I’ve been charged an excessive payment surcharge, what can I do?
Although legal, payment surcharges must be proportionate. Read on to find out what you should do if you think you’ve been charged an excessive payment surcharge.
Credit and debit card surcharges banned
From 13 January 2018 retailers and traders are no longer allowed to charge you a surcharge for using your credit or debit card when making a purchase.
This will apply to any UK company selling to UK consumers both in-store and online, and means customers using American Express, Paypal, Apple or Android Pay will also no longer face charges for using a different payment system.
The new rules stem from the new EU Payment Services Directive, which replaces an old directive of the same name and as such is often referred to as PSD2. This means the new rules were put into UK law - and so will continue to exist in the UK even after Brexit.
The government outlawed retailers from charging fees that are ‘excessive’ back in 2012.
Will I have to pay surcharges in the EU after Brexit?
In a no-deal Brexit scenario, any EU business selling a holiday or event from the EU to a UK consumer won't have to adhere to the surcharge ban.
This is likely to make holiday purchases more expensive, but this will be on a company by company basis.
If the withdrawal agreement is approved by the EU and UK, it's been agreed that consumer rights will remain unchanged until the terms of the future relationship between the UK and the EU are decided.
This transitional period will last from Brexit day on 29 March 2019 to 31 December 2020.
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.
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
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 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.
Additionally, if consumers spot any firm wrongly adding a surcharge for paying by card from 13 January 2018 they should report it to Trading Standards.
Remember, you can shop around to avoid retailers that make additional service charges, and you can refuse to accept additional card surcharges.
Join our campaign & help us reach 125,000 signatures
Two thirds of us think that companies use fees or charges to trick us into thinking that the cost is cheaper than it is. We're calling for all financial fees and charges to be upfront, fair and easy to compare. We want companies to take action and the Government and regulator to conduct a thorough review.