Excessive card surcharges will be banned, says Treasury

[davieG]

BBC

"Excessive" fees for using a debit or credit card to buy items such as travel or cinema tickets will be banned by the end of 2012, under government plans.

The move comes amid complaints that airlines, booking agencies and even councils were imposing excessive charges for using a card.

However, firms will be allowed to levy a "small charge" to cover payment processing costs.

The regulator has been investigating some airlines over surcharge clarity.

Complaint

Consumers buying a ticket online are often charged extra when they tick a box that says they intend to pay using a credit or debit card.

Sometimes, consumers have found the payment is only added after they have ploughed their way through up to eight web pages.

The issue prompted the consumers' association Which? to call on the regulator to investigate, saying "the price you see should be the price you pay".

However, it accepted there could be an additional cost added for the cost to the retailer of accepting a card.

The regulator, the Office of Fair Trading (OFT), published a report in June about the travel industry's use of surcharges.

It said charges must be clearer and surcharges for using a debit card should be banned.

Now, the government is planning to go further than the OFT's recommendations and change the law so all "excessive" surcharges are banned.

'Ripped off'

In effect, the government is bringing forward the implementation of new European rules, which were pencilled in for mid-2014.

These rules said that only the actual cost of processing card payments could be charged to consumers.

Some airlines have faced criticism from consumer groups for their policies

Speaking on Radio 4's Today Programme, Financial Secretary to the Treasury Mark Hoban said: "It's important that consumers know up front what charges they pay.

"What we have announced today will give consumers the transparency they need.

"I think consumers do feel ripped off and we want them to be able to shop around."

Richard Lloyd, executive director of Which?, welcomed the move.

"Given that airline passengers alone pay more than £265,000 a day in card surcharges, businesses should not drag their feet over this," he said.

"While the law will come into force at the end of 2012, we want companies to be upfront and fair over card charges today."

He hoped that the Irish government would work at the same pace as the UK government in implementing the changes, to cover traders and travel companies based in the Irish Republic.

The process of accepting credit or debit cards as payment is quite complex, although retailers point out that they absorb this cost in their sale price.

The OFT calculated that travellers spent £300m on card surcharges in the airline industry alone in 2010.

It has been investigating some unnamed airlines over the "transparency and presentation" of their surcharges.

The government will launch a consultation at the start of 2012.

[jonthefox]

Thank god for that. This has got to be one of the biggest ripoffs ever. I recently bought a concert ticket with a £5 cc charge and £5 delivery charge.

Whilst i was moaning to my mrs , she was booking a flight to belfast for her dad (ryanair) and she was clobbered for a £40 charge

[Jace]

all we will see now is the cost of the goods itself increase I reckon

[jonthefox]

all we will see now is the cost of the goods itself increase I reckon

True. These feckers get thier pound of flesh regardless.

[Webbo]

Ironic that the govt are banning this, the only time I ever pay 1 of these surcharges is when I pay my car tax online.

[ithuriel]

I despise the way many a company now rip peeps off, you are'nt seen as a customer anymore but as sheep to be fleeced, the getting charged for a bloody paper bill thing really annoy's me.

Which ever sock cooker thought that one up should be found, tied to a chair and made to watch Eastender's continuosly for a year.

[dave the caveman]

bullshit, just got back from clintons and they're like £3 even for the shit ones. I'm in the wrong business.