THE Office of Fair Trading has issued a warning to holiday and travel suppliers to ensure that they are not misleading consumers about prices.

The warning comes as the Association of British Travel Agents (ABTA) has agreed to remind its members that their Code of Conduct, which is binding on all members, requires all fixed non-optional costs to be included in the basic advertised prices of their holidays.

ABTA says it will take firm action against any member who fails to comply with its Code of Conduct.

The OFT says it is aware that certain fixed non-optional costs are frequently excluded from basic advertised holiday and travel prices. These include, for example, fuel supplements which can add up to £65 per person to the price of a flight or holiday.

When the extra costs are added on the price is significantly higher than advertised. In one example, the price of a flight from the UK to Barcelona advertised at £19.99 was more than double when all fixed non-optional costs were included.

According to ABTA, its members are responsible for the sale of 90 per cent of foreign package holidays in the UK.

The OFT says it now expects all holiday and travel suppliers, including non-ABTA members and airlines, to make sure they include all fixed non-optional costs in their basic headline prices so that they do not mislead consumers.

Failure to comply in future will likely result in the OFT taking enforcement action.

John Fingleton, OFT Chief Executive said: "Giving misleading price indications to consumers makes it very difficult for them to compare prices offered by different operators.

It distorts consumer choice and competition and undermines consumer confidence in the market."

The OFT says it welcomes the action taken by ABTA, and will monitor the situation, taking enforcement action where necessary against any airlines, tour operators or travel suppliers that fail to comply with the law.