Does consumer protection cover price changes at point of sale?

Question

Just now I booked a flight on booking.com in the following sequence:

1. The flight was listed as £460
2. I went through the entire purchase procedure and entered bank details
3. I went through 2FA to authorise the payment on my banking app on my phone. This check is initiated by booking.com trying to debit my account. I authorised £460 for the flight.
4. The very next screen on the booking.com site was a popup saying (paraphrased) "the flight company has since changed their listing price. It's now £520. Accept or decline".
5. I declined the payment and the flight booking was cancelled.

However, I had literally just authorised the payment via 2FA for my bank. So booking.com now claimed £460 from my account (I saw it on my statement and had authorised it) and yet they simultaneously cancelled the flight booking.

I then get an app message that I will be refunded within 2-5 days.

I spoke to customer services and my bank and got it fixed straight away but I don't understand how this is legal by default. It's not an insubstantial amount of money they're withholding for potentially days, which might prohibit me from booking a different flight in an urgent situation.

Surely the transaction amount needs to be finalised before I go through payment authorisation with my bank? I had an obvious expectation of getting the flight when I authorised the payment, and then they took the money and immediately changed the terms in a way that I couldn't possibly foresee, whilst cancelling the ticket.

Answer 1

england-and-wales

On the basis of the circumstances described, the trader's behaviour seems tantamount to more than one offence.

The behaviour known as 'bait advertising' is described at paragraph 5 of Schedule 1, Consumer Protection from Unfair Trading Regulations 2008 (CPRs):

5. Making an invitation to purchase products at a specified price without disclosing the existence of any reasonable grounds the trader may have for believing that he will not be able to offer for supply, or to procure another trader to supply, those products or equivalent products at that price for a period that is, and in quantities that are, reasonable having regard to the product, the scale of advertising of the product and the price offered (bait advertising).

Regulation 12 CPRs makes an offence of such behavior:

12. A trader is guilty of an offence if he engages in a commercial practice set out in any of paragraphs 1 to 10, 12 to 27 and 29 to 31 of Schedule 1.

Advertising a price promotion for a product that is not in fact available at the advertised price is a 'misleading action' at Regulation 5(4)(g) and (h) CPRs. Regulation 9 CPRs makes offences of 'misleading actions'.

Other regulations may be relevant, such as misleading omissions at Regulation 6 CPRs. This is an offence too - at Regulation 10 CPRs. This is the omission, hiding or misleading provision of 'material information', i.e. "the information which the average consumer needs, according to the context, to take an informed transactional decision". In other words, information that would tend to affect the decision of the average consumer. Such as, "we might take your money without supplying you the product."

(Quibbles in comments about whether the money was in fact taken by the trader or blocked by the bank seem besides the point. The trader misled the consumer with the effect that the consumer cannot use this particular money for the time being and hasn't been given the product either.)

I'm sure in this case there was no criminal intent and that it's down to technology, race conditions or glitches, but the consequences are the same. The law doesn't have the effect of "it's OK if it's a glitchy real-time flight price comparison system," it has the effect of, "if there is a risk you can't supply a thing at the price you said you would supply it for, you have to make that risk clear to the customer - especially before you take their money."

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Writing more generally and in reaction to some other answers and comments here:

It's not sufficient to point to terms and conditions and say the consumer should have read them.

Consumers have rights under contract law and the Consumer Rights Act 2015. Traders must not behave in ways that are considered 'banned practices', 'misleading practices', 'aggressive practices' or otherwise 'unfair commercial practices' under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The trader must abide by The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

The law requires fair and open dealing with consumers, transparency, timeliness, and particular prominence for terms that are unfavourable to consumers.

Terms must be fair. Information likely to make a difference to the consumer's decision should be prominent and close to the headline, price or call to action (e.g. a 'buy now' button). There shouldn't be a burden on the consumer to take extra steps such as scrolling down or clicking a link to another page.

When prices are subject to frequent changes, the trader should monitor the position and, when necessary, act promptly to withdraw the offer. The trader should not take the consumer's money and then withdraw the offer from that consumer!

Consumers tend to think they have entered into a binding contract once they have confirmed they want to buy and the system has accepted their payment details. Generally, if the trader is then unable to fulfil the contract, the consumer may reasonably believe the trader is in breach of contract. If the consumer's money has been taken or is otherwise made unavailable to the consumer, the consumer might be entitled to compensation.

The Competition & Markets Authority (CMA) has expressed the view that terms and conditions along the lines of "the contract is only formed when the goods are dispatched" risk failing the fairness test under section 62, Part 2, Consumer Rights Act 2015. This is because such a term or notice is likely to cause a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer, contrary to the requirement of good faith (section 62(4)). It is insufficient to have such a term behind a link and/or buried in a wall of terms.

(If a term said something like, "In the event we can't supply at this price then we will refund you and give you £100 cash" or "... we'll offer a better alternative for no extra charge" then there would be a benefit to the consumer, therefore the term would be fair / less unfair to the consumer, therefore less likely to be unlawful.)

Finally, some if not all of the big online aggregators have done some unfair things in their time! Indeed, some so-called 'disruptors' have 'disrupted' by simply ignoring/breaking the law.

The CMA has investigated hotel booking websites, car rental brokers and digital comparison tools generally and has criticised some of their practices. I'm not aware of a flight aggregator -specific investigation, perhaps there should be one.

