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Tour operators warned about unclear pricing

PN 122/03     23 September 2003

Tour operators must include Aviation Security Charges (ASC) in basic holiday prices, says the OFT. Failure to advertise brochure prices fairly will result in enforcement action.

The warning comes as ABTA has given a similar caution to its members that ASC should be included in basic holiday prices.

Aviation Security Charges were introduced following the terrorist attacks of 11 September 2001 to cover increased insurance and aviation security costs. Initial uncertainty about the size and duration of the charges led to confusion over how prices should be advertised. In fact the charges have remained constant – normally at around £7 since that time – but some operators have not yet included the charges in their advertised prices.

The OFT is making it clear that ASC should be included in the headline price advertised in the brochure. Failure to do so will be considered a breach of the Consumer Protection Act 1987, which the OFT has the power to enforce under Part 8 of the Enterprise Act which came into force in June 2003.

The OFT is currently considering complaints about failure to include ASC in advertised prices.

Issuing the warning John Vickers, OFT Chairman, said:

'The OFT and ABTA are making clear that ASCs should be included in advertised prices. We will be monitoring the situation and will take enforcement action where necessary against operators that mislead in their pricing.'

NOTES

1. ABTA's code of practice has received stage one status under the OFT's consumer codes of practice approval scheme. It is currently working towards achieving stage two approval - See PN 15/03 for further information on ABTA's code.

2. The OFT's approval scheme comprises two stages:

Stage one – the code sponsor makes a promise that its code meets the OFT's core criteria in principle. The sponsor must make sure its code contains measures designed to safeguard and protect consumers' interests beyond the basic requirements of the law.

Stage two – the code sponsor must prove its code lives up to the initial promise. The burden of proof lies with the sponsor. The sponsor must show that the code is being effectively implemented and that consumer disputes are properly resolved.

3. Part 8 to the Enterprise Act 2002 came into force on 20 June 2003, replacing the consumer provisions of the Fair Trading Act and the Stop Now Regulations. The Enterprise Act improves consumer protection by giving enforcers strengthened powers to obtain court orders against traders that breach a range of consumer legislation; controlling activities such as misleading advertising, misleading price indications, lotteries, sale of goods and services, underage sales, estate agency, misleading health claims, trade descriptions, mock auctions, timeshare, unfair terms in consumer contracts, doorstep selling, distance selling, package travel and consumer credit.

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