The Competition and Markets Authority has initiated formal investigations into three companies—Trainline, Virgin Atlantic, and Red Driving School—as part of a regulatory effort to combat drip pricing, a practice where mandatory charges are not displayed upfront, making products appear artificially cheap.
According to the CMA, customers purchasing train tickets, coach services, holidays, or driving lessons were not presented with the total cost at the initial stage of their transactions. Emma Cochrane, executive director for consumer protection at the CMA, stated that consumers should see the final price they will pay from the outset, allowing them to make informed comparisons between offerings. The regulator indicated that it had previously warned these businesses about their pricing approaches before deciding to pursue formal investigations.
Trainline acknowledged it had been working with the CMA and announced it was implementing improvements to how certain fees are presented to customers. The company’s stock declined significantly in early trading following the announcement. Virgin Atlantic noted that mandatory fees were communicated at various points during the booking process and indicated it would cooperate with the investigation. Red Driving School stated its commitment to customer transparency and engagement with the regulator.
The CMA is utilizing consumer protection powers that were granted recently, which enable the authority to determine violations of consumer law without court involvement. Penalties available to the regulator include ordering compensation to affected customers and imposing fines of up to 10% of a company’s global turnover. The CMA has previously used these powers against other businesses, including ordering refunds and penalties against StubHub and fining the AA while requiring it to repay learner drivers.
Government officials have also prioritized addressing such practices, with commitments to tackle what have been characterized as unfair business methods affecting consumer costs.
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