Albanese government flags crackdown on subscription traps, hidden fees
Written by admin on October 15, 2024
Businesses employing confusing subscription cancellation processes and sneaky tactics aimed at hitting consumers with hidden fees will be targeted in a new suite of proposed measures aimed at safeguarding consumers from the “dodgy practices”.
Treasury has been tasked with consulting on the draft laws, which are set to be finalised in the first half of 2025 following consultation with states and territories, with legislation unlikely to be introduced before the federal election which must occur in May at the latest.
The practices which could be banned under the new laws include complicated subscription cancellation processes, dynamic pricing and ‘drip pricing’ methods, in which extra fees are added through a protracted checkout process.
The measures will also crackdown on online merchants using “deceptive” practices such as hiding material information, using countdowns to create a false sense or urgency and purposefully making it difficult for consumers to contact the business in order to lodge a complaint.
Merchants found refusing consumers refunds, repairs or replacements could also be hit with penalties by the Australian Competition & Consumer Commission, or state and territory agencies, with stakeholders invited to respond to the consultation paper to be released on Wednesday.
Prime Minister Anthony Albanese says businesses doing the wrong thing have been put “on notice”.
“We’re taking strong action to stop businesses from engaging in dodgy practices that rip consumers off,” he said.
“Hidden fees and traps are putting even more pressure on the cost of living and it needs to stop.”
Treasurer Jim Chalmers said while most businesses were “doing the right thing,” the fight against unfair practices would also help ease cost-of-living pressures for households.
“This is all about cracking down on dodgy deals to save Australians money if we can, and where we can,” he said.
Assistant Treasurer and Financial Services Minister Stephen Jones said the new rules would better safeguard consumers shopping online.
“Consumer protections shouldn’t stop at the internet. Whether you are shopping online or at a brick and mortar store, the Albanese government is protecting Australian consumers,” he said.
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“This is all about ending the rip offs so people don’t fall into subscription traps or added fees when they purchase things like airline or concert tickets.”
Wednesday’s announcement follows Labor’s promise to ban debit card surcharges from January 1, 2026 if the reform isn’t implemented through a current review being undertaken by the Reserve Bank.
The consumer watchdog has also been given an extra $2.1m in funding to tackle excessive surcharges, and implement work to reduce payment fees.
