The Competition and Markets Authority (CMA) has opened an investigation into Virgin Atlantic over its presentation of mandatory fees, such as resort charges and local taxes.
It is investigating whether these fees are included in the total price the customer sees at the beginning of the sale process, and whether they are provided with a total price when buying a package holiday.
The CMA stressed that, at this initial stage, it should not be assumed that Virgin has broken the law and no finding has been made.
The probe is one of three new CMA investigations into firms over concerns that customers were not shown the total price upfront when buying holidays, train and coach tickets and driving lessons.
The other firms being investigated are Trainline and RED Driving School.
The CMA said its action was part of a wider clampdown on misleading pricing practices, including where mandatory charges are separated from the headline price – or added later in the buying process.
“These practices leave consumers facing unexpected costs or having to calculate the true cost themselves,” it said.
“Such practices can also impact competition between businesses, as a firm using drip pricing may falsely appear to be cheaper than a competitor and attract more customers.”
All firms under investigation had previously been sent ‘advisory letters’ as part of the CMA’s first consumer protection drive, using its new enforcement powers.
These letters put the businesses on notice and remind them of their obligations under consumer law, but the CMA remains concerned about their pricing practices following ongoing monitoring.
If it finds there has been an infringement of the law, it can order businesses to pay compensation to affected customers, as well as fining companies up to 10% of their global turnover.
CMA Executive Director for Consumer Protection Emma Cochrane said: “At a time when many households are watching every pound they spend, it is important that people are not surprised by extra fees when booking train and coach tickets, holidays or driving lessons.
“Clear pricing helps people compare offers confidently and choose the option that works best for them.
“Unexpected mandatory charges make this much harder, which is why the CMA initially put these firms on notice over concerns about their pricing practices and is now opening formal investigations.
“The first price customers see should be the price they pay.”
