OFT to crack down on misleading pricing

The Office of Fair Trading today pledged to crack down on misleading pricing by airlines and travel companies.

ABTA has agreed with the OFT that it will ensure that its members will include fuel supplements as well as all non-optional costs of a fixed amount in their basic advertised prices in all advertising including brochures and websites within the next three months.

ABTA believes the move by the OFT will lead to less confusion for consumers.

The association’s Code of Conduct requires members to show clear, transparent pricing.

But more recently, the law has not been enforced on airlines and companies outside ABTA, putting members at a commercial disadvantage, according to the association. 

The issue has caused concern mainly due to budget airlines advertising low lead-in prices on websites which exclude add-ons such as fuel supplements.

ABTA chief executive Mark Tanzer said: “We are very supportive of the OFT’s move today, as it should lead to a level playing field within the travel industry.

“We will carry out all necessary steps to regulate our members to achieve a better environment for consumers in terms of transparent pricing, but the key to success here is compliance from the airlines and the OFT’s ability to enforce the law.”

ABTA said it will be monitoring the progress of the complaints made to the OFT.

The OFT, issuing the warning to holiday and travel suppliers to ensure they are not misleading consumers about prices, said it is aware that certain fixed non-optional costs are frequently excluded from basic advertised holiday and travel prices.

These include fuel supplements which can add up to £65 per person to the price of a flight or holiday.

When the extra costs are added on the price is significantly higher than advertised.

In one example, the price of a flight from the UK to Barcelona advertised at £19.99 was more than double when all fixed non–optional costs were included, the OFT said.

The OFT now expects all holiday and travel suppliers, including non-ABTA members and airlines, to make sure they include all fixed non-optional costs in their basic headline prices so that they do not mislead consumers.

Failure to comply in future will likely result in the OFT taking enforcement action.

In addition to ABTA, the OFT is to contact the Federation of

Tour Operators, the Association of Independent Tour Operators, the

International Air Transport Association and the European Low Fares

Airline Association, warning them that they should ensure their members do not mislead consumers about prices.

OFT chief executive John Fingleton said: “Giving misleading price indications to consumers makes it very difficult for them to compare prices offered by different operators. It distorts consumer choice and competition and undermines consumer confidence in the market.”

The OFT said it welcomed the action taken by ABTA, and will monitor the situation, taking enforcement action where necessary against any airlines, tour operators or travel suppliers that fail to comply with the law.

by Phil Davies