Jetstar, Virgin taken to court over 'drip pricing'

Australia’s consumer watchdog is taking Virgin and Jetstar to court over allegations of deceiving customers with additional fees and charges.

virgin_aap.jpg

(AAP)

The Australian Competition and Consumer Commission (ACCC) has lodged action against the two airlines in the Federal Court following an investigation into alleged “drip pricing”.

In a statement issued today, the ACCC referred to drip pricing as a process where headline prices are advertised at the beginning of an online purchase and then additional fees and charges are incrementally disclosed.

"This can result in consumers paying a higher price than the advertised price or spending more than they realise," chairman Rod Sims said.

"...The ACCC is concerned about advertising that draws consumers into an online purchase process but fails to provide sufficient upfront disclosure of additional fees and charges that are likely to apply."

The ACCC stated that the additional fees should be disclosed upfront, adding that imprecise pricing can make it hard for other airlines to compete.

More than 45,145 people have signed a change.org petition rallying against credit card surcharges imposed by Jetstar, which have been labelled as "ridiculous".

The petition, lodged by Klaus Bartosch last year, stated that the fees should be dropped following reforms introduced by the Reserve Bank.

"We're fed up with paying huge fees just for the luxury of paying them for our flights," it stated.

The ACCC is seeking pecuniary penalties, declarations, injunctions, corrective advertising and costs against each airline.

The matter is expected to come before the court in August.


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By Stephanie Anderson


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