‘Unfair’ subscription traps to be banned in new rules
Unfair trading practices such as subscription traps and drip pricing will be banned under reforms designed to strengthen consumer protections.
The Albanian government submitted a law to the parliament on Wednesday to put an end to the tactics used by businesses that cost people time and money as rising prices negatively affect households.
Subscription traps are a deceptive practice where companies make it easy to sign up for a service but difficult to cancel.
This often leads to unwanted payments being made by consumers who have to jump through many hoops.
Drop pricing is when a low price is initially advertised but becomes more expensive when mandatory fees and taxes are applied at checkout.
Deputy Competition Minister Andrew Leigh said the measures would be actively scrutinized by Australia’s consumer watchdog as well as state and territory regulators.
Although the legislation is still at least a month away from being passed, he hoped businesses would be proactive and implement the reforms before the laws come into force.
“There will be a lot of police on duty to make sure companies are doing the right thing,” he told reporters in Canberra.
“The expectation that companies will comply with these new rules starts from today,” he said.
Dr Leigh said the rules were backed by tough penalties, with maximum penalties 10 times higher than when Labor took office in 2022.
Center for Consumer Policy Research chief executive Erin Turner said subscription traps were catching out three in four Australians.
“The laws coming into force today mean we can trust that businesses will treat us fairly or face significant and meaningful penalties if they do something wrong,” he said.
“We know that unfair labor practices prohibit business. We’ve seen them operate internationally.”
The legislation is part of wider reforms the government is introducing to curb anti-competitive behavior and support consumers.
These include increasing fines to $100 million if businesses are found to have breached consumer and competition law.
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