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Government stalls on banning ‘rip-off’ card surcharges

Companies cashing in on surcharges

Consumers continue to pay extortionate debit and credit card surcharges as Ministers drag their feet on banning card surcharges by the end of the year.

In December last year, with the help of 50,000 supporters, we secured commitment from the government to ban excessive surcharges by December 2012.

Since then, nothing has happened and today the Financial Secretary to the Treasury, Mark Hoban MP, said the government was committed to banning excessive surcharges but did not confirm that it was sticking to its promise to bring in the ban by the end of 2012.

The charges continue one year on from the Office of Fair Trading’s decision to uphold our surcharge super complaint.

Government must take urgent action

Which? executive director, Richard Lloyd, said: ‘The government must take urgent action if it is to meet its promise to consumers to ban excessive card surcharges by the end of 2012.’
He added: ‘At a time when so many people’s budgets are stretched, it’s unacceptable for the government to be stalling on this issue.’

While the government stalls, consumers are still paying the price with many major airlines continuing to impose heavy fees.

Airline surcharges hit consumers

All of the 13 airlines we investigated still apply card surcharges and Monarch has increased its charges in the last six months for some customers. Monarch now adds a £5 fee or 4% charge for credit card payments (whichever is highest). That means a family of four spending £2,000 on return tickets this summer has to pay an extra £80 in card surcharges.

Which? has investigated other businesses and has found that the DVLA, a government agency, also continues to charge £2.50 for paying by credit cards. Other travel businesses imposing the fees include Irish Ferries, P&O, Stena Line, Eurostar and The Trainline.

The surcharge super complaint

Which? submitted a super complaint to the Office of Fair Trading (OFT) in March 2011. We asked the regulator to investigate excessive credit and debit card surcharges.

We asked for charges for using a debit or credit card to be fair and transparent, and proportionate to the costs that businesses pay for processing the payment – approximately 20p for a debit card.

We also asked for all charges to be included in the headline price so that it is easier for consumers to shop around and compare prices.

The OFT committed to taking enforcement action against companies that persist in hiding the cost of paying by card, but has yet to do so.

Mr Lloyd said: ‘The OFT should also be cracking down on businesses to stop the rip-off. It’s outrageous that so many are cashing in on surcharges while they still can.

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