New law to tackle ‘hidden pricing’ ‒ will it protect your money?

Drip-pricing, where the costs of your purchase keep going up as you go through the checkout process, could soon be banned as the new rules force retailers to include these 'hidden charges' in headline prices. 

The new Digital Markets, Competition and Consumer Bill, which is currently going through the House of Lords, will be amended to include the banning of ‘drip pricing’.

This practice is where retailers hit shoppers with hidden or unexpected fees late in the checkout process. The shopper is enticed in with an eye-catching price at the outset, but by the time they come to pay for the goods or services, they find the price has increased markedly.

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The government’s own research has suggested there are certain sectors where the practice is particularly prevalent. For example, it found that it occurs in around three quarters of transport and communication operators. Airline tickets are a good example, with travellers attracted by an initial low price only to then be hit with all sorts of additional charges as they move through the booking process.

Other sectors where the drip pricing tactic is widespread according to the government’s studies include entertainment (54% of providers) and hospitality (56%).

These hidden fees really add up, too, with the government claiming that unavoidable fees cost shoppers around £2.2 billion a year.

As a result, the government will legislate to ensure that fees that are mandatory ‒ such as booking fees ‒  must be included in the headline price or at the start of the shopping process, making it easier for shoppers to compare. Optional fees, such as seat upgrades for flights, will not be included in the new measures.

Rocio Concha, director of policy and advocacy at Which?, welcomed the move as drip pricing can “leave consumers feeling ambushed at the checkout”, though warned that “Further action may be needed to tackle the range of sneaky pricing tactics used to bump up the advertised price in areas like flight bookings.”

CLAMPING DOWN ON FAKE REVIEWS

The legislation will also attempt to crack down on fake reviews. Fake reviews are to be added to the list of banned practices, with website hosts held responsible for the reviews on their pages.

Previous research from organisations like Which? have found that reviews are being manipulated to promote poor quality items, with shoppers potentially being hoodwinked into wasting their money.

For example, the consumer champion found a host of groups had been set up on Facebook in order to bring together potential reviewers, who are enticed into leaving five-star reviews by signing up to receive the items for free.

There are certain products that are particularly at risk from these fake reviews, too. A study by Scams.info earlier this year found that around one in three reviews for books (37.2%), baby products (34.8%), large appliances (33.6%) and computers and accessories (32.1%) are 

However, there have been criticisms that the government is not going far enough. Concha noted that millions of people use online reviews to help choose a product or service, and that “criminalising trading and hosting of fake reviews” is necessary in order to tackle the scourge.

“Ministers must look again at these proposals if they are to properly protect consumers," Concha added.

HOW CAN I PROTECT MYSELF FROM FAKE REVIEWS?

There are certain steps you can follow to ensure you are less likely to be caught out by questionable reviews, according to Which?

For example, read the reviews thoroughly ‒ if they often use the same sort of positive language, or a host of reviews have been posted around the same date, that can be a sign that some sort of incentive is involved.

It’s also important to look out for specific insights into the reviewer’s experience with the product as real reviewers tend to include more detail.

Focusing on the most recent reviews can give a more accurate insight into the quality of a product, while it can also be useful to actively ignore the five-star reviews, since you can get a more balanced view from the lower-scored reviews.

Which? also suggests checking the review history of the reviewer, and looking out for mentions of incentives for leaving a positive write-up.