Estate agents are profiting from debit and credit card surcharges, according to new Which? Money research.
The research shows that of the top 20 UK estate agents by branch network size, four – Andrews, Foxtons, Knight Frank and Badger Holdings – charge for debit card transactions, and 13 charge for credit cards when renters pay their deposit.
The highest charge for credit cards was 5% from Andrews, well above the estimated 1% to 2% cost of processing a credit card payment. With the most recent figures putting the average national rental price at £713 the credit card charges would add £53 to the typical six-week rental deposit. For London properties this would add £77.
For debit cards the highest charge was 0.5% from Foxtons and Knight Frank, although recent Which? research showed the actual cost of a debit card transaction is closer to 10p. The most recent figures from LSL Property Service show that whilst rental demand is surging, 11% of all UK rent was unpaid or late by the end of the month, compared with 9% in July. Unpaid rent totaled £300m across the UK in August.
The surcharge rip-off
The figures follow Which?’s super-complaint to the Office of Fair Trading (OFT) in March this year, asking the regulator to investigate excessive credit and debit card surcharges.
The OFT responded on 28 June proposing that debit card surcharges be banned. This could be achieved by a simple amendment from the Treasury to the Payment Services Regulations. However, as yet the government has taken no action and consumers will have to wait until 2013 for the Consumer Rights Directive – which will limit charges – to be implemented.
Join our campaign
You can pledge your support for government action and join our campaign to stop rip-off charges by e-mailing Financial Secretary Mark Hoban .