The cynical pricing trick leaving you permanently ripped off

Although it was all my own fault, I couldn’t help but stand there and curse Michael O’Leary. I am not a regular user of his airline, Ryanair, and I thought I’d booked my flight to Aarhus in Denmark carefully and correctly, paying an additional fee for everything that would make a journey from Stansted in the middle of the school holidays more comfortable – fast track this, priority that, extra legroom, seat selection, the lot. It’s not that I’m a diva, although I admit that I do have those tendencies. It’s just that I find airports anxiety-inducing places, and I fully accept that I have to pay more to ease my stress. But there I was, at the self-check-in terminal, and I was rejected by the machine. Although I’d booked a priority ticket, I’d mistaken “hold” bags for “cabin” bags, and I now had to pay an additional fee for each of our three bags. By the time we got back to Stansted, I’d paid a total of almost £250 in baggage charges, on top of all the extras to the actual cost of the flight for which I’d paid at the time of booking. The blame was squarely on me, not on Mr O’Leary, and the only mitigation I had was my unfamiliarity with the Ryanair website and booking process. I know this is not a new story. O’Leary has pioneered and perfected the practice of additional charges in the 35 years that he has owned the airline, and anyone who uses Ryanair, and takes advantage of its low fares and excellent punctuality record, is well-versed in this custom, which, of course, has been replicated by other budget airlines. In fact, O’Leary has been so successful in training the public to accept surcharges that we now don’t miss a beat when we’re asked to pay a hitherto hidden extra fee. For instance, I booked a ticket online for my local (independent) cinema the other day and, when I came to pay, there was an additional £1.25 “booking fee” on top of the price of the ticket. I wasn’t selecting to get anything extra. It was simply a mandatory charge. This is a practice known as “drip pricing”, when the real cost to the consumer is more than the advertised price. OK, it was only £1.25, but why was it not consolidated in the price of my ticket? What is the logic or morality behind this, other than it seems to work for Ryanair? We used to be a nation of shopkeepers, and now we are a nation of rip-off merchants, duping the public with hidden fees and extra costs. Which brings me to news that the UK’s competition watchdog – the Competition and Markets Authority (CMA) – is launching an investigation into three British companies over allegations that they misled the public by displaying inaccurate, low prices. The regulator said it had opened investigations into Virgin Atlantic, Trainline and Red Driving School after complaints that customers had not been shown the total price up front when buying holidays, train tickets and driving lessons. This should come as welcome news to consumers, and as a warning to other businesses. Under new powers granted to it only last year, the CMA doesn’t have to go the courts; if it finds the law has been broken, it can order compensation to customers affected and can fine companies up to 10 per cent of their global turnover. Last year, the ticket reseller StubHub was ordered to refund more than 50,000 customers and pay a £900,000 fine for not showing a true ticket price upfront. In so many areas of our daily life we are now being asked to pay extra when we are not actually getting anything extra. Booking fees, cancellation fees, standing charges, service charges, even airport drop-off charges – we are now accustomed to paying not just for things, but for the privilege of buying them. And, thus conditioned, the surcharge has become a state of mind for consumers, and a business model for companies. It is not a minute too soon that the authorities have trained their sights on these practices. Andy Burnham, with his gift for recognising people’s everyday frustrations, has even weighed in, saying: “We’re putting an end to phoney bargains. If something is advertised as half price, it should actually be half price. We’re also making it as easy to leave a subscription as it is to join. These are just two of the everyday fixes we’re going to be rolling out.” The implied contract between consumer and supplier should be based on trust and responsibility. It is one of the fundaments of modern commercial life. Once that is replaced by the suspicion that we are being exploited, something more than a few quid is at stake. Honesty is replaced by cynicism, deception is regarded as a normal business practice, and, eventually, we turn into a society in which nobody believes anybody.