Watchdog opens investigation in to Trainline and Virgin Atlantic over sneaky pricing tactics

A BIG investigation has been launched into three websites including Trainline and RED Driving School for drip pricing. The Competitions and Markets Authority (CMA) has announced a major crackdown on online pricing practices including drip pricing. Investigations have been opened into Trainline, Virgin Atlantic and RED Driving School. Consumers could get compensation if the CMA finds that these firms have broken the law. Sign up for the Money newsletter Thank you! Trainline is being investigated over whether all mandatory fees have been included in the upfront price displayed to consumers buying train and coach tickets in advance on the Trainline app and website. For train travel the CMA found transactions had booking fees ranging from £0.59 to £2.79. Meanwhile, for coach bookings there was a £1.50 booking fee. Both are costs that can add up quickly for frequent travellers. RED Driving School is being investigated over how a mandatory booking fee and digital fee have been displayed for people booking driving lessons. The watchdog will focus on whether these £7 per booking fees have been included in the total upfront price. Most read in Money Meanwhile, the CMA is investigating Virgin Atlantic over whether mandatory resort fees and local taxes were included in the upfront prices shown to customers when they bought a package holiday. The fees vary but can total hundreds of pounds and significantly increase the price of a holiday. The investigations are part of a wider CMA clampdown on misleading pricing practices, including where mandatory charges are separated from the headline price. It is also investigating when charges are added later into the buying process, which is known as drip pricing. These practices can impact competition between businesses as firms using drip pricing may appear to be cheaper than a competitor, so they attract more customers. The three firms have all been sent advisory letters as part of the CMA’s first push to use its new enforcement powers. These powers allow the CMA to fine companies for breaches and secure refunds. The letters put the businesses on notice and remind them of their obligations under consumer law. But the CMA is still concerned about their pricing practices after ongoing monitoring. The watchdog has not yet decided whether these firms broke the law. If it finds that has been the case then it can order businesses to pay compensation to affected customers as well as fining the companies up to 10% of their global turnover. Emma Cochrane, executive director for consumer protection at the CMA, said: “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. “Clear pricing helps people compare offers confidently and choose the option that works best for them.” It’s not the first time the CMA has opened an investigation into firms’ pricing tactics. In November it launched an investigation into eight retailers including Wayfair, AA Driving School and StubHub. The AA and BSM driving schools and ticketing website StubHub were hit with fines and will refund customers after being investigated over their use of drip pricing. Meanwhile, Marks Electricals was found guilty of pre-selecting and charging customers for extra services without their express agreement. Comment now