In a bid to address the pervasive issue of concealed online charges, the Government is considering regulatory changes aimed at enhancing transparency in price displays. Recent research findings reveal the widespread prevalence of this practice, prompting the Department for Business and Trade (DBT) to take action.
Cracking Down on Drip Pricing
The Department for Business and Trade (DBT) has unveiled plans to combat hidden fees that often catch online consumers off guard. This initiative comes in response to research confirming the extensive use of what’s known as “drip pricing.” This strategy involves initially advertising only a portion of a product’s price while concealing obligatory fees, ultimately inflating the final cost.
According to the DBT, this deceptive tactic has been adopted by 54% of providers in the entertainment industry, climbing to 56% in the hospitality sector and a staggering 72% across transport and communication sectors. The financial burden on UK consumers due to this practice stands at a substantial £1.6 billion annually.
Consultations on the Horizon
The Government intends to initiate consultations to explore potential enforcement measures. Prime Minister Rishi Sunak previously hinted at taking action on this issue back in June, and now, it appears to be gaining momentum.
The DBT is seeking public input on how best to respond to drip pricing, including the possibility of categorizing it as an unfair commercial practice, thereby prohibiting it under the Digital Markets, Competition and Consumers Bill. The aim is to ensure that information about mandatory fees is presented transparently to consumers from the outset of the purchasing process.
Labour has previously advocated for similar changes to combat this issue.
Cracking Down on Fake Reviews and Simplifying Food Labeling
In addition to addressing hidden online fees, the Government is launching consultations on preventing fake reviews online, potentially adding this practice to the list of prohibited commercial practices.
Furthermore, plans are in place to simplify food labeling, following a review by the Competition and Markets Authority (CMA). The DBT has proposed reforms to the price marking order, ensuring the consistent application of unit pricing, including during promotions and special offers.
Business and Trade Minister Kevin Hollinrake expressed optimism about these measures, emphasizing their importance in helping consumers make informed decisions. He also highlighted the need to strike a balance that benefits businesses without overburdening them while safeguarding consumers’ financial interests.
As the Government takes steps to address these issues, consumers can anticipate a more transparent and consumer-friendly online shopping experience.