Have you ever gone online to buy a ticket to a gig, only to find yourself paying a considerable amount more than the advertised price? If so, you may have been a victim of ‘drip pricing.’ It’s a practice that’s not uncommon amongst online ticket sellers including airlines and event organisers, and one that could land offending companies in hot water after the corporate watchdog promised to crack down on drip pricing this week.
Drip pricing is when a company attracts consumers with an advertised price that is then increased considerably by additional surcharges before the point of purchase. Earlier this week, the chairman of the Australian Competition and Consumer Commission (ACCC) Rob Sims confirmed that drip pricing will be targeted by the Commission in 2014. In a speech outlining the ACCC’s main compliance goals, Sims criticised the practice as one that causes “both competition and consumer detriment”.
“Drip pricing is where the price you end up paying is very different from the price that enticed you to begin the transaction,” said Sims. Legal action will be taken by the ACCC for companies using drip-pricing to sell their products with Sims warning they would “probably be taking action in the Federal Court reasonably soon”. The head of the corporate watchdog explained that the method is not only detrimental for consumers and competition, but could also be in breach of laws preventing misleading and deceptive behaviour. “[Drip pricing] involves a lack of transparency which may mislead consumers, and it can also make it difficult for businesses to compete on a level playing field” he said.
Australian airlines responded to the statements made by Sims by defending their booking processes. Spokesmen from Qantas and subsidiary airline Jetstar denied that their booking processes contravened Australian Consumer Laws. “Optional extras customers may choose are displayed clearly and prominently in the booking process,” they explained. Budget airline Tigerair also rejected suggestions they may be in breach of consumer law, saying, “Tigerair ensures that it complies with all relevant regulatory requirements including those relating to component pricing.”
The comments by Sims come ahead of his address to the Committee of Economic Development Australia (CEDA) this Friday. His speech will outline the key focuses of the ACCC for 2014. Other companies of interest to the ACCC in 2014 include supermarket chains Coles and Woolworths, over their fuel discount offers. After receiving a number of complaints over the fuel discounts offered by the 2 retail giants that exceed the cap of 4 cents per litre, the ACCC are investigating the validity of such offers.
If you think a company may be in breach of Australia’s Consumer Laws you can write a complaint to the ACCC via their website www.accc.gov.au. If you have a legal issue or query, contact GI & Sanicki Lawyers today.
Thanks to our intern Joshua Butler for this great article.