Trainline and Virgin Atlantic face watchdog’s ‘drip pricing’ probe

The UK's competition watchdog, the Competition and Markets Authority (CMA), has launched an investigation into three companies over accusations that customers were not properly shown the total upfront cost when purchasing train and coach tickets, holidays, or driving lessons. The CMA is focusing on Trainline, Virgin Atlantic, and RED Driving School as part of a broader crackdown on misleading pricing practices.

The three companies have each received advisory letters as part of the CMA's first consumer protection initiative under its new enforcement powers.

Emma Cochrane, the CMA's executive director for consumer protection, emphasized that it is crucial for customers to be aware of all potential fees before making a purchase, especially during a time when households are closely monitoring their spending. She stated that "at a time when many households are watching every pound they spend, it is important that people are not surprised by extra fees when booking train and coach tickets, holidays or driving lessons."

Cochrane added that unclear pricing can make it more difficult for consumers to confidently compare offers, and that the first price they see should be the price they ultimately pay. The Trainline investigation will focus on the inclusion of mandatory fees in the initial prices, with the CMA observing transactions that had fees ranging from 59p to £2.79.

Virgin Atlantic will also be under scrutiny for allegedly adding mandatory resort fees and local taxes to the upfront prices of customers who purchase package holidays. The CMA warns that these fees can vary significantly, potentially adding hundreds of pounds to the overall cost of a holiday.

RED Driving School, one of the UK's largest driver education providers with over 1,700 franchised locations, will be investigated regarding its mandatory booking fee and digital fee. The CMA wants to determine if these fees were properly disclosed to customers when they booked lessons. The CMA's new round of action follows its recent use of the Digital Markets, Competition and Consumers Act 2024 (DMCCA) to issue the first set of fines under its new direct enforcement powers.

One of those cases involved the ticket seller Stubhub, which was fined £889,200 for customers being required to pay mandatory delivery and service fees when purchasing tickets for concerts and sporting events, with these fees added at the final stage of the checkout process.