Victor says that the seminar will explain the law as it applies to ISPs, telcos and other industries.  ‘This law applies over almost all retailing in Australia,’ says Victor.  ‘So every business needs to be across it.’  Victor and Peter both specialise in plain english explanations, so this will be an ideal chance for business people to learn these important new rules.

Bookings are free but places are limited.  There are only so many people who can fit into the Logie-Smith Lanyon board room

Here’s the seminar flyer.

Under the new component pricing law that kicked in on 25 May, the single buy price of a plan like that must be ‘specified in a prominent way’.  If 3′s catalogue goes anywhere near passing that test, the new law is dead. 

ACCC really needs to kick off some enforcement action against retailers it considers aren’t complying with section 53C of the Trade Practices Act.  It’s hard to expect CSPs to follow the spirit of the component pricing law when their competitors seem to be getting away with feint micro-print.

Back in November 2008 we reported that the ACCC were getting ‘very cranky’ about premium SMS. And in March this year, ACCC supremo, Graeme Samuel, gave a direct warning to the industry about premium SMS.

Well, the ACCC has stuck to its word and launched two separate actions in the Federal Court against AMV Holdings and Clarion Marketing Australia.

The ACCC alleges that AMV ran misleading ads that hid the true cost of premium services being offered and that Clarion signed customers up to a paid subscription service without their knowledge.

The ACCC is usually a very predictable regulator. They normally advertise which industries or which industry practice they will be targeting. Quite often, they make known what they consider acceptable and unacceptable practice. It’s part of their approach to enforcement.

And it pays to listen.

Compliance can be balancing act, especially for the small to medium-sized telco. But the cost of non-compliance can be significant – even terminal. It’s a no-brainer then to focus compliance efforts on areas that the chief regulator has said it’s focusing on.

So, what else is on the ACCC’s agenda at present?

Here’s a clue -

this is what the ACCC has said about the new component pricing law:

… the new component pricing provisions apply to all price representations made to consumers

… you should review your marketing across all media including television, radio, print, billboards, posters, websites et cetera

… there is no ‘grace period’ for compliance with the new provisions – they have been in effect since 25 May 2009.

Fair warning.

In a brilliant moment, Chad was being shouted at by FunnyTel CEO Steve that the company didn’t have to employ him, and every day at his desk was a favour.  Steve’s a motivational speaker in his spare time.

But then Chad realised … Steve doesn’t need me, and the customers don’t need us !  Everything they buy is optional, and options don’t need to be included in the total product price, do they ???  So FunnyTel’s famous ‘Zero Heroes’ campaign was born and ACCC was smashed again by Australia’s fastest thinking telco.

‘And it’s interesting to note’, says Chad, ‘that we didn’t need to waste a single dollar on external advice.  The ‘$Nuffin to pay’ campaign is proof you don’t need Bourke Street tossers to create a totally legal campaign.’

Just days after ACCC wrote to the industry demanding immediate compliance with its new component pricing law, mega-telco Optus has ignored it.

Today’s web carries a flash ad spruiking a ‘new monster value ‘yes’ $59 cap, ‘so good, it’s scary’.  So is the fact that it’s an illegal advertisement.

Well, $59 is the monthly base price for the plan, so unless it’s a month-to-month plan (so that $59 would be the total cost as well as the monthly cost), the advert needs to state prominently the total contract cost.

Well, the flash banner doesn’t, and neither does the web page it links to.  The web page includes total cost down the bottom and in small print.  But ‘prominent’ ?  No way.  Optus is plainly in breach of section 53C of the Trade Practices Act.

ACCC’s new guide to the component pricing law shows how easy it is to slip up in advertising. 

Click on the sample advert to enlarge it, and you’ll find that – despite ACCC encouragement – the advertiser shouldn’t advertise a total price of $2,240.  We’re all human, even the regulator.

Take a look at the Naked DSL advert in the top left hand corner of Dodo’s home page as at 4 June 2009.  In a few square inches, there are three TPA breaches. 

We’ll explain what they are.

The home page

The main message

Always start a TPA advertising analysis with the question:  ‘What’s the main message of the advert ?’

Here, the eye-catching points are:

• Naked DSL from $29.99 a month
• No phone line needed

What a bargain !  Where do we sign ?

The full facts

Look just to the right of the highlighted $29.99 per month text … that’s not a dead pixel on your monitor.  It’s a footnote number.  A tiny little feint number ’1′.

It references some small, dull text at the bottom of the page that grudgingly reveals that to get the $29.99 price, you must bundle the DSL service with a Dodo mobile service.

What’s wrong with that ?

Nothing, if it was prominently explained in a way that formed part of the main message.

But in this case:

• It isn’t prominent, and doesn’t form part of the main message.  In fact, it significantly changes the main message.  The main message gives no clue that the buyer has to buy a second service to get the low price.

Breach of section 52 of the Trade Practices Act

• There’s a real problem in claiming that a customer won’t need a phone line, but requiring them to take a mobile service.  The value proposition of naked is that you can factor out the cost of a phone service if all you want is DSL.  To tie in an alternative phone service in the small print makes a lie, for practical purposes, of the ‘no phone line’ claim.  It’s literally true but it’s still misleading.

Breach of section 52 of the Trade Practices Act

• The total price of the plan isn’t stated prominently, and the total price of the bundle isn’t stated at all. 

Breach of section 53C of the Trade Practices Act

‘You should review your marketing across all media including television, radio, print, billboards, posters, websites et cetera,’ says the regulator. ‘The ACCC is concerned that some telecommunications service providers are making component price representations in ways which may not comply with the recent amendments to the TPA.’

Any ISP or telco that isn’t up to speed on the new Trade Practices Act component pricing law needs to act immediately. 

We can’t say we weren’t warned.

When will they ever learn ?

The new law

It’s called ‘section 53C’ of the Trade Practices Act.  Basically, it says that any consumer advertisement that mentions any part of the price must also prominently state the whole of the price.

We reported the new law before it arrived.

TPG’s breach

Here’s what you’ll find today on the TPG home page:

The total price for this service isn’t stated at all. 

Now, we agree that a web ad can satisfy the law by including the necessary total price on a hyperlinked ‘landing page’.  We think a web ad and its direct link are conceptually equivalent to the front and back sides of a paper flyer. 

But does the hyperlinked landing page state the total price ?  Nope.  Maybe it’s somewhere else on the TPG site but if so, it fails the ‘prominence’ test required by the law.