Credit and Debit card RIP-OFF fees stopped
The intention of the Consumer Rights (Payment Surcharges) Regulations 2012 act was to protect consumers from hidden and unjustly excessive fees (primarily card payment fees) and was brought in following recommendations from the Office of Fair Trading (OFT) at the end of 2011.
These excessive fees / charges are additional costs added to both on-line and in-person purchases and presented to customers, often as a complete surprise and undocumented, at the end of the transaction process. This is deemed an unscrupulous method of suppliers / retailers to add in extra profit whilst their front-end prices seemed deceptively more competitive. The cut throat airline / travel industry have typically been the worst offenders, but to a lesser degree many other retailers have been overcharging using this practice.
Now consumers should be able to see all charges ‘upfront’ and the additional costs passed on for paying using a Credit or Debit card should reflect the actual costs incurred in processing the payment and no more (within reason). These costs for example can include the reasonable apportionment of the purchase of payment machines and software development, which for smaller retailers can proportionately be greater and should be taken into account.
This act came into force on 6th April 2013
This was well ahead of the EU wide ban due in 2014 – But is it actually working?
Well, for most industries this will make the comparison of prices between retailers easier but it won’t make all overall prices cheaper because ‘administration charges’ are now being added as extra upfront charges (certainly in the travel industry). But it does mean that retailers prices will be simpler to understand and compare with all charges notified upfront.
Micro-businesses and start-ups are excempt from the ban until June 2014
Recommended charges for card payments
|Debit||50p||single charge per transaction|
|Credit||2% – 2.5%||of the total transaction.|
Trading Standards Officers and the OFT will be responsible for enforcing this ban rigorously and complaints should be made to Trading Standards.
UK GOV – BIS Guidance – The Consumer Protection (Payment Surcharges) Regulations 2012
Excessive Credit and Debit Card Fees Banned
BBC – 13th Apr 2013 – Card charges complaints continue
BBC – 6th Apr 2013 – Ticket charges: No more ‘excessive’ card surcharges
BBC – 27th Feb 2013 – Q&A: Credit and debit card surcharges
MoneySavingExpert – 5th Apr 2013 – Credit and debit card fee clampdown begins
MoneySavingExpert – 23rd Dec 2011 – Government to ban surcharges on debit and credit card payments..