Flight Centre Limited will stop using its 'Lowest Airfares Guaranteed' slogan for five years after Australian Competition and Consumer Commission concerns.
The ACCC has accepted court-enforceable undertakings from Flight Centre, one of Australia's largest travel agencies, which also includes extensive corrective advertising.
Flight Centre provided the undertaking to the ACCC, without admissions, after the ACCC investigated the slogan claims.
"The ACCC believed the slogan indicated to customers that Flight Centre's airfares were guaranteed to be the lowest available, when this was not always so", ACCC Chairman, Mr Graeme Samuel said. "The ACCC received a number of customer complaints and considered the results of its own limited airfares survey comparing prices from Flight Centre and competing agencies".
In response, Flight Centre agreed to stop using the slogan for five years in all its marketing material, including its newspaper and television advertisements, its website and in-store advertisements.
It acknowledged in the undertaking that some consumers may have misunderstood the meaning of the slogan.
The ACCC also raised concerns with Flight Centre about a claim that it used its 'Global Buying Power' to get better deals on airfares than the deals generally available to other travel agents. The ACCC was concerned that Flight Centre does not in fact have such power as it does not generally buy airfares in bulk, but rather books airfares for customers on an individual basis.
Flight Centre will not use the 'Global Buying Power' representation in the future without giving prior notice to the ACCC. The notice will allow the ACCC to investigate if the claim is in fact accurate before it is used by Flight Centre.
Flight Centre agreed to a number of corrective steps aimed at ensuring that its customers are disabused of any misunderstanding about the meaning of either the 'Lowest Airfares Guaranteed' slogan or 'Global Buying Power' representation. It will:
- publish a total of 44 corrective notices in 11 major newspapers, including The Daily Telegraph, Sydney Morning Herald and The Australian, to be run over four weeks, and
- display A-3 sized corrective notices in the front window of each of its 500 plus retail outlets continuously for four weeks.
"The ACCC had serious concerns that customers may have been misled by Flight Centre's slogan which may have led them to decide not to 'shop around' for lower prices from competing agencies", Mr Samuel said. "Companies must ensure
that their advertising slogans and other claims are accurate and not liable to be misunderstood by their customers.
"A claim that a trader guarantees to offer the lowest price in a market for a particular good or service is a very powerful device. However with such claims comes a heavy responsibility as traders must ensure that they can honour their guarantee in every case.
"The ACCC will be keeping a close eye on the travel industry and its advertising practices. The industry should be aware that the ACCC will not tolerate misleading advertising practices".