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Federal Court Grounds Airlines For Drip Pricing

November 17, 2015 Business News No Comments Print Print Email Email

Consumer advocacy group CHOICE has welcomed the Federal Court’s decision against Jetstar and Virgin for engaging in drip pricing on their mobile sites that saw some customers unable to redeem advertised ticket prices.http://www.tourismlegal.com.au/

The ACCC launched its legal action against the airlines last year arguing they failed to disclose booking and service fees that made flights more expensive than the headline price.

“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 checkout,” says CHOICE Head of Media Tom Godfrey.

“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. However, the Court didn’t find that Virgin had engaged in misleading conduct on its website.

“The Federal Court’s decision should 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.

“The decision will come as a double blow to the airlines as it lands in the wake of the Federal Government’s decision last month to enforce a ban on excessive credit card surcharges, which Jetstar and Virgin have been flying high on for years.

“It seems the tap is finally being turned off on the dodgy mobile fees and charges that have plagued consumers at the checkout.

“For too long Australians purchasing flights have faced dodgy pricing tactics.”

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