The Competition & Consumer Act 2010 took effect on 1 January 2011.

It replaced the Trade Practices Act 1974 (TPA) and all state fair trading legislation to create one unified trade and consumer law regime.

Schedule 2 of the Act contains the Australian Consumer Law (ACL) – which includes provisions on unfair contract terms, consumer guarantees and pricing clarity which should be taken into account when selling tickets and making price representations.

Pricing Clarity

Component pricing

When a price of a ticket is advertised, displayed or provided to a consumer, a single total price should be displayed or provided.  Component pricing occurs in our industry where a business displays or provides the cost of a ticket to consumers in, or as the sum of, multiple component parts. Therefore if you choose to use component pricing (such as in advertisements, season brochures and ticketing websites) you must also:

a)      provide consumers with a single total price for the goods, and

b)      state that single price in a prominent way

That single price must include all:

• charges of any description payable by a consumer to purchase the ticket, such as:
  • administration fees
  • compulsory services charges
  • booking fees
  • taxes, duties, fees, levies or charges payable by the consumer for the supply of ticket, such as goods and services tax.

Variable delivery charges do not need to be included in the single price, but if there is a minimum delivery charge, you should either include it within the single price or specify it at the same time as disclosing the single price.

What is meant by prominent?

The single price you are advertising must be clear, easily seen by the consumer and at least as prominent as the most prominent component of the price.   Factors that are relevant in determining whether a single price is prominent include the size, placement, colour and font of the text the price appears in as compared to the background of the advertisement.

Drip pricing

Drip pricing has most commonly been used in online sales.  It is similar to component pricing in that a headline price is usually advertised and then additional fees and charges are added (which may or may not be unavoidable) throughout the transaction.  Drip pricing may amount to misleading and deceptive conduct, which is prohibited by the ACL.

The ACCC is currently focusing on drip pricing.  In June 2014, for instance, it commenced action against Jetstar and Virgin for failing to sufficiently disclose credit card fees at the beginning of each transaction.

Therefore you should ensure that any additional fees and charges that may be imposed on consumers are clearly disclosed at the beginning of each transaction.

On 23 October 2014, the ACCC released a Media Statement on the results of their recent investigation into drip pricing in cooperation with Ticketek and Ticketmaster. The ACCC Statement outlines recent improvements made by both ticketing companies to their booking procedures that has resulted in clearer ticket pricing.

LPA appreciates that upfront pricing clarity is difficult when fees and charges are applied to the whole ticket order, not each individual ticket. However, the ACCC is actively monitoring industry practice in this area and efforts should be made to declare all possible fees and charges at the same time as any initial price representation is made.

Unfair Contract Terms

The terms and conditions of sale for events are a consumer contract. If a contract term in a consumer contract is found to be “unfair”, the term (but not the whole contract, provided that the contract can continue to operate without the unfair term) will be void.

A contract term is unfair if it:

• would cause a significant imbalance in the parties’ rights or obligations arising under the contract; and
• is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
• would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied upon.

In determining whether a particular term is unfair, the contract as a whole and the transparency of that particular term will be relevant.  A term is transparent if it is in reasonably plain language, legible, clearly presented and readily available to the consumer.

An example of an unfair contract term might include the unilateral right of a presenter or ticket seller to change the terms and conditions of sale for an event without notice to the consumer.

Members are encouraged to review their terms and conditions of sale for terms which may be considered unfair. 

Costs of Non Compliance

The ACCC, state and territory consumer protection agencies and any other individual or group can take legal action against businesses for contraventions of the ACL.

The ACCC’s enforcement powers are extensive—for some contraventions it can seek remedies such as:

• criminal or civil pecuniary penalties up to $1.1 million for companies and $220,000 for individuals
• infringement notice penalties of up to $102,000 for publicly listed companies, $10,200 for corporations and up to $2,040 for individuals
• disqualification orders (e.g. prohibiting  a person from managing a company)
• injunctions to prevent ongoing conduct, and
• corrective advertising orders.

In determining whether to take action, the ACCC gives enforcement priority to matters that demonstrate one or more of a range of factors such as whether the conduct is:

• of significant public interest or concern
• causing substantial consumer (including small business) detriment
• unconscionable conduct, particularly involving large national companies or traders, or
• demonstrating a blatant disregard for the law.

Even if you are ultimately not found to be in breach of the ACL, there are significant legal costs associated with defending an ACCC action.

FREE Online Training

LPA strongly encourages Members to make it compulsory for any staff who have input into, or responsbility for, the way in which pricing information is represented to consumers, to undertake online training. 

Visit ACCC funded website

www.ccaeducationprograms.org

to find out more about the Competition and Consumer Act 2010 (CCA) including the Australian Consumer Law (ACL).

Within the Small Business section, the ACCC offers 10 free short online training modules designed to help businesses learn about their rights and obligations under the CCA.

The training modules most relevant to Drip Pricing are:
• Misleading conduct & advertising
• Pricing & unfair selling practices (including additional fees and charges)

What to Do if You are Concerned about Compliance or Contacted by the ACCC

If you are concerned about any ACL compliance issue or you are contacted by the ACCC about an ACL compliance issue, please feel free to telephone  LPA to discuss or alternatively contact your legal adviser. Any communication with your legal adviser will usually be ‘privileged’ meaning that it cannot be used in legal proceedings, however you can obtain more information about this from your legal adviser.