Kiwis paying tens of millions of dollars extra in 'sneaky fees'

Two-thirds of consumers have been stung by extra costs when buying goods and services. Photo / 123rf

Consumers are paying up to $68 million in sneaky "service" or "booking" fees added by retailers to advertised prices.

Consumer NZ revealed the figure today, calling for the Fair Trading Act to include rules requiring businesses to disclose the full cost of products up front.

Chief executive Sue Chetwin said its latest survey found more than two-thirds of consumers had been stung by extra fees when buying goods and services.

A similar amount, 68 per cent, agreed retailers should have to disclose the total price in their advertising, Consumer NZ's survey found.

Examples given by Consumer NZ included a woman buying tickets to a play who was charged three extra fees on top of the ticket price: a $1.50 service fee for each ticket, $1 for printing the tickets as well as a $2.88 credit card fee.

Another example showed an island holiday to Fiji was $71 more expensive than the "from $699" price it was advertised for, once a service fee quoted by the travel agent to Consumer NZ was added.

"These charges, often called booking or service fees, are increasingly common in the travel and entertainment industries," she said.

"But they're not included in the advertised price, misleading consumers about what they actually have to pay."

Adding fees to the advertised price was known as "drip pricing", Chetwin said.

"By the time the add-ons are revealed, consumers are more likely to be committed to the purchase and less likely to shop around.

"While the Fair Trading Act prohibits misleading representations about price, it hasn't been effective at stopping drip-pricing practices."

Chetwin said New Zealand should follow the lead of countries like Australia, where companies were prohibited from advertising a component of a price without prominently displaying the total amount.

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.

Consumer NZ is inviting people to sign its online petition to get the law changed. The petition can be found at consumer.org.nz/sneakyfees.

Consumer NZ also encouraged participants to name and shame the companies they thought had the worst sneaky fees, either in a comment on the website or via email.