Taken For A Ride: Budget holidays - Deal Or No Deal?

Britain's leading consumer watchdog, the Trading Standards Institute (TSI), has accused some of the travel industry's biggest players of misleading customers when advertising package holidays online.

As a result of regular checks made by the TSI, the latest of which was last week, it seems those tempting offers of a week in the sun for as little as £50 per person are indeed too good to be true.

"In recent years we've become aware of an increasing lack of transparent pricing in online advertisements," says Bruce Treloar, the TSI's lead officer for travel and holidays. Mr Treloar cites a week-long package to Mallorca recently advertised online by a well-known operator. Although the price suggested the break cost "from £54" per person, by the time compulsory charges such as tax and fuel surcharges were added, the final price was £108 per person. In another example, a seven-night holiday to Lanzarote was advertised from £84 per person. Once compulsory charges were added, the actual cost was £392 for two.

"It's a serious issue for consumers," says Mr Treloar. "And in almost all cases, when these sorts of offers appear online, the real price is at least 100 per cent more when mandatory fees are taken into account. When you click through and try to book at the price advertised, it just isn't possible."

Under data protection legislation, Mr Treloar says he is unable to specify who is advertising what and for how much but, he claims, the TSI has evidence to suggest the practice is commonplace among the more well-known high street operators.

"One of the biggest issues we have is with fuel supplements. Our research shows that at least two of the big four buy their fuel well ahead [of scheduled flight dates]. They are hedging against inflation, which is fair enough, but it also means they know the precise amount this will add to the price of their holidays."

Despite the presence of more than 200 Trading Standards offices around the country, complaints from consumers are few and far between. "That's because customers don't realise the practice is illegal," says Mr Treloar. "The Consumer Protection Act (1987) is a piece of pricing legislation that, among other things, stipulates that if you advertise a price, it must be inclusive of all "non-optional" extra charges. We also have evidence that two of the big four operators are stripping out the new tax increase on flight prices (around £5) announced by Gordon Brown in his recent pre-Budget report."

One company endeavouring to buck the trend is Trailfinders. "The public and the industry would all be better off with more transparency, or at least a better understanding of true costs," says Mike Gooley, the company's chairman. "We include all prepaid fuel, tax and security charges in our air fares and holiday prices."

Mr Treloar says the TSI will, in due course, be submitting its findings to the Office of Fair Trading which has the power to take legal action. The TSI is also in negotiations with the Association of British Travel Agents (Abta), another organisation keen to stamp out the practice. And being upfront about costs would seem to have its benefits. "Around 90 per cent of our customers refer us to their friends," says Trailfinders' Andrew Appleby, "because the price they see is the price they pay."

A lack of transparent advertising is not just confined to the major tour operators. In 2005, Essex Trading Standards took Ryanair to court over misleading pricing, with the budget carrier fined £24,000 as a result.

The fact that consumers are being duped may seem obvious but it's a view the Government does not necessarily share. "The courts are of the opinion that if customers aren't complaining, then where's the harm?" says Mr Treloar. "While we have some sympathy with that view, the fact remains that people are getting a raw deal when booking online."