Your mouse hovers, perhaps with a little excitement, over the small icon of the supermarket trolley and you click, anticipating that you’ve closed the deal.
Wait. Instead of the satisfying confirmation that your purchase is complete, you’re diverted to a page asking you to read fine print. And not just one page, there seems to be an endless scroll with dozens of terms and conditions. It comes as a sense of relief when you spy a checkbox. You tick: “I acknowledge that I have read and understand the terms and conditions,” and click accept, having not read the terms and conditions, yet somehow confident there was nothing important in that grey wave of legalese.
Credit: Matt Davidson
Most of the time, we never think of this frequent interaction again, but when things go wrong these unread words can come back to haunt us. The yawning gap between what business think they are selling and consumers are actually getting was brought home recently by Qantas’ response to allegations that it misled travellers selling tickets for more than 8000 flights that it had already cancelled.
Qantas says that the case, launched by the Australian Competition and Consumer Commission (ACCC) in August, “ignores the realities of the aviation industry”. It says that airlines don’t sell a particular ticket on a particular flight, but rather a bundle of rights that promise to get customers on their way to their destination as close as possible to the flight time they book.
While a court will decide whether Qantas did mislead its customers, the defence certainly seems to be divorced from the understanding most customers think they get when they book a flight via the Qantas website or app.
Click and hope for the best.Credit: Wayne Taylor
But it’s not only Qantas that seems to have a different view of what it sells to what consumers understand they are getting. This seems to be widespread across Australian business, particularly online.
Nearly every time we sign a contract online, we’re at a disadvantage to the firm with which we’re dealing. Businesses set up the terms of the deal – often hidden in fine print – and we click “accept”. We don’t read it even when the terms and conditions specifically require us to indicate that we’ve read the terms on offer. Research confirms that only one or two of every 1000 people read contractual agreements when making purchases online.
And it’s not just terms and conditions that create an expectation gap between businesses and consumers. Business practices including marketing, product design, as well as customer service systems can all be designed to manipulate consumer understanding and choices.
Ticket and accommodation booking sites are a good example. These websites often use tactics such as countdown timers that pressure you to book before time runs out, or notifications that other people are “at this exact moment” considering the same hotel room as you. These practices are designed to create urgency or scarcity, but are sometimes based on a false premise.
The UK equivalent to the ACCC, its Competition and Markets Authority, have targeted businesses using these tactics. In 2019 the authority cracked down on hotel booking sites because they were not transparent about the fact that other people searching for hotel rooms were not necessarily looking for the same dates.
The US consumer protection regulator has also recently acted in relation to unfair practices online. The Federal Trade Commission has alleged unfair conduct by shopping behemoth Amazon, charging Amazon with duping millions of customers into unknowingly enrolling into its Amazon Prime program through manipulative website design interfaces as well as complicating the cancellation process.
Internally, Amazon used the term “Illiad” to describe its cancellation process, a reference to Homer’s epic poem set over 24 books. The cancellation process required people to navigate more than five screens and, even then, the cancellation button was hidden from clear view.
These types of business practices suggest a disdain that some businesses seem to have for their customers. Just last week, consumer group CHOICE gave one of its annual Shonky Awards to online retailer Kogan for its pre-checked box through which consumers “accepted” a free 14-day trial for free shipping that charged a $99 annual charge after the conclusion of 14 days.
It’s good that other countries are taking action, but Australian regulators are limited because our laws against unfair business practices aren’t as strong. Thankfully, there is an Albanese government proposal to remedy this by strengthening consumer protections. In August, Treasury outlined how a new economy-wide prohibition on unfair trading practices could address gaps in the Australian Consumer Law.
Not only would this align Australia’s laws with those in the UK, the US, the European Union and Singapore, enabling regulators to tackle unfair practices, it might help bridge the gap between business practices and consumer expectations.
If actively enforced, an unfair trade practices prohibition could outlaw efforts by business to undermine our choices or autonomy. It could also force firms to ensure important details aren’t buried in the fine print and are clear, easy to understand, and provided in a timely way. Such a rule could also tackle bad customer service by not allowing companies to make it unreasonably hard for customers to get assistance when necessary.
Unfortunately, without reform in this area, I think Australian consumers don’t have a good basis to trust firms. Too many businesses, like Qantas, point to fine print to get around consumers’ understanding of what is promised or use manipulative techniques that can effectively trick us.
A new prohibition on unfair trade practices would help remedy this, and rebuild trust in business, including Australia’s national carrier.
Gerard Brody is a consumer advocate, and chairperson of the Consumers’ Federation of Australia.
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Nobody reads the fine print, and companies like Qantas know it
7
7
12.11.2023
Your mouse hovers, perhaps with a little excitement, over the small icon of the supermarket trolley and you click, anticipating that you’ve closed the deal.
Wait. Instead of the satisfying confirmation that your purchase is complete, you’re diverted to a page asking you to read fine print. And not just one page, there seems to be an endless scroll with dozens of terms and conditions. It comes as a sense of relief when you spy a checkbox. You tick: “I acknowledge that I have read and understand the terms and conditions,” and click accept, having not read the terms and conditions, yet somehow confident there was nothing important in that grey wave of legalese.
Credit: Matt Davidson
Most of the time, we never think of this frequent interaction again, but when things go wrong these unread words can come back to haunt us. The yawning gap between what business think they are selling and consumers are actually getting was brought home recently by Qantas’ response to allegations that it misled travellers selling tickets for more than 8000 flights that it had already cancelled.
Qantas says that the case, launched by the Australian Competition and Consumer Commission (ACCC) in August, “ignores the realities of the aviation industry”. It says that airlines don’t sell a particular ticket on a particular flight, but rather a bundle of rights that promise to get customers on their way to their destination as close as possible to the flight time they book.
While a court will decide whether Qantas did mislead its........
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