Business

Debit card surcharges must go, says Which?

  • 6 September 2011
  • From the section Business
  • comments
Media captionRichard Lloyd, executive director of Which?: "Consumers are in the dark"

A consumer group has stepped up pressure on the government to ban surcharges on online debit card travel purchases.

Consumers' association Which? said a small amendment to current legislation was all that was needed to outlaw the practice.

In June, the Office of Fair Trading (OFT) proposed a change in the law to abolish such charges.

The government said it was working on a response to the OFT's recommendation.

As consultation ends on the OFT's recommendations, Which? said that an amendment to the Payment Services Regulations by the Treasury could outlaw these debit card surcharges.

"With most airlines yet to drop these card surcharges and some introducing new fees, it is time for the government to put a stop to this," said Richard Lloyd from Which?

"A minor change to the law is all it would take to ban the charges on debit cards that you only find out about at the end of a lengthy online booking process," he added.

Clear charges

In June travel companies were ordered by the OFT to make all their card surcharges clearer to passengers.

Typically they find they have to click through four to six pages of an online booking system before the card surcharge is finally added to the price.

The regulator said that travellers spent £300m on card surcharges in the airline industry alone in 2010.

Despite a recommendation to abolish surcharges altogether on debit cards, two airlines - Lufthansa and Swiss - are planning to charge a £4.50 fee on all card payment bookings from 2 November.

Some other airlines already charge more than this for debit card transactions.

The OFT found that the airline Easyjet charged a surcharge of £8 for payments by debit card, and £8 plus 2.5% of the total transaction for credit card users.

Ryanair charged a fee of £6 per journey for both credit and debit card users.

Enforcement

A Treasury spokesman said: "The government is committed to working with the OFT to stop retailers, including airlines, imposing hidden surcharges on customers who pay by card.

"We are considering the OFT's recommendations and will respond in due course."

The OFT has promised an update by the end of the week on whether it would take any action against travel companies hiding their online booking card surcharges.

"We made it very clear that passenger travel companies have been put on notice to change misleading debit and credit card surcharging practices or face enforcement action under consumer protection laws," a spokeswoman said.

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