Trainline, Virgin Atlantic and RED investigated over drip pricing
The Competition and Markets Authority has launched investigations into three major companies over concerns they failed to show mandatory fees upfront. Here is what we know about the allegations and what could happen next.
Three well-known brand names — Trainline, Virgin Atlantic and RED Driving School — are under formal investigation by the UK's consumer watchdog over allegations that they have not been showing full prices to customers upfront.
The Competition and Markets Authority (CMA) is looking into whether the trio engaged in what is known as 'drip pricing'. If you are unfamiliar with the practice, it is an illegal tactic where mandatory fees are left out of the headline price you see when you first begin booking, only to be added on later in the process.
Let us look at the specific allegations against each firm. In the case of Trainline, the CMA said it observed extra fees of up to £2.79 being added to headline train fares, as well as charges of up to £1.50 for coach bookings. This is not the first time Trainline has faced scrutiny over its charges; back in 2023, the Office of Rail and Road said Trainline and six other third-party train ticket sellers were not being upfront about fees.
When it comes to Virgin Atlantic, the regulator is looking at package holidays. The CMA is investigating whether mandatory resort fees and local taxes were left out of the upfront prices presented to travellers. These fees vary, but the CMA pointed out that they can run into hundreds of pounds, significantly increasing the overall price of a trip.
Meanwhile, RED Driving School is under scrutiny over whether mandatory booking fees and digital fees were excluded from the upfront prices shown to people booking driving lessons. The watchdog noted that those fees could reach more than £7 per lesson. This follows action earlier this year, when the CMA ordered two other driving schools to refund over 80,000 customers after failing to disclose the total price upfront online.
Emma Cochrane, the CMA's executive director for consumer protection, explained the watchdog's position clearly: "The first price customers see should be the price they pay. 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."
For their part, all three businesses insist they are committed to transparent pricing and will cooperate with the investigation. A spokesperson for Virgin Atlantic Holidays said the company takes its responsibilities "incredibly seriously", adding: "we always want to ensure they can make an informed decision when booking a holiday with us. Mandatory fees are indicated at multiple stages throughout the booking journey. We are reviewing the points raised by the CMA carefully and will cooperate fully with its investigation."
A Trainline spokesperson said the company is "committed to offering customers a transparent booking experience with clear pricing and genuine value," noting that it has proactively engaged with the CMA over several months and is taking steps to enhance how fees are displayed. RED Driving School said it was disappointed to be included in the wider investigation, stating that "Red Driver Training always values both transparency and consumer satisfaction in all of our interactions with our customers" and takes its consumer law obligations with the utmost focus and seriousness.
Consumer group Which? has urged the CMA to make full use of its enforcement powers, pointing out that each firm had previously received a warning advisory letter. Sue Davies, head of consumer rights policy at Which?, said that following comments made by the Prime Minister last week that unfair pricing practices have no place in the economy, this probe sends a clear message to businesses to play by the rules when household budgets are under pressure.
In terms of what happens next, the CMA holds significant authority. Since last year, the watchdog has had the power to rule that consumer laws have been broken without needing to take companies to court. If it concludes that the law was breached, it can fine the firms or order them to pay compensation to affected customers.
What we do not know yet is how long the investigation will take to reach a conclusion, or whether any fines or customer payouts will ultimately be ordered. I will be following this one — check back for updates as the regulator progresses its inquiry.
Sources
- bbci.co.uk
- skynews.com
- cityam.com
- yorkshirepost.co.uk
- gov.uk
