Dodgy business practices that trap people in subscriptions that are hard to ditch or trick them into paying more than they expect are set to be banned.
The federal government has a slew of underhanded tactics in its sights as it seeks to stop businesses ripping people off.
These include ‘drip pricing’, which adds hidden fees, as well as ‘dynamic pricing’, which impacts a product’s cost during a transaction.
Erin Turner, chief executive of the Consumer Policy Research Centre, has been advocating for a crackdown on these practices for years.
“I’m really excited to see the announcement,” she told AAP on Wednesday.
“There’s a lot of different unfair business practices out there, but we’ve seen again and again over the last decade that our consumer law isn’t fit for purpose, it doesn’t protect people against really harmful practices that should be stopped and are stopped in other countries.”
Deceptive and manipulative practices – such as claiming customers had limited time to buy a product – would also be outlawed.
Businesses making it difficult for customers to contact them about problems, and online retailers which forced customers to set up accounts and provide unnecessary information during transactions, will also be scrutinised.
Ralf Steinhauser, an expert in behavioural economics at the Australian National University, personally noticed “a pervasive culture” of requesting excessive personal information during sign-ups in Australia after moving from Europe.
“I have personally experienced this many times and find it baffling, particularly when sensitive data like a date of birth is often mandatory for signing up for even trivial services,” he said.
“I usually avoid providing my real date of birth, as I am concerned that, in the event of a data breach, it could be misused for fraud, especially in banking or healthcare contexts.”
Prime Minister Anthony Albanese says it’s time to end “dodgy” business practices.
“We want to make sure people get a fair deal, that there are not hidden charges or deceptive or manipulative practices and there is transparency,” he said.
“The aim is to assist people with the cost of living by removing dodgy arrangements and making sure consumers get that value.”
Consumer psychologist Adam Ferrier, who founded marketing agency Thinkerbell, said the government’s goal was admirable as it tried to find the unethical line between persuasion and manipulation.
“Basically humans think like a river, we take the path of least resistance,” he said.
“Everyone selling anything is, at some level, aware of this and will offer limited time discounts to cue scarcity, or communicate social proof by describing items as best sellers and so on – all of which help a consumer spend more money.”
Treasurer Jim Chalmers said it was time to change the rules.
“Most businesses do the right thing by Australians and they’ve got nothing to worry about,” he said.
“This is all about cracking down on dodgy deals to save Australians money if we can, and where we can.”
The proposed changes follow Labor’s announcements on supermarket prices and credit card transaction fees, as the government builds an argument around cost-of-living relief ahead of next year’s federal election.
“It shows that they’re taking cost-of-living issues really seriously,” Ms Turner said.
“This is one of those reforms that will genuinely help people.
“It’ll save people money, it will reduce a lot of frustration and harm as well.”
The government has also released a consultation paper to strengthen the Australian Competition and Consumer Commission’s powers to protect customers and small business owners.
It is considering penalties for suppliers who refuse to provide repairs, replacements or refunds.
