Trainline, Virgin Atlantic and RED Driving School Face CMA Drip Pricing Investigation

• The Competition and Markets Authority (CMA) has launched three new investigations into firms that allegedly engage in drip pricing practices.
• Trainline, Virgin Atlantic, and RED Driving School are among the companies being investigated for presenting mandatory fees separately from the headline price or adding them later in the buying process.
• If found guilty of engaging in drip pricing practices, these companies could face fines up to 10% of their global turnover and be ordered to pay compensation to affected customers.

The first price customers see should be the price they pay.

The Competition and Markets Authority (CMA) has launched three new consumer protection investigations into firms that allegedly engage in drip pricing practices. Trainline, Virgin Atlantic, and RED Driving School are among the companies being investigated for presenting mandatory fees separately from the headline price or adding them later in the buying process. This practice can lead to unexpected costs for consumers and make it difficult for them to compare prices confidently.

The CMA has been monitoring these firms' pricing practices and sent 'advisory letters' as part of its first consumer protection drive using new enforcement powers. However, despite these warnings, the authority remains concerned about their compliance with consumer law.

Drip pricing is a misleading pricing practice where mandatory charges are separated from the headline price or added later in the buying process. This can impact competition between businesses and leave consumers facing unexpected costs. The CMA has been cracking down on such practices, including fines and refunds for companies that engage in drip pricing.

In 2023, the CMA launched a Clear Pricing campaign to help businesses make sure their prices are clear and upfront. The campaign provides a practical 3-step checklist and detailed guidance to ensure compliance with consumer law.

The CMA's investigation into Trainline, Virgin Atlantic, and RED Driving School may set a precedent for other businesses in the sector. If found guilty of engaging in drip pricing practices, these companies could face fines up to 10% of their global turnover and be ordered to pay compensation to affected customers.

Lawyers advising clients on online booking platforms should be aware of the potential risks associated with drip pricing practices. The CMA's enforcement action highlights the importance of clear pricing and transparency in consumer-facing businesses.

Lawyers advising clients on online booking platforms should be aware of the potential for fines and refunds if they engage in drip pricing practices, which can lead to unexpected costs for consumers. The Competition and Markets Authority's investigation into Trainline, Virgin Atlantic, and RED Driving School may set a precedent for other businesses in the sector.

Source: Original reporting via GOV.UK