Virgin must pay up for fares blunder

Virgin Trains tried raising the price of some of its cheap `walk- on' fares by six times the rate of inflation earlier this year. Randeep Ramesh, Transport Correspondent, explains why the price hike has meant Richard Branson will have to hand back pounds 24,000 to his passengers.

Travellers on the Virgin network have a choice of two fare scales. The first involves a change of trains in London and the second takes them around the Capital on a "through train". The second option was always cheaper than the first - until June, when Virgin raised the price of its "through" fares by 15 per cent, making it the pricier option.

However, ticket clerks did not realise the extent of the price hike and continued selling the "through" tickets to passengers as the "cheapest fare".

The price rise angered rail pressure groups and following a campaign in The Independent, the rail regulator has acted.

In a letter, John Rhodes, passenger service director at the Office of the Rail Regulator (ORR), wrote: "any instances of mis-selling of tickets is a serious matter and I have obtained an assurance from Virgin that passengers who have been over-charged will be compensated."

ORR confirmed that more than 2,000 tickets had been mis-sold. The average "excess charge" for each ticket is about pounds 12 - leaving Virgin with a estimated bill of pounds 24,000.

"We are in talks with Virgin at the moment about how to compensate passengers," said an ORR spokesman.

Barry Doe, the transport consultant who unearthed the mis-selling, said: "It would be wrong to blame the clerks because Virgin management failed to spot this error."

The problem for Virgin and the regulator is it will be difficult for passengers to prove that they were sold the wrong tickets. One suggestion would be to give a sizeable sum to charity and still compensate those passengers with "genuine claims".

"We would consider some sort of charitable donation as a good will gesture," said John Morris, public relations manager for Virgin Trains. Sources within Virgin suggested a contribution to the Diana, Princess of Wales memorial fund.

The company has backtracked since The Independent first raised the issue. In September, the chief executive of Virgin Trains wrote a letter to the editor, which was published, saying: "We normally respect Randeep Ramesh's reporting of the transport industry but on this occasion he's gone off the rails."

Pressure groups welcomed the decision to make Virgin pay. "It is good to see that in response to vigorous representations the regulator will now force Virgin to make good on its mistake," said Jonathan Bray, director of Save Our Railways.

Hundreds of passengers were evacuated from a train yesterday after a fire broke out in one of the locomotives.

The travellers were all taken off the Virgin West Coast service and put on to another train at Wembley Central Station, in north-west London.