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OFT deadline on misleading holiday and travel pricing arrives

72/07    11 May 2007

On 9 February the OFT issued a warning to all holiday and travel suppliers to include all fixed non-optional costs in the basic advertised prices of their holidays. The deadline for compliance has now expired.

The majority of airlines that the OFT contacted agreed to review their pricing practices. Some have now agreed to change their pricing to make it more transparent for consumers. The OFT is now reviewing relevant advertising and websites to ensure that compliance is complete.

Separately, the Association of British Travel Agents (ABTA) has issued a reminder to its members that its Code of Conduct requires them to include all fixed non-optional costs, such as taxes, in the basic advertised prices of their holidays. ABTA has said it will rigorously enforce this Code against travel companies who do not comply. The OFT welcomes and supports this approach by ABTA.

A minority of airlines have failed to comply. The OFT intends to bring enforcement proceedings against these airlines.

John Fingleton, OFT Chief Executive said:

'Markets do not work well if consumers cannot make like-for-like comparison of prices. The OFT is committed to ensure that consumers are not misled by advertised prices that bear little relation to actual prices, and that businesses that do provide reliable information to consumers are not disadvantaged. We will enforce the law enthusiastically to ensure that consumer choice and competition are not distorted, and that both consumers and business have confidence in the market.'

NOTES

1. Part 8 of the Enterprise Act 2002 gives the OFT powers to obtain court orders against traders that breach a range of consumer legislation including in relation to misleading advertising and misleading price indications.

2. In 2005 online air transport sales to households totalled £2.7 billion. Note: this data represents the sales of businesses with 10 or more employees. 'Air transport' is defined by the two digit SIC '62' and is not considered the optimum for sectoral publication. Source: ONS analysis of the 2005 e-commerce Survey of Business

3. The OFT issued a warning to holiday and travel suppliers on 9 February 2007 - see press release 21-07.

4. More information about ABTA and its Code of Conduct is available on the ABTA website.

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