On 1 Nov, New Guidelines Will Kick In To Stop Misleading Adverts

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This, dear reader, is an example of a misleading advertisement. Any of our readers would tell you that while we do write the way a toddler speaks, we are painfully unfunny and only the 46th best news outlet in the country.

Don’t worry if you felt duped, though. The authorities have introduced guidelines to make sure certain misleading advertisements never reach your beautiful eyes again.

On 1 Nov, New Guidelines Will Kick In To Stop Misleading Adverts

From 1 Nov, businesses who engage in misleading advertising practices could face fines or even imprisonment, due to new guidelines rolled out by the Competition and Consumer Commission of Singapore (CCCS).

Such adverts include websites advertising tickets for $1,000 without stating additional charges such as a $50 booking fee and a $1,000 fee just to pick a seat.

These price transparency guidelines, which were first announced last year, is in accordance with the Consumer Protection (Fair Trading) Act and aims to stamp out errant practices.

According to CCCS, the guidelines cover four key pricing practices: drip pricing, price comparison, discounts, and use of the term “free”.

Drip Pricing

Remember the airline ticket example? Drip pricing refers to the intentional obscuring of additional charges which is then added on to the advertised price during transaction.

This is why your airline ticket initially cost $1,000 when you clicked on the link, but ended up amounting to $3,200 when you paid for it.

Charges which are commonly obscured or hidden include booking and credit card fees.

Under the new guidelines, suppliers should ensure that any mandatory charges such as taxes, surcharges, and service fees are included in the headline price.

Even if these mandatory charges cannot reasonably be calculated early on, their existence should be made known to the customer.

Misleading Price Comparison

This refers to companies that advertise a price that is better than competitors, even if it’s not.

Take the following example:

KFC starts selling the Nasi Lemak burger and says that it costs only $5, while McDonald’s Nasi Lemak burger costs $6.

However, when you go down to KFC, you find out that it actually costs $8, and that it’s only $5 if you order the burger without the meat, buns, and sauce.

Under the new guidelines, only prices of goods or services that are “accepted to be similar or equivalent by consumers or trade norms” should be compared.

False Discounts

This is pretty much self-explanatory, isn’t it?

One way that businesses advertise false discounts is through “strike-through pricing”, where the original price is crossed out next to the sale price.

Under the new guidelines, if suppliers are going to make a comparison with its usual or previous price, they should ensure the discount or price benefit offered is genuine and provide a valid basis for the comparison.

Misuse of the Term “Free”

We’re all familiar with this one.

How many times have you come across a product with a big fat $0 and a microscopic asterisk next to it indicating certain terms and conditions attached to the price?

Under the new guidelines, suppliers should ensure any representation that the price of a good or service is $0 or “free” is not false or misleading, said the CCCS.

Any subsequent charges or terms and conditions imposed on customers should be indicated clearly and prominently together with the “free” representation.

Offenders Could Be Fined $10,000 or Jailed For a Year

These new guidelines were prompted last year after a study on an online travel booking site showed that consumers ended up paying more than originally advertised.

Consumers who encounter suppliers engaging in such practices can approach the Consumers Association of Singapore (Case), CCCS said.

While CCCS does not have the power to issue fines at the moment, it can file an injunction application against errant businesses, reported ST.

And if these businesses continue their unfair practices, they could face a fine of up to $10,000 and up to a year in prison.

So, be warned, businesses. CCCS is watching you.

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