of its International Airline Program (IAP) for Platinum Cardmembers.
Since its introduction in 1998 and until its revision in September 2003, American Express's IAP was advertised by American Express as entitling Platinum Cardmembers to purchase a specially negotiated ticket for first or business class air travel on a participating airline and receive a free, complimentary or bonus companion ticket entitling a second person to accompany the cardmember on that trip.
The ACCC received complaints from cardmembers who found that they were able to purchase comparable air travel tickets in the open market at a price that suggested that the companion ticket offer was not free.
While in many cases the purchase of air travel tickets through American Express's IAP resulted in some savings for cardmembers over the price of buying two comparable tickets for air travel from outlets available to the general public, the offer could not in all cases be said to be truly free, bonus or complimentary.
"Businesses need to be careful when they use absolute terms in their advertising", ACCC Chairman, Mr Graeme Samuel, warned. "An offer of free, complimentary or bonus goods or services means exactly that, and businesses need to exercise caution when making absolute claims of this nature".
In response to the ACCC's concerns and complaints by some Platinum Cardmembers, American Express will write to those who may have been misled and offer:
- a refund of up to one year's Platinum Card membership fee or
-
an amount of 10 per cent of the cost of the first fare purchased under the IAP, depending upon individual circumstances.
The ACCC acknowledges American Express's co-operative approach in resolving this matter.
American Express Media Contact: Luisa Megale (02) 9271 2070