I’ve been charged an excessive payment surcharge, what can I do?

Although legal, payment surcharges must reflect be proportionate. Read on to find out what you should do if you think you’ve been charged an excessive payment surcharge.

Surcharges banned from January 2018

From 13 January 2018 retailers and traders are no longer allowed to charge you for using your credit or debit card when making a purchase.

This will apply to transactions on any credit or debit card, including Visa, Mastercard and American Express.

Since April 2012, the government has outlawed retailers from charging fees that are ‘excessive’. But many consumers still face surcharges of up to 3% on some transactions – a substantial amount, especially on big purchases. 

This has been difficult to police, as it falls under the remit of Trading Standards to enforce.

Excessive payment surcharges explained

Under The Consumer Protection (Payment Surcharges) Regulations 2012, traders are banned from charging consumers more than the cost of processing a payment method.

Payment surcharges are different from other kinds of fees and charges because they vary depending on the payment method you use, whether credit card, debit card, or cash.

Other fees and charges, such as booking fees or admin fees, are charged at the same level regardless of how you choose to pay.  

Based on Which? research, we estimate that the cost to traders of processing a debit card payment is only a matter of pence and that processing a credit card payment costs retailers no more than 2% of the cost of the transaction on average.

So, for example, a credit card surcharge on a £200 purchase should generally be no more than £4.

In summary

  • Under the Consumer Protection (Payment Surcharges) Regulations 2012, traders are banned from charging consumers more than the cost of processing a payment method
  • These Regulations do not apply to public bodies carrying out public functions
  • If you've spotted a company using excessive surcharges, you can report it to our Rip Off Charges campaign.

 If you have been charged a payment surcharge greater than these amounts, there is a chance that the payment surcharge was excessive.

It is worth noting that the Regulations do not apply to public bodies carrying out public functions.

So, for example, payment surcharges levied by a local authority when providing a public function (such as renewing a driving licence) would not be subject to these rules.  

Reporting excessive payment surcharges

Which? has campaigned against excessive payment surcharges since 2011 with the support of 50,000 members of the public. As part of our on-going campaign work, we want to ensure that companies are adhering to the Regulations.

We need your help to make sure companies do not abuse the rules.

If you’ve spotted a company that has exceeded these amounts, you can report it to our Rip off Charges campaign. We will share this with Trading Standards and encourage them to take action.

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