Rishi Sunak hints the Government could crackdown on ‘junk fees’ that plague shoppers who buy concert tickets, flights, car hire and hotels online
- The PM said he is looking at the ‘harmful’ tactic to see if ‘further action’ is needed
Rishi Sunak has hinted he will stop firms adding unavoidable extra charges at online checkouts in a crackdown on ‘junk fees’.
The problem is commonly seen when booking concert tickets, flights, car hire and hotels.
Signalling an attack on the practice, called ‘drip pricing’, the Prime Minister said he is looking at the ‘harmful’ tactic to see if ‘further action’ is needed.
The Department for Business and Trade said it is about to launch a consultation to stamp out what many view as underhand. It is part of a wider change in the law, including efforts to crack down on firms that automatically renew annual fees.
It mirrors US legislation championed by President Joe Biden in the planned ‘Junk Fee Bill’.
Signalling an attack on the practice, called ‘drip pricing’, the Prime Minister said he is looking at the ‘harmful’ tactic to see if ‘further action’ is needed
Mr Sunak said: ‘The Department for Business and Trade (DBT) are looking into this issue of drip pricing to just get a sense of how widespread and how damaging it might be.’
Concerns about drip pricing, also known as partition pricing, were flagged up by the Competition and Markets Authority (CMA) watchdog last year. The Government is looking at giving the CMA powers to impose legal bans, with fines, on the tactic.
Examples include Ticketmaster charging an extra £7 service charge and processing fee of £2.95 on top of the £70 ticket for Abba Voyage in London.
Airline Ryanair encourages customers to buy a barrage of ‘extras’, such as seat selection fees of £8 to £20 and bag fees for anything other than a small holdall, adding £20 to £50.
Rocio Concha, of consumer champion Which?, said: ‘Drip pricing is an underhanded way of squeezing extra cash out of consumers and is particularly concerning during a cost of living crisis, when it’s more important than ever for shoppers to be able to stick to a budget.’
A DBT source said: ‘We’re expecting a consultation to go out on this at some point this year. We know that harmful drip pricing practices take place in a number of sectors, including retail, hospitality, entertainment, transport and communication.’
