The Islander's Board of Industry and Service has offered communities in the Torres Strait Islands refunds and a one-month 5 per cent discount period on all items at its grocery stores for GST-related pricing mistakes.
After discussions with IBIS, the Australian Competition and Consumer Commission formed the view that IBIS had increased some of its prices more than it should have and were at risk of breaching the price exploitation provisions of the Trade Practices Act 1974.
IBIS immediately acknowledged these concerns and has agreed to fix the problem by providing the ACCC with court-enforceable undertakings.
"This is a good outcome for consumers on the Torres Strait Islands because they can be compensated for the over-charging and assured that they will receive the full benefits of tax savings", Acting ACCC Chairman, Mr Allan Asher, said today.
"It also demonstrates that the ACCC has a presence across Australia and is committed to protecting consumers located in large cities as well as rural and remote communities".
In July this year IBIS adjusted its prices in its stores to allow for the implementation of the GST. By mistake, price adjustments of certain items increased by greater than they should have by up to 22% including on items that are GST-free.
IBIS have taken the positive approach of placing notices in all of its stores apologising for the mistakes, making consumers aware of the refunds and discounts and assuring its customers that it is making all efforts to make proper price adjustments.
The undertakings also include an agreement to institute a trade practices compliance program to ensure that future conduct of IBIS is less likely to contravene the Act.
"The ACCC encourages other businesses to act as IBIS did in this matter. In providing the undertakings to the ACCC, IBIS has ensured that the situation will be remedied and consumers compensated.
"Businesses that act positively and effectively to address such issues have nothing to fear from the ACCC.
"However, where businesses wait to be approached by the ACCC or do not rectify a situation quickly, the ACCC will not hesitate to take whatever action is necessary to ensure that consumers obtain refunds".