Signature Security Group Pty Ltd, a provider of home/business security services, will stop advertising their prices on a Goods and Services Tax -exclusive basis and will carry out corrective measures after an ACCC investigation, Acting ACCC Chairman, Mr Rod Shogren, said today.
Signature Security Group Pty Ltd provides security monitoring services throughout Australia. It promotes its services via advertisements in the print and broadcast media and through advertisements in the Yellow Pages and on the Yellow Pages Internet website.
The ACCC received a complaint that an advertisement for Signature Security Group broadcast on a Melbourne radio station referred to a price of '$295 plus GST' for services provided. The ACCC was concerned that consumers may have been misled about the service's price. As outlined in the ACCC's Price Exploitation and the New Tax System guidelines issued in March 2000, businesses should advertise on a GST-inclusive basis to ensure consumers are not misled.
Signature Security Group has offered court-enforceable undertakings to:
- cease any advertisements currently being run in the broadcast and print media stating GST-exclusive prices and ensure future advertising does not state GST-exclusive prices
- not renew the current Yellow Pages advertisement which refers to a GST-exclusive price and ensure that future Yellow Pages advertisements do not state GST-exclusive prices
- modify current price displays and cut sheets to clearly state the GST-inclusive price of the product and/or service and ensure that future price displays do not state GST-exclusive prices
- implement a trade practices compliance program.
The ACCC acknowledges that Signature Security Group responded positively to concerns and has undertaken to comprehensively review, and where appropriate, alter its advertising to ensure that prices are stated as GST-inclusive. To this end, Signature Security Group acted quickly to have its advertisement run through the Yellow Pages on-line service amended to not contain GST-exclusive prices.
The ACCC has had discussions with the Pacific Access, the producer the Yellow Pages directories, over the need for printed advertisements to comply with the Act. The company has agreed to amend its advertising rules and provide additional information and advice to its sales staff to help avoid future problems in this area. The ACCC would like to see all publishers taking a stronger role in vetting advertisements placed with them to ensure prices are quoted on a GST-inclusive basis.
Businesses should ensure that advertising of goods and services states the GST-inclusive price. In particular, businesses should pay attention to advertisements using Yellow Pages print and on-line services and seek to amend any advertisements containing GST-exclusive prices. Further, businesses should be aware that GST-inclusive pricing requirements are applicable to goods advertised which are ultimately purchased under a contract. The fact that the GST component is shown in the contract for sale of goods or services does not alleviate the need for initial advertising to clearly state the GST-inclusive price of the good or service.
"The ACCC expects that six months after the introduction of the GST, all businesses should have taken steps to ensure that their advertised prices are GST-inclusive. The ACCC believes there is a real risk of consumers being misled if GST-inclusive prices are not quoted in advertisements".