Commission targets ‘opt out’ pricing

Commission targets ‘opt out’ pricing as Air New Zealand agrees to change how it sells travel insurance

The Commerce Commission is calling on New Zealand businesses to scrap the use of ‘opt out’ pricing after gaining agreement from Air New Zealand that it will end its practice of pre-selecting travel insurance for customers when selling tickets online.

The Commission is concerned that companies may be misleading consumers into purchasing something they didn’t intend to by requiring them to ‘opt out’ of buying additional goods or services during an online sales process.

After receiving the Commission’s views, Air New Zealand wrote to the Commission to advise that it intends to move to an ‘opt in’ basis as the method of selling travel insurance from April.

Commerce Commission Chair Dr Mark Berry said the Commission has issued Air New Zealand with a formal warning. No further action will be taken as the Commission considers its concerns will have been addressed if the change is implemented as agreed.

“We are pleased that Air New Zealand decided to respond to our concerns and will ensure consumers aren’t unintentionally paying for products they may not want or need in the future,” Dr Berry said.

“We will be targeting other companies we are concerned about. We would encourage all businesses selling online to proactively change their behaviour or drop any consideration of introducing this practice. We believe Air New Zealand made the right decision and other businesses should follow their example.”

Dr Berry said it is the Commission’s preference that all companies employ an ‘opt in’ approach when selling add-on products to consumers online, to avoid any possibility of breaching the Fair Trading Act.

“Consumers are perfectly capable of deciding for themselves whether they want to pay for additional products or services. If a company is concerned that its customers need insurance then a suitable approach is to require them to tick ‘yes’ or ‘no’ in a mandatory field and leave it in their hands.”

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