A study conducted by the Competition and Consumer Commission of Singapore (CCCS) has found that some online travel booking websites are using unethical practices to dupe customers into paying more for their trip than they had expected.
In response, the CCCS is proposing a new set of regulations to ensure greater transparency in pricing and marketing. According to The Straits Times, “The guidelines will provide more clarity on what constitutes an infringement of consumer protection laws, and set out the factors and circumstances that the commission may consider in assessing if advertised prices and related practices are potentially misleading.”
The CCCS cites four tactics used to mislead customers. The first, “drip pricing,” is when a company suddenly includes fees (both mandatory and optional) during a transaction or payment. The effect is a higher price than the one that was initially advertised. Eighty percent of the 500 consumers questioned by the CCCS said they encountered this practice while booking flights and hotels, adding that most of the additional fees were mandatory.
The second tactic identified by the CCCS is “pre-ticked boxes.” As the name suggests, this is when a website automatically selects unnecessary or unwanted add-ons—e.g. rental cars and sightseeing tours—that the consumer must then spot and deselect. Almost a third of those surveyed reported spending more than they anticipated because they failed to opt out of these optional services.
The third tactic, “strikethrough pricing,” is when a customer is confronted with two prices: a normal price that is crossed out, and then, next to it, a sale price. This is oftentimes deceptive and causes customers to expect a lower price that does not actually exist. 35 percent of hotels and 39 percent of airlines that use strikethrough pricing admitted that the reduced price is not always accurate.
“Pressure selling techniques” is the last tactic cited in the study. This refers to the practice of advertising a flight or hotel room as being available for a limited time only, pushing customers to quickly make the purchase out of fear of missing out on a deal that is, in fact, available for a longer period of time. 40 percent of consumers reported being taken in by this trick.
Many countries have laws protecting consumers against unethical practices like the ones above; however, many do not. And even if companies are bound by such laws, it’s safe to assume that they are looking for loopholes that can be exploited. And if a loophole is exploited, there’s a chance that you will be too. So stay on your toes.