Britain’s competition regulator has launched investigations into Trainline, Virgin Atlantic and Red Driving School over concerns customers were not shown full prices upfront.
The Competition and Markets Authority’s (CMA) investigation into Trainline will focus on whether all mandatory fees were displayed upfront to travellers buying train and coach tickets in advance, on its app and website.
The CMA said it saw transactions with additional fees ranging from 59p to £2.79, with a £1.50 booking fee for coach journeys.
Consumers affected could get compensation if it is found the companies broke the law, the regulator said.
The investigations form part of a wider clampdown by the regulator over misleading pricing practices.
It said this included practices where mandatory charges were separated from the headline price or added later in the buying process, known as drip pricing.
Investigations: Britain’s competition watchdog has launched investigations into Trainline, Virgin Atlantic and Red Driving School over drip pricing concerns
Shoppers could have ended up facing unexpected costs or have to calculate the total cost of a purchase themselves.
The CMA said: ‘Such practices can also impact competition between businesses, as a firm using drip pricing may falsely appear to be cheaper than a competitor and attract more customers.’
The investigation into Virgin Atlantic will look into mandatory resort fees and local taxes for package holidays.
Red Driving School is being investigated over how a mandatory booking fee and a so-called digital fee, typically £7 per booking, were displayed for driving lessons.
All firms under investigation were sent ‘advisory letters’ as part of the CMA’s first consumer protection drive using its new enforcement powers. The letters put the businesses on notice and reminded them of their obligations under consumer law, but the CMA said it remained concerned about their pricing practices following ongoing monitoring.
Emma Cochrane, executive director for consumer protection at the CMA, said: ‘Clear pricing helps people compare offers confidently and choose the option that works best for them.
‘Unexpected mandatory charges make this much harder, which is why the CMA initially put these firms on notice over concerns about their pricing practices and is now opening formal investigations.’
A Trainline spokesman said: ‘Trainline is 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.
‘We will continue engaging with the CMA to address their questions.’
A Virgin Atlantic Holidays spokesman said: ‘We take our responsibility to customers incredibly seriously and 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 co-operate fully with its investigation.’
This is Money contacted Red Driving School for comment.
Sue Davies, head of consumer rights policy at Which?, said: ‘The CMA shouldn’t hesitate to use its new consumer enforcement powers to fine any firms that have broken the rules – especially after each firm has already received a warning advisory letter.’
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