Airbnb and eDreams have been hit with a setback by the ACCC.
The Australian Competition and Consumer Commission has accepted court enforceable undertakings from Airbnb and eDreams, following concerns that the companies made online price representations to Aussie consumers that were in breach of the Australian Consumer Law (ACL).
The ACCC considers that Airbnb, since November 2012, and eDreams, from January to December 2014, engaged in misleading and deceptive conduct and made misleading representations by failing to adequately disclose to consumers particular mandatory fees on key pages of one or more of their online booking platforms.
It’s also been noted that there might have been occasions where Airbnb failed to adequately disclose manatory Service Fees and Cleaning Fees where applied by an accommodation host on Search Results pages and listing pages.
The has also made note that eDreams, an online travel agency that offers flights, hotels, vacation packages, train tickets, and car rentals, has failed to disclose Service Fees and Payment Fees on certain booking pages, and also failed to comply with requirements to specify single total prices inclusive of extras.
These matters were raised by the ACCC as part of its commitment to addressing problematic drip pricing practices during online purchasing processes.
Drip Pricing is where a headline price is advertised at the beginning of an online purchasing process and additional fees and charges, which may be unavoidable for consumers, are then incrementally disclosed or ‘dripped’ into the final pricetag.
“Drip feeding consumers with information about charges can cause detriment to competition and result in consumers paying a higher price than the advertised price or spending more than they realise,” ACCC chairman Rod Sims said.
“The law does not prevent traders from charging fees. However, it does require that fees are disclosed clearly to avoid consumers being misled.”
Airbnb and eDreams have each acknowledged the ACCC’s concerns and cooperated with the ACCC during its investigation.
Both have undertaken moves to improve their pricing practices so that mandatory fees will be incorporated into prices displayed, or otherwise disclosed up front.
Airbnb has also established and maintained a consumer law compliance program within the company, and eDreams has moved to ensure appropriate staff receives compliance training focusing on key aspects of the ACL.
But there are a number of tricks consumers can use to deal with drip pricing and avoid paying more than initially expected.
Tips to avoid drip pricing:
- Be aware of misleading drip pricing practices when shopping online for services, particularly in the airline, ticketing, accommodation and vehicle rental sectors.
- Shop around and be aware that you may need to pay more than what was advertised. Consider ALL the charges together. Don’t just focus on the advertised price – the cheapest advertised price may not be the cheapest final price.
- Be prepared to back out of the transaction, especially when you start to encounter additional charges.
- Look out for preselections and make sure you reject anything you do not want to purchase.
- Thoroughly check your booking before you make any final payments.
