Sneaky fees are misleading consumers about real prices. We’re calling for rules requiring retailers to disclose the full costs upfront and you can help.
You see an ad for a ticket to a concert or a holiday to Oz and reasonably expect the price shown is what you’ll pay. But when you go to make your purchase, you find extra “booking” or other fees mean you’re shelling out more than expected.
These sneaky fees can add anything from $5 to more than $50 to the advertised price. All up, consumers are paying millions. We estimate retailers could be earning $68 million each year from fees charged on top of the headline price.
Our latest survey found more than two-thirds of consumers have been stung by these fees. For some, it’s a regular event. Of those who’d discovered extra charges added to their bill, 39% had forked out extra on at least 3 occasions in the past year.
We want these sneaky fees gone. We’re calling for all-inclusive pricing rules to make companies disclose the full purchase price upfront. A majority of Kiwi consumers agree new rules are needed. 68% want retailers to be required to make the full price clear.
Our data are from a nationally representative survey of 1024 New Zealanders aged 18 and over. The survey was carried out online in December 2016. Figures may not add to 100% because of rounding. The margin of error is +/-3.06%.
Which company has the worst sneaky fees?
Nominate the company with the worst sneaky fees by leaving a comment on this page or emailing us at firstname.lastname@example.org.
The case for change
Price plays a huge part in consumers’ purchasing decisions. But when advertising obscures a product’s real cost, consumers can be misled into making decisions they would not otherwise have made.
The Fair Trading Act prohibits misleading representations about price. But it hasn’t been effective at stopping sneaky fees. Companies point to small print or other disclaimers as evidence they’ve provided sufficient information about additional purchase costs.
Other countries provide better consumer protection. Across the Tasman, companies are prohibited from advertising a component of a price without prominently displaying the total amount the consumer must pay.
The Commerce Commission has previously recommended similar rules be included in laws here. In a 2012 submission to the Commerce Select Committee, it said all-inclusive pricing provisions would “substantially assist” enforcement of the Fair Trading Act.
The commission pointed to a growing trend of retailers separating out additional costs from the headline price. In many cases, “these additional costs are buried in the fine print or otherwise inadequately disclosed”, it said.
But when consumer law reforms were being considered by the committee, Ministry of Business, Innovation and Employment officials advised against all-inclusive pricing rules because they didn’t think there was a “sufficient problem” to justify intervention.
However, our research shows the problem is real and, with the rise of online trading, looks set to get worse. When goods and services are bought online, we’ve found extra fees may only be revealed near the end of the purchase process.
Not only does the practice mislead consumers, it also makes it difficult to compare prices and gives the retailer an unfair advantage over companies that are upfront about costs. All-inclusive pricing rules would ensure consumers can easily identify the price of a product.
Support the campaign
You can support this campaign by signing our petition to get the law changed. We’ll be presenting the petition to Minister of Commerce and Consumer Affairs Jacqui Dean.
Sneaky fee examples
Consumer member Graham Robinson ordered a $60 bunch of flowers through Petals Network. On top of the advertised $60 price tag, the company charges a $14.95 “service fee” that’s displayed after you've chosen a bouquet.
Helen Paddison bought tickets to take her grandson to see the Gruffalo. As well as paying $28 for seats, she had to pay a $1.50 service fee for each ticket, $1 for printing the tickets and a $2.88 credit card fee.
Ian and Margaret McLeay booked a bus fare through Intercity’s website. In addition to the advertised seat price, a $3.99 booking fee is added after you've selected your ticket.
You can let us know of any you've seen by emailing email@example.com.