‘Tricky’ pricing tactics, hidden fees in Labor’s sights

Labor’s efforts to ease the cost-of-living crunch will extend to the ‘tricky tactics’ used by business to ‘rip off’ consumers on everything from concert tickets to gym memberships.

Anthony Albanese will announce a ban on unfair trading practices on Wednesday. Picture: NewsWire/ Steve Pohlner

Labor’s efforts to ease the cost-of-living crunch will extend to the “tricky tactics” used by business to dupe consumers, pledging to make it easier to cancel subscriptions and put a stop to hidden fees on everyday purchases such as concert tickets and gym memberships.

After injecting $30m into the competition watchdog to enhance its monitoring of supermarkets, overhauling the nation’s mergers regime, implementing a mandatory food and grocery code of conduct, revealing plans to tackle so-called “shrinkflation” and nixing debit card surcharges, Anthony Albanese on Wednesday will announce an economy-wide prohibition on “unfair trading practices”.

While not illegal under existing consumer laws, unfair trading practices can nevertheless result in additional costs for households.

The move represents the latest tranche of Labor’s multi-pronged effort to ease the cost-of-living squeeze, as it attempts to arrest a slide in support as voters are struck by stubborn inflationary pressures.

Singled out by the Albanese government’s mooted ban are so-called “subscription traps”, which use arduous and confusing steps to make cancelling ongoing charges difficult, as well as onerous requirements that force shoppers to hand over personal information before making a purchase.

Online outlets that use deceptive and manipulative sales practices with the intent of confusing or overwhelming customers will also be targeted, as will warnings that customers only have a “limited time” to purchase a product, creating a false sense of urgency.

Additionally, “dynamic pricing” whereby the cost of a product changes during purchase, and “drip pricing” techniques, where fees are added though the transaction process, are set to be barred.

Treasury will consult on the design of the general ban before the government progresses with legislation.

The announcement delivers on a key demand of the Australian Competition and Consumer Commission, which had advocated for the introduction of an economy-wide prohibition on unfair trading practices not captured by existing laws.

In a deepening of the government’s growing divide with corporate Australia, the Prime Minister took aim at those firms that employed “dodgy practices that rip consumers off”.

“Today’s announcement puts businesses engaging in unfair trading practices on notice,” Mr Albanese said. ”Hidden fees and traps are putting even more pressure on the cost of living and it needs to stop.“

Under the changes proposed by Labor, the ACCC, alongside state and territory consumer protection agencies, will be empowered to issue infringement notices.

Penalties will also be levelled against businesses that refuse to provide consumers with repair, replacement, refund or other remedies when required.

The reform, however, is likely to find opposition among employers groups that previously resisted the introduction of a general prohibition on unfair trading practices,

In its submission to a review of unfair trading practices conducted by Treasury late last year, the Business Council of Australia agitated against an outright ban, arguing that the case that existing consumer protections had been insufficient in protecting consumers had not been made.

A general prohibition would ultimately risk undermining consumer interests in the long term by increasing the costs and complexity to business in the delivery of goods and services, while “chilling” business investment and innovation, the BCA’s submission said.

The Albanese government aims to announce the finalised reforms ahead of the election.