Advertising: Who reads the small print?
- other than lawyers and the Commerce Commission. Advertising obligations under the Fair Trading Act 1986

Terms and conditions are always in the small print, right?

Wrong. Terms and conditions relating to an offer of goods or services, especially critical conditions, must not be buried in the small print.

They must be in a sufficiently large font and strategically placed so as to be readily brought to the attention of potential punters.

It is no defence to say that everyone knows to look for the conditions where they're customarily found - at the bottom section of an advertisement in small print.

The Commerce Commission is particularly alert to hidden or undisclosed conditions in advertising which breach the Fair Trading Act ("the Act").

This is especially so if a hidden or undisclosed condition hits Percy Public in the pocket, or which excludes readers, or some readers, from an offer.

Any condition in small print which means that purchasers will have to pay more than the advertised "headline rate" for goods or services will be targeted.

Last week, the Commission reached a settlement with Slingshot, an internet service provider, for an alleged small print condition which the Commission considered breached the Act. More commonly, the Commission prosecutes for such transgressions.

Slingshot had advertised one of its products on television at a headline rate, with an illegible condition in the small print which meant the headline rate would never be available.

The Commission received complaints about the advertisement for Slingshot's offer of "unlimited dial-up internet plans from $9.95". The condition in the small print required consumers to sign up for Slingshot's Anytime 10 Plan and spend an additional $10 per month on toll calls in order to qualify for the deal. Consumers would have to pay a minimum of $19.95 per month for the offer, not the "$9.95" headline rate.

Despite Slingshot having modified its advertisement, by increasing the size of the graphics to show the conditions of the offer, the Commission was not satisfied.

In its media release about the settlement, the Commission's oft-repeated mantra was "Ensuring that consumers are accurately informed about the total cost of a service or good is a priority for the Commission" . It also stated "Slingshot's advertisements were a graphic illustration [no pun intended] of the importance of this".

The Commission is generally keen to prosecute companies for advertising important conditions in the small print in breach of the Act. It has issued prosecutions against some of the major airlines, charging them with allegedly inadequately disclosing critical conditions about charges in their small print advertising. The headline rates in the airlines' advertising customarily exclude such charges as service fees, fuel and insurance charges and airport taxes. The insurance surcharges apparently vary, depending on foreign currency fluctuations and the number of sectors being travelled. In a media release at the time it filed recent prosecutions in this area, the Commission stated

"Consumers are entitled to be told one price. The advertised price should be the price they will pay for their tickets and should not have additional taxes, levies and costs disclosed only in small print or not at all. Through this action, the Commission is signalling its expectation that advertised prices should be the price you pay".

How are advertisers to get all of the critical information into, or at least pertinently close to, a headline rate? It's a complicated issue but one which must be constantly confronted by advertisers if allegations of breaches of the Act are to be avoided.

In television advertising, the situation can be covered, as Slingshot did in its corrective advertising, by including highly visible graphics and a voice-over disclosing relevant conditions. Of course, the graphics have to be on screen for a reasonable time - long enough for viewers to be able to read them.

In theory at least, it should be easier to ensure compliance with the requirements of the Act in print advertising than advertising on a transitory and expensive television screen. Advertisers, however, often have to include a mass of information in their advertisements, some of which inevitably ends up in the small print at the bottom.

Where critical conditions are going to cost the consumer, or exclude consumers from the offer, special care needs to be taken to ensure such costs or exclusions are up front.

There are invariably a number of ways in which advertising can be modified to ensure that the Act is not breached, without losing the impact of the key message of the advertiser.

It is important to get early advice about the issue - preferably well before a print deadline. Doing so could save a lot of time, money and the frustration of corrective advertising.