In the fight. Low fares carrier Jetstar isn’t automatically copping a $550,000 fine for drip pricing. Picture: Cara Gottgens/Bloomberg
VIRGIN Australia has agreed to cop a $200,000 fine for “drip pricing” but Jetstar is objecting to a much bigger penalty for a similar offence.
Late last year, the Federal Court found the airlines had not been totally transparent with customers about pricing on one occasion in Virgin Australia’s case, and twice by Jetstar.
Drip pricing occurs when the fare promoted is not the same as the one charged at the end of the transaction as a result of undisclosed “add-ons” — in the airlines’ case, booking and service fees.
The court ruled the behaviour to be misleading, deceptive and in contravention of Australian consumer law.
Jetstar is objecting to a $550,000 for “drip pricing” on its website and mobile site two years ago. Picture: News Corp AustraliaSource:News Corp Australia
Fines of $200,000 for Virgin Australia, and $550,000 for Jetstar were recommended by the Australian Competition and Consumer Commission.
The ACCC sought a larger fine against Jetstar because the low fares carrier was found guilty of drip pricing on both its main website, and mobile site, whereas Virgin Australia was caught out just the once on its mobile site.
While Virgin accepted the penalty, Jetstar resisted based on the size of the sum.
The Federal Court judge has now adjourned the matter for further consideration.
A Virgin Australia spokeswoman said given their joint submission (on a penalty) with the ACCC had been accepted, the matter for them had now concluded.
“Virgin Australia is committed to ensuring that its booking and service fee is fair and simple for consumers to understand,” said the spokeswoman.
Case closed. Virgin Australia has agreed to pay a $200,000 fine for drip pricing. Picture: Sarah Matray/News Corp AustraliaSource:News Corp Australia
“We also provide a fee-free payment option on the Virgin Australia website and mobile website.”
A Jetstar spokesman said the ruling related to the disclosure of the booking and service fee on the airline’s web and mobile sites more than two years ago.
“We want customers to clearly understand all fees and charges associated with their booking and that’s why we’ve made changes to make it clearer at every step of the booking process what charges apply.”
He was unable to comment on the matter of penalty while it was still before the Federal Court.
Choice spokesman Tom Godfrey said the case sounded some timely warning bells for consumers.
“The fact is companies are not allowed to advertise a headline price and then slowly reveal unavoidable extra fees and charges as you make your way through the online check-out,” Mr Godfrey said.
“Drip pricing makes it extremely difficult for people to compare the true cost of products. It’s unfair to consumers and it penalises companies who do the right thing.”
All Australian airlines now inform passengers who book fares online of the fees imposed for using credit cards, and offer suggestions as to how to avoid the charges.
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