Government to crack down on hidden charges for online consumers as new research shows practice is 'widespread'

The government has proposed new measures to crack down on hidden charges for online consumers after research showed that the practice is widespread in the industry.

The Department for Business and Trade (DBT) will consult on plans to help consumers avoid so-called "drip pricing" when buying goods online. This is when the initial price displayed by the business is less than the final total due to hidden obligatory fees at checkout.

'Drip-pricing' has been used in online services such as train tickets, concert and event tickets and food deliveries. The DBT has said that the practice has been used by 54% of entertainment providers, rising respectively to 56% for hospitality businesses and 72% for transport and communication businesses.

The government has estimated that hidden fees cost UK consumers around £1.6 billion extra per year. The newly proposed plans would see businesses forced to provide information about additional charges at the start of the purchasing process

It comes after Prime Minster Rishi Sunak spoke about his plans to crack down on hidden fees for customers. He said: “I think we're all probably anecdotally and individually aware of this practice of - you know, you just get more and more things added on to the cost of something as you move through a process and there's just not the kind of price transparency that you'd expect.

"We’re concerned about that. We want to make sure that we keep helping people with the cost of living.”

Speaking of the newly announced plans, business and trade minister Kevin Hollinrake said: “Today’s measures will help people keep hold of their hard-earned cash and ensure they have the clearest and most accurate information upfront before they make a purchase.

“From the shelves of supermarkets to digital trolleys, modern-day shopping provides a great wealth of choice. But fake reviews and hidden fees can make those choices increasingly confusing and leaves customers unsure about what product is right for them.

“We’ll be listening to industry to ensure these new regulations work for businesses too and don’t generate unnecessary burdens, while at the same time providing a crucial safety net for consumers and their cash.”