Big City Promotions, a promoter of holiday accommodation vouchers Australia wide, has provided the Australian Competition and Consumer Commission with a court enforceable undertaking to resolve concerns about the company's $33 per person/per night accommodation promotion.
The ACCC was concerned the promotion was misleading and also did not comply with the all inclusive pricing provisions of the Trade Practices Act 1974.
Between July 2009 and July 2010, Big City Promotions sent one page advertisements promoting holiday accommodation by facsimile to a large number of businesses. The advertisements promoted holiday accommodation on a twin share basis at the cost of $33.00 per person/per night at a number of hotels in Australia, New Zealand, Bali, Thailand, Europe, USA, Hong Kong, Egypt, India and Fiji.
The ACCC was concerned that Big City Promotions had breached the Act by failing to disclose in the advertisements that in order to purchase accommodation at $33 per person/per night consumers were also required to:
- attend a resort sales presentation when staying at the accommodation, and
- pay a $99.00 booking fee.
Additionally, the ACCC was concerned that Big City Promotions had contravened section 53C of the Act as the advertisement failed to state a single price payable by consumers for the advertised accommodation, by advertising an accommodation price of $33 per person/per night, when the total price for that accommodation, including the $99 booking fee, was $297.
Section 53C of the Act requires that corporations must prominently specify a single price for their goods or services, including all taxes, duties, fees and other mandatory charges that are quantifiable at the time of making a representation about the price payable for those goods or services.
Big City Promotions has agreed to ensure that all future advertisements include:
- a single price payable by consumers, including any fees, and
- prominent disclosure of any conditions required to be met by a consumer to qualify for the advertised price.
Big City Promotions has also undertaken to send a corrective notice to all its customers offering a refund of the purchase price to those customers who were misled by Big City Promotions' conduct, and will implement a trade practices law compliance program.
The ACCC has conducted a significant education program across various industries to explain the single price requirements.
"The component pricing laws have been in place for more than 12 months. Businesses that do not comply with the requirement to prominently specify a single price for their goods or services risk enforcement action being taken against them by the ACCC," ACCC chairman Graeme Samuel said today.
The ACCC may take court action and seek civil penalties or issue an infringement notice.
The Australian Consumer Law gives the ACCC the ability to issue infringement notices in cases involving unconscionable conduct, some false or misleading conduct, pyramid selling and various product safety provisions. Penalties under Infringement notice provisions for false or misleading conduct are $6,600 for corporations and $1,320 for individuals.