Facts
Decision
Comment


Collingwood Football Club recently paid the price for placing a misleading advertisement relating to a membership offer. Fined A$20,400 for its infringements of the pricing provisions of the Consumer Law, Collingwood had failed to state prominently the total minimum price payable for the offer.

Facts

In May 2013, in an attempt to obtain more members, Collingwood placed an advertisement for a membership offer in the Herald Sun and emailed more than 90,000 people. Collingwood offered prospective members a three-game membership and a Collingwood guernsey(1) for "only $20*". Although the fine print of the advertisement referred to a payment plan, nowhere did the offer detail that a total price of A$120 was payable over a six-month period.

Decision

The Australian Competition and Consumer Commission (ACCC) has the power to issue infringement notices without a matter going to court. Section 48 of the Consumer Law requires that in relation to the promotion, supply or possible supply of goods or services, a person making a representation that includes part of the price of goods or services must also specify in a prominent way and as a single figure the total price payable by consumers. In other words, consumers should know in advance the total price payable for goods or services.

Collingwood paid the fine for the infringement, thereby avoiding any further penalty. However, payment of the infringement did not amount to an admission of a breach.

Comment

In this case and others, the ACCC has been proactive in enforcing the pricing provisions of the law in recent years.

In 2012 Foxtel paid seven infringement notices issued by the ACCC totalling A$46,200. The advertisements included a prominent headline that a subscription could be acquired for A$55 a month on a six-month contract. In fact, the fine print locked customers into a 12-month contract with a price increase to A$77 a month for the second six months.

In December 2012 the Federal Court imposed a penalty of A$200,000 on Air Asia. Between March 2011 and January 2012 the company did not display on its website some airfare prices inclusive of all taxes, duties, fees and other charges in a prominent way and as a single figure. In his reasoning, Justice Tracey commented that not only do such actions attract customers to carry out a transaction which, but for the misleading price, they would not have otherwise made, but a company engaging in such practices will also gain an advantage over other competitors who do the right thing.

The high court has also recently given the ACCC leave to appeal a decision in relation to TPG concerning pricing provisions and misleading conduct. In that matter, some TPG advertisements did not prominently specify the single price for the advertised internet and home phone services.

For further information on this topic please contact Bill Fragos at Piper Alderman by telephone (+61 2 9253 9999), fax (+61 2 9253 9900) or email (bfragos@piperalderman.com.au).

Endnotes

(1) The shirt worn by Australian rules football players.