Fake sales and price tricks targeted in crackdownTrade watchdog warns firms over price lies
02 December 2010
Companies which dupe people into buying items through tricks such as hidden extras must make prices clearer or face enforcement action, the trade watchdog warned today.
The Office of Fair Trading says that certain pricing techniques being used online and in shops can mislead shoppers and are potentially breaking the law.
It singled out practices such as 'drip pricing' - where extras such as taxes and card charges are added as you go through the buying process - time-limited offers - such as those that 'end today' - and baiting sales, where a deal is advertised to get customers through the door but few items are available at the sale price.
The watchdog said such techniques weren't necessarily against the law, because this would depend on specifics - but it highlighted them as sailing close to the wind, saying they had the 'greatest potential to cause harm'
The warning follows a study by the OFT and investigations by Which? into price techniques, including those used by certain double glazing firms and furniture stores. We've reported several companies to trading standards officers and the OFT because of our concerns that consumers were being misled.
Which? has recently reported Asda, Sainsbury's and Tesco to trading standards officers as a result of our supermarket prices investigation, where we found they were promoting larger pack sizes of items as better or bigger value when in fact they were not. Our findings into double glazing companies, where we thought sales tactics were misleading, and furniture shops including DFS, Sleepmasters, SCS and Dreams, where we felt their 'never ending' sales were misleading people into thinking they were getting a bargain, were sent to the OFT.
Extras are often associated with travel websites but the OFT has been considering the pricing on certain comparison sites where extras are added. Some are not clear about the total excess that the policyholder would have to pay upfront when making a car insurance claim. Different or hidden excesses make comparing on a life-for-like basis difficult.
Which? has found that one area which particularly irks consumers is card surcharges; we’ve found that surcharges for paying by plastic often far exceed the cost to the vendor.
Which? chief executive Peter Vicary-Smith said: 'Whether you’re getting an insurance quote or booking a flight, it’s incredibly frustrating when "optional" extras result in you paying more than you bargained for.
'If companies are so confident they’re offering the best deals then they’ve nothing to fear by being more upfront about the overall price.'
He added: 'The promise of action against companies that mislead their customers again raises questions about enforcement on a national level once the OFT passes its powers to trading standards officers (TSOs). Will local TSOs have the resources or the expertise to take on national companies?'
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