01.ACCC to investigate airline “drip pricing”
CHOICE has welcomed the Australian Competition and Consumer Commission’s announcement today that it will be examining the use of “drip pricing” across a range of travel industries, including airlines and hotels.
“Drip pricing” is used to suck in consumers by advertising cheap headline rates, before automatically adding on fees and charges such as credit card surcharges, travel insurance, car hire, checked baggage and carbon offsets when you try to pay online.
In a review earlier this year, CHOICE found many airlines bombard you with lengthy forms, which are often pre-filled to include unnecessary optional extras.
“Consumers should be able to book and pay for an advertised rate without pre-selected extras and credit card surcharges slapped on top during the online payment process,” a spokesperson for CHOICE said.
Under Australian Consumer Law, you are entitled to see the total price, inclusive of any additional fees, charges or taxes.
Another problem with auto-selected services is they dissuade consumers from comparing products - which is of particular concern when it comes to travel insurance. By auto-selecting travel insurance, you don’t actually know if the cover provided by the airline is right for you, or whether you should look elsewhere.
“It’s worth checking your options before you commit - after all, the one-size-fits-all policies that some airlines offer may not cover you for pre-existing issues, if you’re over a certain age, or in other circumstances.”
If you are concerned about being hit with extra fees and charges when using your credit card to pay for products and services, join CHOICE’s Take Charge campaign.