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

The UK’s competition watchdog has launched an investigation into three companies over concerns that customers were not shown the total upfront price when buying train and coach tickets, holidays or driving lessons.

The Competition and Markets Authority (CMA) will probe the activities of Trainline, Virgin Atlantic and RED Driving School as part of a wider clampdown on misleading pricing practices. The crackdown specifically targets mandatory charges that were separated from the headline price or added later, in a method otherwise known as ‘drip pricing’.

All three firms have been issued advisory letters as part of the CMA’s first consumer protection drive under its new enforcement powers.

“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,” Emma Cochrane, executive director for consumer protection at the CMA, said.

Cochrane added that unclear pricing would make it more difficult for customers to compare offers confidently.

“The first price customers see should be the price they pay,” she added.

Virgin Atlantic to be investigating for adding ‘hundreds’ onto holiday costs

The Trainline investigation will centre on the inclusion of mandatory fees in upfront prices after the CMA said it “observed” transactions with fees ranging from 59p to £2.79.

The firm said it has “proactively engaged with the CMA over several months” and was taking steps “to enhance the presentation of certain fees”.

Virgin Atlantic – the airline founded by Sir Richard Branson in 1984 – will also face scrutiny over whether mandatory resort fees and local taxes were included in the upfront prices for customers buying package holidays.

“These fees can vary but can cost hundreds of pounds and significantly increase the price of a holiday,” the regulator said.

A Virgin spokesperson said it was reviewing the points raised by the CMA carefully and would cooperate fully with its investigation.

Meanwhile, RED Driving School, which is one of the largest national driver education providers in the UK with a network of over 1,700 franchised driving instructions, will be investigated over whether its mandatory booking fee and digital fee were displayed to those booking lessons.

The new round of action follows the CMA being handed new direct enforcement powers that will allow it to decide whether key consumer protection laws have been breached without taking the business to court.

Earlier this year it issued the first round of fines under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), which also concerned ‘drip pricing’ activity.

The CMA fined tickets seller Stubhub £889,200 after some customers were required to pay mandatory delivery and service fees when purchasing tickets for concerts and sporting events, which were added at the final stage of the checkout process.

The watchdog said it is at the beginning of its new investigation and has reached no conclusions whether the firms broke the law.