Australian Carriers to Face Sanctions Over “Misleading” Fares

A federal court in Australia has ruled that Jetstar and Virgin Australia failed to disclose the full price of fares when passengers booked tickets online.

A consumer watchdog agency, the Australian Competition and Consumer Commission (ACCC), has won a courtroom victory against Jetstar and Virgin Australia over so-called “drip pricing” schemes. The airlines now face fines of more than $1 million for failing to clearly disclose service charges for paying with a credit card during the online booking process.

A separate hearing will take place in December to determine an exact dollar figure of the damages the airlines will be required to pay. In December of 2012, the courts ordered Air Asia to pay a $200,000 fine for a similar violation.

Speaking to news.au.com, ACCC Chairman Rod Simms described the latest courtroom victory as “significant.”

“The ACCC’s concern with drip pricing has always been to ensure that consumers are not misled and that businesses are not unfairly disadvantaged by misleading practices,” Sims said. “I note that it is encouraging that a number of businesses in the travel, accommodation and ticketing industries have adjusted their online pricing practices to improve disclosure of fees and charges since the ACCC began its work on drip pricing.”

Jetstar was found to have improperly charged credit card users an $8.50 transaction fee without making the charge clear to customers. Virgin Australia was determined to have charged a less-than-transparent “credit card transaction fee” of $7.70 to customers who booked travel using a mobile device. The court ruled that Virgin Australia did, however, make the additional fee clear to passengers who purchased tickets through the airline’s website without using a mobile device.

Both airlines say that they have changed policies and redesigned the online booking process to make certain the fees charged are now in compliance with consumer protection regulations.

[Photo: Jetstar]