CMA launches new consumer protection investigations into RED Driving School, Trainline and Virgin Atlantic over online pricing.
The Competition and Markets Authority (CMA) has begun three consumer protection investigations into leading firms, following concerns that online customers were not shown the total price upfront when buying train and coach tickets, holidays or driving lessons.
The new investigations are part of a wider CMA effort to tackle misleading pricing practices, including where mandatory charges are separated from the headline price or added later in the buying process – a practice known as drip pricing.
Such practices mean that consumers face unexpected costs or must calculate the true cost for themselves. This behaviour can also impact fair competition between businesses, as a firm using drip pricing may appear, falsely, to be cheaper than a competitor and so attract more customers.
The CMA was granted new consumer protection powers under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), which came into force last year. Last November, it announced investigations into eight businesses related to their online pricing practices – AA Driving School, Appliances Direct, BSM Driving School, Gold’s Gym, Marks Electrical, StubHub, viagogo and Wayfair. It wrote to 100 other businesses raising concerns about their uses of sales and fees tactics.
In the new investigations, the three firms have all been issued with advisory letters outlining the following concerns:
RED Driving School is being investigated over a mandatory booking fee and ‘digital’ fee, of £7 or more per booking, and whether these have been included in the total upfront price.
Trainline is being investigated for mandatory fees on the Trainline website and app, ranging from 59p to £2.79 for train travel and £1.50 for coach travel, which add up for frequent travellers. Again, the issue is whether these have been included in the total upfront price.
Virgin Atlantic is being investigated for whether mandatory resort fees and local taxes are included in the total upfront price for customers of package holidays. These fees vary but can amount to hundreds of pounds.
The three investigations are all at preliminary stages. Where the CMA finds a business has broken the law, it can order them to pay compensation to customers and issue a fine for up to 10% of global turnover.
Emma Cochrane, Executive Director for Consumer Protection at the CMA, says: ‘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. 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. The first price customers see should be the price they pay.’
Photo: David Syphers / Unsplash
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