Posted 11th December 2023 | No Comments

ORR warns ticket sellers over concealed ‘drip pricing’

Third-party ticket retailers who quietly add fees to the fares they display to passengers are being warned by the Office of Rail and Road that they must be transparent when quoting prices, and not leave out a booking fee or other charges which will be added to the final fare payable.

The practice of hiding fees is known as ‘drip pricing’, and some airlines have also been accused of staying silent about charging for such things as allowing passengers to book seats next to each other or taking baggage on board, only revealing the charge when the transaction is almost complete.

The rail regulator has examined the trading practices of 19 third-party retailers who are licensed to sell rail tickets. They are entitled to keep 5 per cent, which is the industry’s standard commission rate. But 12 of the retailers examined also charge a fee to passengers in addition to the fare, which ranges from 45p for each ticket to £6.45 for each transaction. Some also offer to calculate split ticket reductions, but charge a ‘finder’s fee’ for this service, which is typically between 10 and 15 per cent.

The ORR noted that ‘consumers are shown an initial price while additional fees are revealed later in the sales process. Consumers are often disproportionately influenced by the first headline price they see’, and that ‘UK consumer protection law requires retailers to provide people with the information they need to make informed purchase decisions’.

Train operators also sell tickets via the National Rail website, but although they do not charge fees or commission on top of the official fare they can charge for such things as posting paper tickets.

The ORR is calling on all retailers to make sure that any booking or finder’s fee is included in the headline price, that there is a clear breakdown at every stage, with appropriate prominence given to any additional charge, and that any additional fees are stated plainly before the booking process begins.

The ORR has written to seven third-party retailers, highlighting its concerns and asking for details on how the company will address the findings. The regulator said it plans to publish its letters and the retailers’ responses on the ORR website and will consider any next steps accordingly.

The regulator’s report comes at a time when the Department for Business and Trade is expected to publish its findings of a wider consultation into price transparency that highlights the risks of drip pricing.

The ORR’s director of strategy, policy and reform Stephanie Tobyn said: ‘Consumers can now purchase rail tickets from a wide variety of websites and apps. This report highlights that some online retailers are not as transparent as they need to be when it comes to how they display or provide information on additional fees.

‘We want to ensure consumers are provided with timely and relevant information when making purchase decisions and that drip pricing does not undermine consumer confidence when purchasing rail tickets online.’