Guidelines on pricing practices to kick in on Nov 1

Move to curb errant practices spells out actions businesses must take so they don't infringe law

The price transparency guidelines set out how the CCCS will interpret and wield the Consumer Protection (Fair Trading) Act to stamp out errant practices.
The price transparency guidelines set out how the CCCS will interpret and wield the Consumer Protection (Fair Trading) Act to stamp out errant practices.PHOTO: ST FILE

Businesses that engage in misleading advertising practices such as touting prices that omit mandatory fees, for example, have two months to clean up their act.

A set of guidelines that specify pricing practices that may break the law will take effect on Nov 1 and apply to all physical and online suppliers, the Competition and Consumer Commission of Singapore (CCCS) said yesterday.

The price transparency guidelines, announced last year, set out how the CCCS will interpret and wield the Consumer Protection (Fair Trading) Act to stamp out errant practices, and spell out actions that businesses should take to ensure they are not infringing the law.

This comes as the CCCS is looking at beefing up its enforcement powers in administering the Act, including the possibility of being able to impose financial penalties without having to go through the courts.

The guidelines cover four areas: Drip pricing, which refers to fees added on to the advertised price during the transaction process; false or misleading price comparisons; fake discounts; and use of the term "free".

The full guidelines, published on CCCS' website yesterday, were prompted by a study on the online travel booking space last year, which found that some consumers ended up paying more than they bargained for due to opaque pricing and marketing practices.

A check by The Straits Times last October found that the use of tactics flagged by the commission, such as drip pricing and pressure selling, was widespread among travel booking sites.

Some have since changed their practices, a check yesterday found.

Expedia's Singapore site, for example, now displays a disclaimer that the headline price excludes taxes and fees.

Travel booking platform Agoda, however, advertised the same "daily deal" for a Sentosa hotel room on two separate days last week. Moreover, the price remained the same even after the deal was removed yesterday.

Mousing over a crossed-out price implied as the usual price for this hotel room brought up a prompt that it was actually the highest price paid for a booking within the last year.

Agoda did not respond to queries.

The CCCS said yesterday that consumers who encounter unfair practices should approach the Consumers Association of Singapore (Case), adding that it will monitor the conduct of suppliers and take action against those that persist in unfair trade practices.

The commission's director for consumer protection, Mr Jack Teng, said during a virtual press conference yesterday that the CCCS takes a balanced approach in enforcing the rules, with mediation and negotiation being the first step.

He said the watchdog will look into businesses that persist in errant practices, adding: "(If) despite chances like Case approaching you and giving you chances to change and you don't, then we will take action."

While the Act also applies to overseas-based businesses that supply goods and services to consumers in Singapore, cross-border enforcement remains a challenge for regulators worldwide, Mr Teng noted.

"In this aspect, consumer education is very crucial. So, consumers must make informed choices and if something seems too good to be true, please think twice before transacting."

Mr Lim Biow Chuan, president of Case, said it received at least 246 complaints alleging unfair practices highlighted in the guidelines between 2018 and last year.

When such complaints are received in the future, Case will point businesses to the guidelines and remind them of their obligations, he said. Recalcitrant firms will continue to be referred to the CCCS for investigation and enforcement.

Ms Davina Wong, CCCS' senior assistant director for consumer protection, noted that building trust with consumers will help businesses in the long run, particularly during the current economic climate, when consumers may be more cautious in how they spend their money.

A version of this article appeared in the print edition of The Straits Times on September 08, 2020, with the headline 'Guidelines on pricing practices to kick in on Nov 1'. Print Edition | Subscribe