CMA opens investigations into car rental comparison sites for alleged hidden costs
First published by Admin on December 01, 2017 in the following categories: Investigations and tagged with cma | comparison sites
The Competition and Market Authority (CMA) has announced they’re opening enforcement cases against two car rental price comparison sites on suspicion that some of their practices may be anti-competitive. The decision follows the recent investigations the CMA has been working on with regards to hidden charges made by five major car rental companies.
Car rental price comparison websites can be very useful for customers to find the cheapest offer for hiring a car according to their specifications. However, this of course only works if the price comparison tool is fair and fully accurate.
The CMA’s previous work in looking at comparison services has proven that listed companies often engage in activities to seemingly “warp” results and manipulate the consumer’s view on the goods and services provided. On the 19th October 2017, the CMA published compliance guidance for online car rental intermediaries with the aim of ensuring that consumers will be able to access information about the full prices and other key features when hiring a rental vehicle.
The document covers requirements mentioned in a letter that the CMA wrote to 40 rental intermediaries in July 2016. The letter noted that the authority was aware of certain aspects where the car rental brokers or meta-search providers were perhaps doing things that needed changing, including:
- Charging young drivers a surcharge
- One-way fees
- Fuel charges
- Excesses
- Pre-authorisations or deposits
- Collision damage waiver exclusions
- Warnings about the need for snow chains
Any additional costs should be initially clear and visible for drivers prior to purchasing a car hire so they don’t get a nasty shock when it comes to paying. With surcharges added on here and there, users of comparison sites are perhaps not benefiting from the service in looking for the best value hires.
The emphasis here lies in giving the consumers:
“…the true cost of the rental and key information about any additional liabilities they may be exposed to, and you should do this in a clear and prominent manner.”
People looking to hire a car should be able to look at a quote and know that it’s “accurate, up-to-date, prominent, timely and not misleading.” This is the best way for them to be able to compare vehicles with available features and the price of hiring.
With inaccurate or missing information, they may not realise there are extra costs or responsibilities until they check out or return the vehicle. At that point, they may be forced to pay up for hiring a vehicle with a particular provider that they otherwise wouldn’t have chosen based on price.
In the potential failure to provide accurate and relevant information, it’s not only the consumer who is harmed but perhaps also competitors who want to advertise their better priced services.
When comparison sites are not providing the necessary information like extra costs to make particular providers look better, other providers may be disadvantaged as customers may overlook their listing for being pricier, when in fact it could be cheaper after all surcharges have been accounted for.