Government proposes laws to combat subscription traps and hidden fee
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In an era where online shopping and subscription services have become the norm, the Albanese government is taking a stand against the underhanded tactics that leave consumers out of pocket.
The proposed legislation is a clarion call to businesses that have been profiting from hidden fees and subscription traps, signalling a crackdown on these ‘dodgy practices’.
The government's proposed laws are a response to the growing concern over businesses that employ confusing subscription cancellation processes or use sneaky tactics to impose hidden fees on consumers.
These practices, often buried in the fine print or masked by complex website navigation, can lead to unexpected charges that inflate the cost of living for unsuspecting customers.
The Treasury has been given the responsibility of consulting on the draft laws and finalising them in the first half of 2025.
This will involve consultation with states and territories, and the legislation is expected to be introduced after the federal election, which is due by May at the latest.
Under the new laws, businesses could face bans for employing tactics such as complicated subscription cancellation processes, dynamic pricing, and 'drip pricing’ methods.
Drip pricing involves adding extra fees throughout a protracted checkout process.
The crackdown isn't limited to subscription models.
Online merchants using deceptive practices, such as hiding important information, creating a false sense of urgency with countdowns, or making it difficult for consumers to contact the business for complaints, will also be targeted.
Merchants who refuse consumer refunds, repairs, or replacements could face penalties enforced by the Australian Competition and Consumer Commission (ACCC) or state and territory agencies.
Stakeholders are invited to respond to the consultation paper, which will be released on Wednesday, to contribute to shaping the legislation.
Prime Minister Anthony Albanese said businesses doing these have been put ‘on notice’.
‘We’re taking strong action to stop businesses from engaging in dodgy practices that rip consumers off,’ he said.
‘Hidden fees and traps are putting even more pressure on the cost of living and it needs to stop.’
Treasurer Jim Chalmers echoed this sentiment, emphasising that while most businesses were ‘doing the right thing’, the fight against unfair practices is also a battle to ease cost-of-living pressures for households.
‘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 highlighted that the new rules would extend consumer protections to online shopping.
‘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.’
This announcement follows Labor's promise to ban debit card surcharges from 1 January 2026 if the reform isn't implemented through a current review by the Reserve Bank.
Additionally, the consumer watchdog has received an extra $2.1 million in funding to tackle excessive surcharges and work to reduce payment fees.
Have you ever been caught in a subscription trap or hit with unexpected fees? Share your experiences in the comments below!
The proposed legislation is a clarion call to businesses that have been profiting from hidden fees and subscription traps, signalling a crackdown on these ‘dodgy practices’.
The government's proposed laws are a response to the growing concern over businesses that employ confusing subscription cancellation processes or use sneaky tactics to impose hidden fees on consumers.
These practices, often buried in the fine print or masked by complex website navigation, can lead to unexpected charges that inflate the cost of living for unsuspecting customers.
The Albanese government has proposed laws to combat businesses’ processes of subscription traps and hidden fees. Credit: Unsplash
The Treasury has been given the responsibility of consulting on the draft laws and finalising them in the first half of 2025.
This will involve consultation with states and territories, and the legislation is expected to be introduced after the federal election, which is due by May at the latest.
Under the new laws, businesses could face bans for employing tactics such as complicated subscription cancellation processes, dynamic pricing, and 'drip pricing’ methods.
Drip pricing involves adding extra fees throughout a protracted checkout process.
The crackdown isn't limited to subscription models.
Online merchants using deceptive practices, such as hiding important information, creating a false sense of urgency with countdowns, or making it difficult for consumers to contact the business for complaints, will also be targeted.
Merchants who refuse consumer refunds, repairs, or replacements could face penalties enforced by the Australian Competition and Consumer Commission (ACCC) or state and territory agencies.
Stakeholders are invited to respond to the consultation paper, which will be released on Wednesday, to contribute to shaping the legislation.
Prime Minister Anthony Albanese said businesses doing these have been put ‘on notice’.
‘We’re taking strong action to stop businesses from engaging in dodgy practices that rip consumers off,’ he said.
‘Hidden fees and traps are putting even more pressure on the cost of living and it needs to stop.’
Treasurer Jim Chalmers echoed this sentiment, emphasising that while most businesses were ‘doing the right thing’, the fight against unfair practices is also a battle to ease cost-of-living pressures for households.
‘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 highlighted that the new rules would extend consumer protections to online shopping.
‘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.’
This announcement follows Labor's promise to ban debit card surcharges from 1 January 2026 if the reform isn't implemented through a current review by the Reserve Bank.
Additionally, the consumer watchdog has received an extra $2.1 million in funding to tackle excessive surcharges and work to reduce payment fees.
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