Trainline, Virgin Atlantic and RED Driving School investigated over ‘drip pricing’

Trainline, Virgin Atlantic and RED Driving School are being investigated by the consumer watchdog over concerns they are not showing full prices upfront to customers.

The Competition and Markets Authority (CMA) is examining whether the three companies engaged in so-called ‘drip pricing’, which is an illegal practice where mandatory fees are not included in the headline price shown to customers.

If the CMA concludes that the firms have broken the law, it can fine them or order them to compensate customers.

Trainline and Virgin Atlantic said they were committed to transparency for customers and would engage fully with the CMA.

In the case of Trainline, the CMA said it observed fees of up to £2.79 being added on to headline train fares, and up to £1.50 for coach bookings.

“Both are costs that can add up for frequent travellers,” the CMA said.

Trainline has been accused of drip pricing before. In 2023, the Office of Rail and Road said it and six other third-party train ticket sellers were not being upfront about fees.

Virgin Atlantic is being investigated to see whether mandatory resort fees and local taxes were included in the upfront prices shown to customers buying package holidays. The CMA said these fees vary but can go up to hundreds of pounds, significantly increasing the cost of a holiday.

And the watchdog is looking into whether RED Driving School included mandatory booking fees and digital fees in the upfront price shown to people buying driving lessons. The CMA said the fees could be more than £7 per lesson.

Earlier this year, the CMA ordered two other driving schools to give refunds to more than 80,000 customers after they did not disclose the total price for lessons upfront during the online booking process.

Emma Cochrane, the CMA’s executive director for consumer protection, said: “The first price customers see should be the price they pay.

“At a time when many households are watching every pound they spend, it is important that people are not surprised by extra fees when booking train and coach tickets, holidays or driving lessons.”

A spokesperson for Virgin Atlantic Holidays said it takes its responsibility to customers “incredibly seriously”, adding: “we always want to ensure they can make an informed decision when booking a holiday with us.

“Mandatory fees are indicated at multiple stages throughout the booking journey. We are reviewing the points raised by the CMA carefully and will cooperate fully with its investigation.”

A Trainline spokesperson said the company was “committed to offering customers a transparent booking experience with clear pricing and genuine value.

“We’ve proactively engaged with the CMA over several months and we are taking proactive steps to enhance how certain fees are presented to our customers.”

RED Driving School has been contacted for comment.

Since last year, the CMA has had the power to rule that consumer laws have been broken without having to take businesses to court.

Consumer rights group Which? said the CMA should not hesitate to use these powers, “especially after each firm has already received a warning advisory letter”.

Sue Davies, head of consumer rights policy at Which?, said: “Following comments made by the Prime Minister last week that unfair pricing practices have no place in our economy, this move sends a clear message to other businesses to follow the rules.

“At a time when household budgets are under strain, consumers must have confidence that businesses aren’t there to rip them off and that the regulator is willing to step in to protect their rights.”