UK to ban high credit card surcharges

2011-12-23 23:00
London - Britain plans to ban companies from making their customers pay excessive credit and debit card surcharges when buying flights and other services, ahead of a similar move by the EU.

Firms will be allowed to add just a small charge to cover their actual costs.

Payment surcharges are especially prevalent in the airline sector, where Britain's Office of Fair Trading (OFT) has estimated that British consumers spent £300m ($470m) on such fees in 2009.

"We want to make sure that consumers paying by card do not have to pay excessively high surcharges being imposed on them by some airlines and other businesses," said consumer minister Edward Davey said in a statement on Friday.

The ban will apply to most retail sectors, not just the transport sector.

Investigation

The EU Consumer Rights Directive will ban businesses in many sectors, including airlines, from imposing above-cost surcharges on payments from mid-2014.

The British government plans to consult on implementing this provision of the directive early, with the goal of banning above-cost surcharges by the end of 2012.

"We need to consult to get those rules right. We need to make sure the right process is in place to help consumers challenge companies that levy excessive surcharges and we need to give business some time to get their systems ready," said Treasury minister Mark Hoban.

Irish airline Ryanair said its £6 booking administration charge did not apply to all cards.

"I would not expect the rules to affect us as we don't impose any debit or credit card fees. Our administration charge can be avoided using certain types of cards," said Ryanair spokesperson Stephen McNamara.

In June, the OFT called for the law to be updated to stop surcharges on debit card payments after consumer group Which? asked it to investigate.

Which? said card surcharges were often sprung on the customer at the point of payment and could be much higher than the retailers' costs in processing the transaction.

The consumer group singled out low-cost airlines, such as Ryanair and Britain's Flybe and easyJet, which it said charge fees per passenger, per leg of a journey, even though they only have to process one transaction.

Which? said excessive charges were also spreading among cinemas and hotels.

A Flybe spokesperson said the airline had been fully engaged with the OFT and the Civil Aviation Authority to ensure that ancillary charges, including card surcharges, were clear from stage one of the booking process.

He said Flybe would respond to the government's consultation by providing details of the costs it faced, "including the card companies' insistence that all airlines lodge substantial cash reserves to cover their losses in case of claims against the card companies".

EasyJet declined to comment.

The UK Cards Association, representing the debit and credit card industry, called the government's move "a terrific Christmas gift for consumers".
Read more on:    uk  |  economy
NEXT ON NEWS24X
SHARE:

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
4 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
/News
 

Joburg hot spots for cocktails, craft beer, tapas and wine!

It’s the season to be jolly – so we’ve rounded up some new Joburg hot spots!

 
 

I love summer.24

The craziest deaths of 2014
How to make this a sensual, sexy summer!
This is what South Africans Googled in 2014!
This hilarious song is your new holiday anthem

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Kalahari.com - shop online today

2DAYS ONLY – 30% off Appliances

Coffee makers, blenders, fans, juicers and more. T&Cs apply. Shop now!

2 DAYS ONLY – 40% off books

Get 40% off when you buy 2 books. For two days only! T&Cs apply. Buy now!

Up to 50% off on outdoor gear

Save on chairs, blankets, cooler bags, umbrellas and more. Shop now!

Save on Samsung

Cameras, mobile phones, TVs, Tablets and more. While stocks last. Shop now!

Grand Theft Auto 5

Now available on PS4, Xbox One and PC from R649. Buy now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Horoscopes
Aquarius
Aquarius

There is so much going on around you and inside your head. You may want to take your ideas to the next level. Romance may be...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.