ASIC has accepted an Enforceable Undertaking from
Coles Myer Limited to resolve concerns that Coles Myer Source
MasterCard advertising in June 2005 was misleading.
Coles Myer promoted two different offers for the
Coles Myer Source MasterCard. The first offer promoted an eight cents
per litre fuel saving associated with successful application for the
card. The second offer promoted a 10 per cent discount on purchases at
Myer and Megamart stores associated with successful application for the
card.
The actual fuel savings attributed to the use of the
Coles Myer Source MasterCard was four cents a litre for the first three
months and two cents a litre after that (further discounts required a shopper docket).
ASIC was concerned that the advertising may mislead
consumers to believe these savings were permanent features of the Coles
Myer Source MasterCard.
In addition:
- the 10 per cent discount on purchases at Myer and Megamart stores only applied to a single purchase using the card; and
- the promotional brochure that contained the
application form for the 10 per cent discount did not disclose that the
offer was limited in that it did not provide a discount on all good and
services in Myer and Megamart stores nor which goods and services were
excluded.
Lastly, ASIC was concerned that the promotional
brochures represented that an interest rate of 18.5 per cent, payable
by card holders on balances that are unpaid after 62 days, was a
‘competitive’ rate without identifying a basis for comparing this rate.
Coles Myer did not accept that its advertising was
misleading. However, Coles Myer has taken immediate steps to address
ASIC’s concerns and, under the Enforceable Undertaking, Coles Myer will:
- withdraw relevant advertising;
- review the advertising of the card and its benefits;
- incorporate more prominent disclosure of
any limitations in future advertising of fuel price discounts and the
10 per cent discount benefit associated with using the credit card
facility; and - provide corrective notification to cardholders.
