Watchdog to investigate 'bargain' deals

Published on Thursday 15 October 2009 21:47

BRITAIN'S competition watchdog is putting potentially misleading pricing practices under scrutiny to help protect consumers.

The Office of Fair Trading (OFT) announced yesterday that it would look at practices such as "drip pricing" – where the cost of an item grows through the buying process – and "baiting sales" where only some products are available at discount prices.

The watchdog's study will focus mainly on how the sales practices are used by online retailers and could result in sanctions against firms.

OFT senior director Heather Clayton said: "It is very important that the OFT's approach to potentially misleading practices remains well-informed by a sound evidence base, so we effectively protect consumers while allowing firms to compete freely."

The OFT said sectors including airlines, car hire, ticket sales and insurance would be looked at in its study of drip pricing.

Other practices to be examined include "reference pricing" – where retailers use high reference prices compared with the sale price to create eye-catching 50 per cent off deals.

Price comparison and switching websites which claim to give consumers the best deal will also fall under the watchdog's gaze.

A range of options is available to the OFT, from giving retailers a clean bill of health to encouraging voluntary codes of practice – or a full-blown investigation of companies suspected of breaching consumer protection laws.