Calls for crackdown on sneaky ‘drip pricing’

(Newshub.)
(Newshub.)

A campaign has been launched by Consumer NZ to end what it calls is the 'sneaky' practice of drip pricing.

Drip pricing is the term that describes when the advertised headline price is not what the consumer ends up paying after mandatory charges and credit card fees are added on.

It's a practice used by airlines, travel agents and ticket sellers and one which has been cracked down on by overseas regulators.

On its website, Consumer NZ highlights an airfare to Melbourne that's advertised at $139. But when you add on a booking fee of $15 plus an $8 credit card fee, the total is $162.

Another example cites a holiday packaged advertised for $699 actually costing $770 after service fees are added.

In Australia, two airlines have been slugged with hefty fines after being taken to the Federal Court over drip pricing.

Virgin Airlines copped a $200,000 fine and Jetstar a $500,000 fine.

Jetstar in New Zealand has already reached an agreement with the Commerce Commission over the practice of "opt-out" pricing.

The Jetstar website used a practice of pre-selecting optional extras, such as luggage, seal selection and travel insurance.

The Commerce Commission took the view that the practice was misleading.

‘Drip Pricing’ was also identified by the Commission as a 'high risk" consumer issue at the end of last year.

Newshub.

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