Recent Federal Court orders will prevent Z-Tek Computer Pty Ltd from advertising the ex-tax price of computer products without also advising consumers of the tax inclusive price.
The orders are the result of the Australian Competition and Consumer Commissions legal proceedings begun in the Federal Court, Melbourne, earlier this year.
The ACCC action followed Z-Tek's extensive advertising in the February, March and April editions of a national computer magazine which listed the prices of computer products without the sales tax payable. The tax ranged from 19.8% to 22%. This practice was followed in more than 100 instances in the three issues.
The ACCC alleged that by advertising the ex-tax price of these products without providing a full cash price which included the sales tax, Z-Tek was in breach of the Trade Practices Act 1974. The ACCC believes the advertising in question may have misled consumers by as much as $1,245 simply because Z-Tek had failed to advise consumers of the tax inclusive price.
While in some cases, the advertising included disclaimers which advised that sale tax was excluded, the ACCC alleged that these disclaimers were too small, lacking in prominence and still failed to advise consumers of the total price.
The Court orders, to which Z-Tek consented, also require Z-Tek to place corrective advertising in the national computer magazine in question, the computer liftout section of the Australian newspaper, and on its Internet home page.
ACCC Chairman, Professor Allan Fels, said today the orders reinforced to advertisers that where they advertise part of a price, they must also provide consumers with clear and prominent advice of the full cash price.
"Z-Tek has also consented to orders which require it to develop a trade practices compliance program which will assist it in avoiding this type of advertising in the future. The ACCC recommends that all companies, no matter what their size, should look seriously at developing similar programs to minimise their risk of breaching the Act."
Further information Professor Allan Fels, Chairman, (02) 6264 2829 or pager (016) 373 536 Ms Lin Enright, Director, Public Relations, (02) 6264 2808
The orders are the result of the Australian Competition and Consumer Commissions legal proceedings begun in the Federal Court, Melbourne, earlier this year.
The ACCC action followed Z-Tek's extensive advertising in the February, March and April editions of a national computer magazine which listed the prices of computer products without the sales tax payable. The tax ranged from 19.8% to 22%. This practice was followed in more than 100 instances in the three issues.
The ACCC alleged that by advertising the ex-tax price of these products without providing a full cash price which included the sales tax, Z-Tek was in breach of the Trade Practices Act 1974. The ACCC believes the advertising in question may have misled consumers by as much as $1,245 simply because Z-Tek had failed to advise consumers of the tax inclusive price.
While in some cases, the advertising included disclaimers which advised that sale tax was excluded, the ACCC alleged that these disclaimers were too small, lacking in prominence and still failed to advise consumers of the total price.
The Court orders, to which Z-Tek consented, also require Z-Tek to place corrective advertising in the national computer magazine in question, the computer liftout section of the Australian newspaper, and on its Internet home page.
ACCC Chairman, Professor Allan Fels, said today the orders reinforced to advertisers that where they advertise part of a price, they must also provide consumers with clear and prominent advice of the full cash price.
"Z-Tek has also consented to orders which require it to develop a trade practices compliance program which will assist it in avoiding this type of advertising in the future. The ACCC recommends that all companies, no matter what their size, should look seriously at developing similar programs to minimise their risk of breaching the Act."
Further information Professor Allan Fels, Chairman, (02) 6264 2829 or pager (016) 373 536 Ms Lin Enright, Director, Public Relations, (02) 6264 2808