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Spotted excessive surcharges? Don’t let them get away with it

Blue credit card

A couple of weeks ago the government finally banned ‘rip off’ surcharges. We asked you to report any companies who weren’t sticking to the rules, and found that people are still being hit by unfair card charges.

When the ban on excessive surcharges began, we were pleased to report the Which? victory to more than 50,000 of you who supported our campaign.

However, our work doesn’t end here. We asked you to report any instances of companies who are now breaking the law by continuing to charge excessive surcharges. In turn, we agreed to investigate these companies and report them to Trading Standards.

Help us stop companies breaking the law

Since the ban came into effect, you’ve reported more than 200 companies for applying excessive surcharges.

For example, Jon from Newcastle told us his story. He tried to book his holiday through independent travel agent Purple Haze the day before the rules came in, and was charged £32 to book his holiday on a payment card.

According to the government’s new rules, surcharges must reflect the cost incurred to the firm for processing the payment. We estimate this to be no more than 50p per transaction for debit card payments, or 2% of the total transaction price for credit card payments.

However, on checking Purple Haze’s T&Cs after the rules had changed, Jon noticed the travel agent’s surcharges were still listed at the same excessive price.

Challenging ‘rip off’ surcharges

Jon’s story piqued the interest of BBC’s Money Box, who then challenged Purple Haze on why they weren’t complying with the new rules. Its chief executive responded:

‘That’s totally unacceptable, I apologise. We will take steps to ensure that Purple do not charge this sort of fee going forward’

Thankfully, Jon’s story had a happy ending as he was refunded the £32 he was charged, and Purple Haze has now changed its rules.

I want to encourage all of you to keep an eagle eye on companies charging excessive surcharges for card payments, and to report them to us if and when you find them.

But most importantly – make sure you complain to the companies who have charged you. Tell them if you think they’re breaking the law, and you may even get your money back.

Mary davies says:
1 June 2015

I just payed a parking ticket to Minster baywatch and was charged 4% for the privilege. I phoned them and they told me it was Paypal who made the charge not them. I did queery this as there was no mention of paypal anywhere on their site. I used my debit card to pay.

Emma Harris says:
25 July 2015

My husband and I were planning to buy a Big Green Egg with some wedding money. I went through the selection process on their website, choosing goods with the final total edging towards £1500.

I had my credit card at the ready, but on checkout I realised that they charge 2.5% for credit card payments – £33 for my large order.

Given the extremely high cost of Big Green Egg products, and the undoubtedly high margins they are making on these luxury items, it is laughable that they should charge customers to pay for their products.

I wrote to Alfresco Concepts (the UK distributor of Big Green Egg) about this matter. Their response is below:

‘Thank you for your email regarding purchasing a Big Green Egg using a credit card. Whilst we understand the protection offered when purchasing with a credit card, we also have to have to consider all of our customers. It is our company policy that rather than building banking costs into the price of the Big Green Egg, we add on a surcharge only to those who choose to pay by credit card, as these costs are charges we incur when taking payment through a credit card.’

‘We can assure you that we are a reputable company and do hope that this surcharge does not deter you from purchasing a Big Green Egg, perhaps you could add Big Green Egg gift vouchers onto your wedding list and this way you could purchase an EGG using these.’

I am not going to comment on this: this flimsy response speaks for itself. Needless to say I have taken all Big Green Egg products off our wedding list and purchased a rival BBQ. I will also report them for their high surcharges.

On asking around, I have heard that Big Green Egg has a reputation for overpriced products and poor customer service. Spread the word!

Given that high street retailers with expensive premises to staff and maintain seem to be able to take credit card payments with no surcharges it seems extortionate for traders who sell on line to add this extra amount to the cost. Usually there is not much alternative to using a card for an on-line purchase so it is effectively enabling the retailer to show a lower offer price for the product and regain the profit through an excessive credit card fee. Since they would go out of business if people refused to accept these surcharges and purchased elsewhere it would be good if people followed Emma’s example above.

Just received payment reminder from Reader Offers Ltd for balance of holiday booking (4 months ahead of travel ), specifying a 2.5% charge for credit card payments – in other words £35 on top of the balance. The alternative is to pay by cheque with no surcharge being specified. I’ll be disputing the credit charge with them tomorrow, but another issue comes to mind – if consumers decide to avoid excessive charges by not using their credit card, then they lose the protection of Section 75 under the Consumer Credit Act should the company go bust – a protection that doesn’t apply to debit card or cash payments.