CMA launches major crackdown on 8 retailers over fears shoppers are being hit with unfair pricing tactics

The Competition and Markets Authority has launched investigations into StubHub, viagogo, AA Driving School, BSM Driving School, Gold’s Gym, Wayfair, Appliances Direct and Marks Electrical after concerns that shoppers may be paying more than they realise online.

The regulator said it is examining whether customers are being hit with extra fees late in the checkout process or steered into paying for add-ons they did not intend to buy.

The CMA will look at practices such as hidden charges, countdown timers that rush people into purchases and optional extras that appear to be pre-selected. These tactics can leave customers thinking they are getting one price, only to find the total cost is far higher by the time they reach payment.

The watchdog has not accused the companies of wrongdoing at this stage, but the launch of full investigations shows it believes there is enough evidence to warrant concern. Shoppers are being urged to check prices carefully before paying and to watch for any charges added at the last step of the transaction.

CMA chief executive Sarah Cardell said: "At a time when household budgets are under constant pressure and we’re all hunting for the best deal possible, it’s crucial that people are able to shop online with confidence, knowing that the price they see is the price they’ll pay, and any sales are genuine.

"Whether you’re spending your hard-earned cash on concert tickets or driving lessons, joining a gym or buying furniture and appliances for your home, you deserve a fair deal.

"It’s our job to protect consumers from misleading prices and illegal pressure selling and today marks an important milestone as we take action across the economy to make sure businesses do the right thing by their customers.

"Since the launch of the new regime, we’ve been working hard to help businesses understand the law. But alongside supporting businesses to comply, we’ve always been clear that we will take swift action where we suspect potentially serious breaches of the law.

"This is just the start of our work. Any businesses who break consumer law should be in no doubt we will stamp out illegal conduct and protect the interests of consumers and fair-dealing businesses."

The CMA said it opened investigations into the eight firms because it had "reason to suspect" they had infringed consumer law in relation to their use of fees, use of misleading time-limited offers or the automatically opting consumers in for optional charges.

Two of the companies under investigation, secondary ticketing sites StubHub and Viagogo, are being reviewed over the mandatory extra charges added when customers buy tickets and whether those fees were shown upfront.

The CMA is also examining AA Driving School and BSM Driving School to assess how they present compulsory fees, and whether those costs were included in the total price shown at the start of the booking process.

Gold’s Gym is being investigated over the way it displays its one-off joining fee for annual membership, including whether the charge was added part way through sign-up instead of being included in the advertised price.

The regulator is reviewing Wayfair for its use of time-limited sales, Marks Electrical for default opt-ins, and Appliances Direct for both time-limited sales and default opt-ins.

The CMA stressed that it has not reached any conclusions about whether any of the companies have broken the law.

These proceedings mark a significant shift in the regulator's enforcement capabilities under the Digital Markets, Competition and Consumers Act 2024, which grants the authority power to determine consumer law violations without requiring court intervention.

The enforcement action follows an extensive examination of pricing practices across the economy, with the CMA scrutinising more than 400 companies in 19 different sectors since April.

The regulator identified potential compliance issues in 14 sectors, particularly concerning drip pricing and deceptive countdown timers, both prohibited under the new regulatory framework.

The authority's enhanced powers represent a fundamental change in consumer protection enforcement. Should the CMA determine that businesses have violated consumer law, it can mandate compensation payments to affected customers and impose financial penalties reaching 10% of a company's worldwide revenue.

The regulator has adopted a dual strategy, combining direct enforcement proceedings against the eight companies with advisory correspondence to 100 additional businesses, whilst simultaneously releasing updated guidance on pricing transparency compliance.

Among homeware retailers, Wayfair is under investigation for time-limited sales practices, Marks Electrical for automatically enrolling customers in optional services, and Appliances Direct for both time-limited sales and default opt-in practices.

The CMA has dispatched advisory letters to 100 businesses, alerting them to concerns about additional fees and online sales methods. The correspondence targets 14 sectors where the regulator discovered potential issues, encompassing holiday packages, driving instruction, homeware retail, rail transport, parking facilities including airports, bus and coach services, luggage storage, cinemas, live entertainment ticketing, food delivery services, postal and parcel delivery, fitness centres, fashion retail and online voucher providers.

These industries collectively reach tens of millions of British consumers annually.

The regulator's data reveals that UK residents undertook more than 44.7 million overseas trips in the first half of the year, with expenditure reaching an estimated £38.6billion.

Domestically, 11.5 million people maintain gym memberships, whilst nearly a third of British adults order takeaway deliveries monthly or more frequently.