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Airlines Drip Pricing Fines

April 21, 2016 Business News No Comments Email Email

Consumer group CHOICE has welcomed the ACCC’s request to the Federal Court to fine Jetstar $550,000 and Virgin $200,000 for engaging in drip pricing on their mobile sites, which saw some customers unable to redeem advertised ticket prices.The ACCC launched legal action against Jetstar and Virgin in 2014 after the airlines failed to disclose booking and service fees that made flights more expensive than the headline price.

“The discount airline industry prides itself on promoting ‘cheap’ tickets but as this case has shown these advertised prices can’t always be trusted,” says CHOICE Head of Media Tom Godfrey.

“The fact is companies are not allowed to advertise a headline price and then slowly reveal unavoidable extra fees and charges as you make your way through the online checkout.

“Drip pricing makes it extremely difficult for people to compare the true cost of products. It’s unfair to consumers and it penalises companies who do the right thing.”

The Federal Court found Jetstar and Virgin contravened section 18(1) and sections 29(1) of the Australian Consumer Law when they did not disclose the booking and services fees on their mobile sites until the end of the booking process. The decision was handed down in November 2015.

When the ACCC lodged the case in 2014, Jetstar’s fees were $8.50 per passenger and Virgin’s $7.70 per passenger if the ticket was bought with a credit card or through PayPal.

“Big fines will send a clear message to those companies doing the wrong thing that they cannot mislead consumers as to the true cost of products and services,” says Mr Godfrey.

“We’d like to see the tap finally turned off on the dodgy mobile fees and charges that have plagued consumers at the checkout.”

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