Watchdog Launches Drip Pricing Probes into Trainline, Virgin Atlantic, Red Driving School
CMA investigates mandatory fees not shown upfront for tickets, holidays, and lessons; firms previously warned.
Sarah Connor
The UK competition watchdog has launched investigations into The Trainline, Virgin Atlantic, and Red Driving School.
Emma Cochrane, Executive Director for Consumer Protection at the CMA, stated that 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 and now opens formal investigations.
The CMA's investigation into The Trainline specifically targets mandatory fees for train and coach tickets. Observed additional fees ranged from 50p to £2.79.
For Virgin Atlantic, the focus remains on mandatory resort fees and local taxes applied to package holidays. Red Driving School faces scrutiny for potentially not including mandatory booking and digital fees in the upfront prices for driving lessons.
The CMA claims additional fees, ranging from 59p to £2.79, including a £1.50 booking fee for coach journeys, were seen in transactions. Mandatory charges were reportedly separated from the headline price or added later in the buying process, a practice known as drip pricing.
A mandatory booking fee and a digital fee, typically £7 per booking, were displayed for driving lessons, according to the CMA. Customers had reportedly not been shown the total price upfront when purchasing train and coach tickets, holidays, or driving lessons.
Trainline is committed to offering customers a transparent booking experience with clear pricing and genuine value.
The firms under investigation reportedly received 'advisory letters' previously. Earlier this year, the CMA ordered StubHub to pay nearly £1.5 million in refunds and penalties for similar drip pricing infringements.
The CMA can order compensation and impose fines of up to 10% of global turnover for law infringements. Shares in The Trainline fell by approximately 15% to 206.1p in early trading on Wednesday following the announcement.
A Trainline spokesman stated that Trainline is committed to offering customers a transparent booking experience with clear pricing and genuine value. He added that the company has proactively engaged with the CMA over several months and is taking proactive steps to enhance how certain fees are presented to customers, and will continue engaging with the CMA to address their questions.
The Office of Rail and Road previously accused Trainline of drip pricing in 2023. It stated that Trainline and six other third-party train ticket sellers were not being upfront about fees.
A Virgin Atlantic Holidays spokesman affirmed that the company takes its responsibility to customers incredibly seriously and always wants to ensure they can make an informed decision when booking a holiday. The Virgin Atlantic Holidays spokesman also stated that mandatory fees are indicated at multiple stages throughout the booking journey.
Consumers affected by illegal practices may be eligible for compensation. Sue Davies, Head of Consumer Protection Policy at Which?, stated that the CMA shouldn’t hesitate to use its new consumer enforcement powers to fine any firms that have broken the rules, especially after each firm has already received a warning advisory letter.
Davies added that following comments made by the Prime Minister last week, this move sends a clear message to other businesses to follow the rules.