19 June 2014
CHOICE welcomes the news that the ACCC is cracking down on misleading drip pricing but says legal action is only the first step towards fair airfares for Australian consumers.
Today the ACCC has announced that they have commenced legal action against Virgin and Jetstar, alleging that the airlines engaged in misleading or deceptive conduct and made false or misleading representations about airfares.
The ACCC alleges that the airlines 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.” says CHOICE spokesperson 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 ACCC legal action, if successful, will force companies to advertise the true cost of a flight. It won’t stop companies charging outrageous prices to pay by credit card but it could force them to include the charge in the headline price.
Australian consumers remain frustrated by unreasonable credit card surcharges despite the RBA ruling that the fees should be limited to the reasonable cost of a transaction.
“For too long, Australians purchasing flights have been slugged by a fee per passenger to pay using their credit card, the most convenient and commonly accepted way to pay.
There is no justification for companies like Jetstar to charge an $8.50 booking fee per passenger, per flight.”
A CHOICE review earlier this year found consumers flying Qantas from Sydney to Melbourne can still pay a staggering 523% more than the average merchant service fee, similar to the 568% they were paying back in March 2013.