Jetstar, Virgin Australia fined for misleading consumers

Jetstar has been hit with a $545,000 penalty and Virgin Australia with a $200,000 fine for misleading consumers with “drip pricing”.

The practice involves advertising a headline price at the start of an online booking process and then incrementally disclosing additional fees and charges which may be unavoidable to consumers.

It has been an issue in a number of jurisdictions as well as in industries such accommodation and car sales.

Australia's  Federal Court ordered Jetstar to pay the fine for false or misleading representations about specific advertised airfares on its website in 2013 and its mobile site in 2014.

 Virgin was found to have made false or misleading representations about specific advertised airfares on its mobile site in 2014.

The judge said the penalty against Jetstar was designed to discourage similar behaviour by others.

 “The ACCC was concerned that Jetstar and Virgin’s ‘drip pricing’ conduct drew consumers into an online purchase process with a headline price but failed to provide adequate disclosure of additional fees and charges that are likely to apply,” Australian Competition and Consumer Commission chairman Rod Sims said in a statement.

“As a result of the ACCC’s enforcement and compliance actions, businesses across several industries, including ticketing and accommodation, have now improved their online booking practices to provide adequate disclosure of additional fees and charges that are likely to apply.”

Sims said the ACCC was turning its attention to consumer guarantees issues in the airline industry as part of its compliance and enforcement priorities for this year.