It will look into issues such as ‘drip pricing’, where the cost of an item increases through the buying process; ‘baiting sales’, where a company advertises discounts when there are only a few items included; and ‘reference prices’, where a company artificially increases the price of a product in order to make the discount look more attractive.
Industry sectors such as airlines, car hire, ticket sales and insurance will be looked at in its investigation into drip pricing.
The OFT will also look into ‘must end today’ offers, ‘3-for2’ deals and mobile phone ‘free add-ons’.
Price comparison and switching websites will also come under scrutiny.
In a separate study, the watchdog will also look at how the habits and personal information of web users are used to created targeted online advertising.
Heather Clayton, a senior director at the OFT, says: “These studies will ensure that we keep up to date with the latest developments and, in particular, on how new pricing and advertising practices are emerging and evolving online.
“It is very important that the OFT’s approach to potentially misleading practices remains well-informed by a sound evidence base, so we effectively protect consumers while allowing firms to compete freely.”