Many businesses and people complain about all these laws, regulations and investigations but they exist partly because some traders have taken advantage of consumers, to put it mildly, and those online can take advantage at scale. Their behaviour advantages themselves to the disadvantage of the consumer.

Answer 2

australia

They must sell at the lower price or stop selling until the disparity in the prices is fixed

Sometimes the price of an item in store or online at the checkout may not match the displayed or advertised price in store or online. If this happens, even by mistake, the business must either:

• sell the product for the lowest price - either the checkout price, or displayed or advertised price, or

• stop selling the item until the incorrect price is corrected.

If you checked their site when they asked you the question and the price on offer had been updated, this is fine.

However, you may have already had a contract at the lower price

This would depend on a detailed analysis of the terms to determine exactly when the contract became binding. Because booking.com is an aggregation service, this is likely based on the terms of the particular vendor. You would have been given the opportunity to read those terms and no doubt you ticked a box saying you did which is binding even if you didn’t.

Online sales contracts generally defer the creation of an actual binding contract until as late as possible. For example, when you buy from Amazon, the contract becomes binding when the product leaves Amazon’s warehouse which may be days or even weeks after your order and payment:

With respect to products sold by Amazon AU, your order is an offer to us for you to buy the product(s) in your order. When you place an order to purchase the product(s) from us, we will send you a message confirming receipt of your order and containing the details of your order (the "(“Order Confirmation”). If you are using certain Amazon Services (e.g. Amazon mobile applications) the Order Confirmation may be posted on a Message Centre on the website. The Order Confirmation is acknowledgement that we have received your order, and does not confirm our acceptance of your offer to buy the product(s) ordered. We only accept your offer, and conclude the contract of sale for a product ordered by you, when we dispatch the product(s) to you and send e-mail or post a message on the Message Centre of the website confirming that we’ve dispatched the product to you (the “Dispatch Confirmation”). If your order is dispatched in more than one package, you may receive a separate Dispatch Confirmation for each package, and each Shipment Confirmation and corresponding dispatch will conclude a separate contract of sale between us for the product(s) specified in that Dispatch Confirmation. Your contract of sale is with Amazon Commercial Services Pty Ltd.

If you do have a contract, then it can only be cancelled in accordance with its terms.

Answer 3

switzerland

In Switzerland, there's been the rather famous "Zirkus Knie vs. Viagogo"¹ case. Viagogo is an online ticket-reselling company that not for the first time was sued for unfair competition. Viagogo used all possible tricks during an electronic ticket purchase: Secret costs that where only shown at the very end, giving the impression that only few tickets where left, arbitrary ticket categories which didn't match the ones in the actual circus tent, etc. Also, the website design was such that the price was almost invisible on the page and at the opposite end of the "Confirm" button.

A lower court ruled in favor of Zirkus Knie, and this ruling was appealed by Viagogo. In the relevant part of the ruling on the appeal (Section 8), the court finds that

[Die Beschwerdeführerin handelte Unlauter, indem sie] im Bestellvorgang den zu bezahlenden Preis schrittweise erhöhte, ohne zumindest am Schluss sichtbar sowie klar nachvollziehbar den Gesamtpreis zu nennen und dem Kunden für den Kaufentscheid eine Frist von mindestens drei Minuten zu gewähren;

[The appellant was acting unfairly by] gradually increasing the price during the booking process without, at least at the end, clearly and comprehensibly showing the total price and giving the customer at least three minutes to decide whether he wants to accept the purchase. (translation mine)

Thus the final price must be shown before the transaction is completed and there must be a reasonable time during which said price stays stable.

¹ The official verdict document is, as always, anonymized. But in this particular case it's very well known who the parties were. There's no other company that owns a Circus and a zoo.

Answer 4

united-kingdom

This may be a change of product not a change of price

Flight bookings are traditionally made in classes. Not just First, Business, Economy, etc, but different levels in each - Y is full-fare economy and O/P/Q might be discount fare classes. There are typically quotas for seats in different classes - 5 seats in O, 10 seats in P, 10 seats in Q etc. Each class is priced differently, and they may have different restrictions (O can only be used if you spend at least 7 days away). The actual journey you get is the same, but the product you're buying is an O-class ticket or a P-class ticket.

When you book such tickets through an agent like booking.com, their booking engine asks the airline what tickets are available. Maybe it replies there is one seat in O left (costing $ooo), 3 seats in P ($ppp) and 9 seats in Q ($qqq). The agent website then tells you the price is $ooo and you proceed with the transaction on this basis. But maybe, when it actually goes to reserve with the airline, the seat in O class is taken. The option is either for you to walk away, or to buy the remaining P class seat, which is $ppp.

It sounds like this is what booking.com has done: it says 'sorry the fare you asked for is sold out, but we can offer you this other fare on the same plane for $ppp'. It is not changing the price, it's telling you that the airline refused to take the booking in O and offers an alternative in P instead.

Low cost airlines may do something similar, just without the lettered fare classes. Traditional air ticket booking platforms will usually hold fares open for a while to prevent such race conditions, but low cost airlines may not.

So this effectively boils down to a failed purchase: they took your money, they found they couldn't fulfil their side of the promise, they gave you your money back. They then present options for what you could do next. They aren't obliged to give you those options for no extra cost, since it is not their fault that what you originally requested is unavailable.