Airline under scrutiny
The New Zealand Commerce Commission is to investigate the way in which Air New Zealand sells travel insurance to its customers, as the airline automatically selects the cover during the buying process, a practice banned in Europe and elsewhere as being unfair to customers
The Commerce Commission is reportedly investigating insurance sold by Air New Zealand on domestic flight routes, where passengers are charged $10 for the insurance unless they ‘untick’ a box which was automatically selected for them by the company. A local lawyer, Ciska de Rijk, was quoted as saying that while there is currently no law against pre-selected boxes on websites of companies based in New Zealand, such a practice could ‘potentially be seen as engaging in some sort of deceptive conduct’. De Rijk continued: “Consumers might not be aware they are agreeing to buy this additional service. They might think they have to have it in order to sign up or go into the arrangement. What Air New Zealand is doing is marking it really clearly to mitigate the risk that consumers think it is required.”
Consumer New Zealand’s chief executive Sue Chetwin said of the practice of automatic opt-in: “We think that is sort of borderline unfair. If you want insurance you should actually have to tick the box rather than have it ticked for you.” Chetwin pointed out that Air New Zealand was not the only firm to use such a tactic.
Christian Bonnevie, spokeperson for the Commerce Commission, confirmed to ITIJ: “The Commission is currently investigating the insurance offered on the Air New Zealand website on an ‘opt-out’ basis. The nature of our investigation does not concern the practice of drip pricing and we are not currently looking at any other aspects of their pricing.”
Hidden fees
Meanwhile in Australia, consumer watchdog Choice has brought attention to the plight of travellers who have been caught out by hidden booking fees. Tom Godfrey, spokesman for Choice, said one of the most common complaints received by the organisation is online travel booking sites going on what he termed a ‘fee frenzy’. Godfrey elaborated: “People are still getting caught out with online booking sites with fees, and when screens time out. These online checkouts offer up a fee frenzy for these accommodation providers or airlines, so it’s not surprising to see airlines are zeroing in on drip pricing. When consumers go into that online environment and go into a checkout they are served up all sorts of things, from carbon offsets to car hire, right through to the obligatory credit card surcharge.”
Drip pricing is when customers are given a headline price at the beginning of an online transaction, only to find extra fees added on by the time they conclude the process, meaning they pay more than the rate originally advertised.