Unscrupulous traders can no longer charge rip-off plastic card fees

Simon Read

Simon credit cards 225x300 Unscrupulous traders can no longer charge rip off plastic card feesThere’s good news for a change. New regulations come into force today which should stop retailers from charging customers “fees that exceed the cost borne by the trader for the use of that means”. In other words shops and others must no longer add extra fees if you dare to use a credit or debit card.

The Consumer Rights (Payments Surcharge) Regulations outlaw hidden charges. Under the new rules, traders will be expected to make sure that any payment surcharges are representative of the actual processing cost involved and they do not charge more than this.

It’s hoped this will make the process fairer and more transparent for consumers and no longer result in hidden, expensive charges at the end of the payment process.

The surcharges are often used when booking flight tickets but are also imposed by some retailers in other sectors, including rail, event tickets, cinemas, car dealerships and hotels.

The Office of Fair Trading reckons that consumers spent around £300m on payment surcharges in 2010 in the airline sector alone.

Everyone should welcome this, apart from unscrupulous traders who will lose out on a little of their extra profits!

Andy Millmore, a partner at law firm Harbottle & Lewis said: “A significant hidden extra by which some retailers load a charge beyond the actual cost of processing a credit or debit card transaction should now end. The challenge will be how customers are supposed to know what is and what is not the legitimate processing cost.

“Retailers should not be complacent about these changes. They could face legal action if found to be charging more than they are charged by banks.”

Consumer Minister Jo Swinson said: “The practice of excessive payment surcharges has been ripping off consumers for far too long.”

Citizens Advice Chief Executive Gillian Guy said: “Companies have been ripping people off left, right and centre by adding price hikes to credit and debit card payments for flights, events and hotels.

“It is great news for shoppers that these excessive charges have been banned today and that people will only have to pay what it actually costs to process the payment.”

Let’s hope that proves to be the case.

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  • kawasakiman

    “Unscrupulous traders can no longer charge rip-off plastic card fees”

    But they will, won’t they.

  • simon read

    I suspect they will find a way!

  • racdula

    Cruise Lines and Travel Agents are among the biggest rip-off merchants.

  • P Windsor

    Travel agents will just call it a “booking fee” and carry on.

  • abogadoNZ

    Next stop the booking fee. You can almost see the nasty little Michael O’Leary planning his next new charge….

  • Calum Bennie

    I am not sure about this – Thomson Holidays charge a 2.5% fee for cc bookings and they don’t seem to have any plans to replace this

  • Rajan Mahadevan

    The rip-off charges will just change hands and reappear in a new disguise elsewhere.

  • SandySure

    They can’t charge if you don’t agree.

    It is annoying when charges suddenly appear at check out but you can still walk away.

    Just as people must show prices inclusive of VAT, so they should show the extras up front and not in small print.

  • John M

    In the same way that most “events” charge booking fees and not card fees. Seems that as long as you don’t call it a card fee you’re off scot-free.

  • David Noonan

    This country has become the epicentre of stealth charges to consumers, using any underhand way to squeeze profit margins for the benefit of greedy shareholders.

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