Labor has announced it plans to wipe out all those annoying fees that you seemingly can’t escape. If you’ve ever found it difficult to cancel a subscription or couldn’t contact a business to complain about a product, the government hopes its new legislation will make that a thing of the past.
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. Legislation is unlikely to be introduced before the federal election, which must occur in May at the latest.
“We’re taking strong action to stop businesses from engaging in dodgy practices that rip consumers,” Prime Minister Anthony Albanese said.
“Hidden fees and traps are putting even more pressure on the cost of living and it needs to stop.”
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What dodgy fees could be cancelled under the move?
Under the law, businesses would be forced to provide simple and easy methods to cancel a subscription and have clearly defined contact information available.
If you’ve ever tried to get out of a gym membership, you’ll know it can be a tricky, lengthy and cumbersome process.
Albanese also wants to ban drip pricing, which is when fees are withheld until the final purchase stage, as well as dynamic pricing, which can change the cost of an item if there’s high or low demand.
Yahoo Australia recently noticed price changes during the sale period for Oasis tickets for their tour next year, even though Live Nation and Ticketmaster, the two companies behind the tickets for the 2025 gigs, denied using “dynamic pricing”.
Businesses could also be stopped from saying Aussies had a “limited time” to buy something online or having countdown timers on the screen that create a sense of urgency.
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Treasurer Jim Chalmers believes most businesses are doing the right thing but wants to level the playing field.
“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 that while there are plenty of measures to help people shopping in-person, more work needs to be done in the online space.
“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.
“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.”
The great surcharge debate: Albo’s mission to end annoying fee
The announcement to crack down on dodgy and hidden fees and online practices comes just after Albanese announced his intention to ban debit surcharge fees.
The $1 billion a year scourge on Aussies’ wallets has been in the crosshairs recently amid the cost-of-living crisis.
Labor wants to end the fee once and for all by the start of 2026 and has given the consumer watchdog millions to go after retailers who are over-charging customers.
“Consumers shouldn’t be punished for using cards or digital payments, and at the same time, small businesses shouldn’t have to pay hefty fees just to get paid themselves,” Chalmers said.
“This is all about getting a better deal for consumers, reducing costs for small businesses and promoting a more competitive payments system.”
There are some fears that if the fees are just wiped out for consumers then it could hurt businesses, particularly smaller ones who pay, on average, higher fees per transaction than larger ones.
The government hasn’t provided much detail on how the surcharge ban will work and whether the onus will be put onto banks and card payment providers instead of businesses and consumers.
Labor said it will wait for the Reserve Bank to publish the findings of its investigation into the practice until it provides more information.
– with NCA Newswire and AAP
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