Friday, 23 December 2011

Excessive card surcharges to be banned by end of 2012

"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.

See the UK "BBC News" website article:

The BBC News article explains:
Examples of these charges are a £6 per person, per leg "administration fee" charged on all but one card by Ryanair, an £8 per booking charge by Easyjet - plus 2.5% when using a credit card, a £4.50 per booking credit card fee from British Airways, and a charge of up to 17 euros (£14.16) per person by Air Berlin.

Local authorities and the DVLA also levy charges, as do many train, ferry, theatre and cinema ticket merchants.
The issue of high surcharges prompted the consumers' association Which? to call on the regulator to investigate, saying "the price you see should be the price you pay".
In effect, the government is bringing forward the implementation of new European rules, which were pencilled in for mid-2014.

Richard Lloyd, executive director of Which?, said that debit card transactions cost the trader about 20p, and credit cards cost about 1% or 2% of the total price.

"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. Ryanair responded to the government's announcement by saying that it charged an administration fee - which also covered the cost of running the website - rather than a surcharge.

The OFT 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.

Andy and Sarah Rosser of Cala D'or Mallorca Holiday Apartments welcome all recent changes reducing the complexity and cost of planning and booking DIY holidays.  Flight booking charges, mobile phone call and data roaming charges are some of the more invasive hidden costs bourne by the modern independent travellers.

Making charges and costs more transparent, obvious and reasonable can only help, not the travellers incurring the costs, but also the industry who are often seen as being unfair and provoking expressions like 'ripped off'.

Let us hope the organisations decide that addressing the problem before it is forced upon them by laws and legislation would be good for the PR and image!

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