OFT to crack down on misleading cheap bargain deals
The OFT is to investigate companies using reference and drip pricing which add costs onto the advertised value of a product.
Retailers who advertise cheap bargain deals on the internet and the high street, only to add further costs later on, are being investigated by the Office of Fair Trading (OFT).The consumer watchdog is to look at techniques such as 'drip pricing', which involves advertising a low price or discount on the front page of a website or in the windows of a store, then adding costs in one or more of the following stages of a transaction.
Another trick, known as 'reference pricing', sees retailers using elevated starting costs when offering cheap bargain deals where the original value is slashed and will also be addressed in the OFT's study.
Heather Clayton, a senior director at the OFT, said it will collect sound evidence into the practices of corporations in order that it can "effectively protect consumers while allowing firms to compete freely".
"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," she added.
The results of the survey are due to be completed next summer.
In other money saving news, homeowners who receive high-speed internet services from Be Broadband will be able to set up a 'virtual hard-drive' on the internet to store precious files at a low cost thanks to a collaboration between the firm and Livedrive.
Both new and existing customers can now take up the cheap bargain deal, which allows Be Broadband users to get a 35 per cent discount on any of Livedrive's online storage facilities.
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