OFT to scrutinise online pricing

The Office of Fair Trading (OFT) is looking 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 by the OFT include 'reference pricing' - where retailers use high reference prices compared with the sale price to create eye-catching '50% off' deals.

The watchdog will also look at 'must end today' offers where sale prices are only available for limited periods, while complex pricing such as '3-for-2' deals and mobile phone 'free add-ons' - where it is difficult for consumers to assess individual costs - will also come under the microscope.

Price comparison and switching websites which claim to give consumers the best deal will also be examined by the OFT.

"We will consider whether, either by employing some of the practices listed ... or by engaging in other advertising and pricing practices, such as returning quotes which do not include all requested add-ons, they may result in consumers making incorrect decisions," it said.

A range of options are available to the OFT, from giving the 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.