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SINGAPORE – Companies that engage in deceptive advertising have two months to clean up their act.
They will not, for example, be able to advertise airline tickets for $ 1,000 without stating additional charges in advance, such as a $ 100 reservation fee and a $ 200 fuel surcharge.
A set of guidelines, which specify pricing practices that may violate the law, will take effect on November 1 and apply to all physical and online providers, the Singapore Competition and Consumers Commission (CCCS) said Monday ( September 7th).
The pricing transparency guidelines, first announced last year, set out how the CCCS will interpret and enforce the Consumer Protection (Fair Trade) Act to eradicate errant practices and detail the actions companies must take to ensure they do not break the law.
This comes as the CCCS is seeking to strengthen its enforcement powers to administer the Act, including the possibility of being able to impose financial penalties without going through the courts.
While the competition and consumer watchdog does not currently have the power to impose fines, it can investigate errant businesses and file a request for a court order against them.
If these companies continue their unfair practices, they can be held in contempt of court, which carries a fine of up to $ 10,000 and up to one year in prison.
The guidelines cover four areas: drip pricing, price comparison, discounts, and use of the term “free.”
1. Drip prices
This refers to the practice of adding fees to an advertised price during the transaction process. A common practice is to exclude reservation and credit card fees from the advertised price, and to use pre-checked boxes that require consumers to opt out of add-ons.
CCCS Guidelines: Suppliers must ensure that all mandatory fees, such as taxes, service fees, and surcharges, are included in the main price. When mandatory fees or charges cannot be reasonably calculated in advance, their existence must be clearly indicated in advance. A opt-in approach should be used for plugins.
2. Misleading price comparisons
Advertise a price as an advantage over a competitor when you don’t have it.
CCCS Guidelines: Suppliers must ensure that comparisons made with competitive prices are not false or misleading. Only the prices of goods or services that consumers or trade standards accept as similar or equivalent should be compared, and suppliers should regularly check and update reference prices and keep records of them to demonstrate that the price comparisons made they are not false or misleading.
3. False discounts
Advertising a false discount on the usual price of a good or service. The strikethrough price, where the original price is crossed out along with the selling price, is a common method.
CCCS Guidelines: When vendors offer a discount or make a comparison with a usual or previous price to represent a price benefit, they must ensure that it is genuine and be able to provide a valid basis for the discount or comparison. Time-limited discounts must clearly state the applicable time period.
4. Misuse of the term “free”
Advertise a product or service as free when conditions are imposed.
CCCS Guidelines: Suppliers must ensure that any claim that the price of a good or service is free is not false or misleading. All requirements, post charges, and terms and conditions must be clearly and prominently stated along with the “free” representation. For free trials, providers are also encouraged to notify consumers before the trial period ends and provide clear information on any subsequent chargeable fees, as well as the cancellation process.
The full guidelines were posted on the CCCS website on Monday after a public consultation exercise that garnered 26 responses.
The guidelines were prompted by a study of online travel booking space last year, which found that some consumers ended up paying more than they bargained for due to non-transparent pricing and marketing practices.
Consumers who encounter unfair practices should approach the Singapore Consumers Association (Case), CCCS said, adding that it will monitor the conduct of suppliers and take action against those who persist in unfair business practices.
The commission’s director of consumer protection, Jack Teng, said during a virtual press conference that the CCCS takes a balanced approach to enforcing the rules, with mediation and negotiation the first step.
He said that the watchdog will examine companies that are very persistent in their errant practices, adding: “(If) despite the possibilities as Case approaches you and gives you opportunities to change and does not, then we will take action. “.
While the Act also applies to overseas-based companies supplying goods and services to consumers in Singapore, cross-border enforcement remains a challenge for regulators around the world, Teng noted.
“In this regard, consumer education is very important. Therefore, consumers must make informed decisions and if something seems too good to be true, think twice before making the transaction.”
Asked by The Straits Times about the possibility that CCCS is empowered to issue financial penalties for violations of consumer protection laws, which it can already do for violations of Competition Law, the Deputy Executive Director for Legal, Compliance and commission consumer protection, Mr. Lee Cheow Han, said this is being investigated.
“We have found that in some respects there is room for us to review our … administration (of the Act), and perhaps take a look at having some additional legal powers, so that there can be a better and more effective application of the Act.” , said.
Ms Sia Aik Kor, Executive Director of CCCS, said the review is underway and more details will be announced later.
For now, the pricing transparency guidelines are meant to give providers greater clarity on how to comply with consumer protection laws, he said.
“Suppliers can win too, as fair business practices can go a long way toward building a strong reputation as a trusted merchant,” he said.
The guidelines are available on the CCCS website.
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