Travel companies have been
ordered to end the use of hidden debit card surcharges by the
Office of Fair Trading (OFT), following a super complaint by
consumer watchdog Which?
While the OFT wants the law changed to abolish debit card
fees altogether, credit card fees will still remain but must be
made clear to consumers from the start of the booking
process.
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The OFT said travellers spent
£300m ($479m) on card surcharges in the airline industry
alone.
“Thousands of people have
told Which? that hidden or excessive card fees are unfair,
and we are delighted that the OFT supports this view – it is a
victory for consumers,” said Peter Vicary-Smith, chief executive of
Which?
“We want to see the measures recommended by the OFT put in
place as quickly as possible to finally put an end to the practice
of card surcharging.
“While we understand that
some of the regulatory changes will take some time, we urge the OFT
to take steps immediately to ensure that consumers know the true
cost of their purchases up-front.
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By GlobalData“Businesses can start to be
upfront and fair over card charges today – there is no point
waiting until the OFT forces them into action.
“They should not drag their
feet over this.”
Earlier this month, Monarch
Airlines blasted its rivals for “stinging” customers with hidden
fees as it made moves to abolish debit card fees and cap credit
card fees for booking flights.
All customers using debit
cards to book Monarch flights will incur no booking fees, while
those using credit card will be levied a £10 fixed fee, regardless
of the value of the transaction and the number of people
travelling.
Monarch is currently in
negotiations with credit card companies to reduce fees further and
has pledged to cut the amount it charges customers upon the
successful completion of such talks.
“In these difficult economic
times, there is absolutely no justification advertising one fare
and then stinging consumers with hidden excess charges,” said
Conrad Clifford, CEO of Monarch Airlines Group.
“We would prefer not have to
charge customers for using any payment cards at all. But by
abolishing debit card fees and introducing a flat fee for using
credit cards, we are doing everything we can to be transparent and
fair to our customers.”
While the actual cost to a
merchant to process a debit card transaction is believed to be no
more than 20 pence and 2% of a credit card transaction,
Which? has found numerous examples of companies charging
far higher fees.
Low-cost airline Ryanair has been identified as among the
worst offenders of this practice, with a family of four being
charged £40 in booking fees for a return flight with the
company.
