Your help makes companies act on rip-off surcharges

I have discovered that many local authorities are similarly breaching the Consumer Rights (Payment Surcharges) Regulations 2012 for payments by credit card for on-street parking. Many councils contract out payments by credit card for parking to Park-Mobile (UK) Limited, which also operates under the RinGo brand name. Parkmobile adds a 20p surcharge for payments by card. This surcharge breaches Regulation 4 of the Consumer Rights (Payment Surcharges) Regulations 2012 which states “A trader must not charge consumers, in respect of the use of a given means of payment, fees that exceed the cost borne by the trader for the use of that means“. It costs a percentage (typically 1% to 2%) to collect payment by credit card. In all cases, this percentage will be less than the substantial cost of collecting payment by coins. Therefore if there is to be a price difference between payment by coins and credit card, there should be a discount for paying by credit card; a surcharge breaches the Regulations.

The Department for Business, Innovation and Skills has published detailed guidance on the Regulations which explains that Trading Standards have responsibility for enforcement. At the top of page 5 of the guidance, it is stated that car parking offered by local authorities is included within the scope of the Regulations. Although Regulation 5(j) excludes “automatic vending machines” from the Regulations, the breach occurs where such a machine is not used because Parkmobile processes payments by telephone or smartphone app.

Parkmobile claims that the 20p fee is a “convenience fee”. However, it is not relevant what the fee is called but whether or not it is dependent on the means of payment. For example, Ryanair called its £6 debit card surcharge an “admin fee”, which ceased because it would breach the Regulations. Likewise this 20p “convenience fee” breaches the Regulations.

It is immaterial that local authorities contract out processing of card payments to an external company, even if it chooses to process cash payments in-house. Either Parkmobile’s processing fees must be paid and absorbed by local authorities or the costs of all payment methods must be added to advertised parking charges. It is not permissible under the Consumer Rights (Payment Surcharges) Regulations 2012 to surcharge for one payment method and not for another where the surcharged payment method is less costly.

It is immaterial that local authorities do not receive this payment surcharge, because they are the suppliers of the service and responsible for ensuring that any payment surcharges comply with the Consumer Rights (Payment Surcharges) Regulations 2012.

20p might sound like a small amount of money, but it is a hefty 20% surcharge on a typical £1 parking charge and in aggregate the amounts are huge. Trading Standards within local authorities seem reluctant to take action against their colleagues in their parking departments; there is a conflict of interest here. I have consulted Which Legal Service, who confirmed that the surcharge is a breach of the Regulations. Perhaps Which can put pressure on Trading Standards to take action across the country.

Another remaining culprit is mobile phone networks. Although the Regulations don’t apply to contracts started before 6th April 2013, the mobile networks are charging around £3.50 per month if the customer pays by any means other than direct debit, even bank transfer, irrespective of when the contract started. Even with a business bank account, it costs nothing to receive an electronic payment from within the UK.

As stated on page 12 of BIS’s guidance (see my post above), a business cannot take into account general administrative overheads. Therefore if it has to spend more time chasing customers who pay by bank transfer compared to direct debit, it cannot take these costs into account in its surcharges. It can use only the cost of the payment itself, not any difference in the general overheads of servicing each category of customer.

The same is true of gas and electricity suppliers, but that one is more complicated because the payment frequency is different for payment by direct debit.

I’ve tried reporting a surcharge twice on different days including today, and I just get an error message saying “We are unable to display this action, our trained lemmings are investigating the issue, thank you for your patience“.

Somebody should be looking very closely at SUNMASTER.CO.UK.
They have charged me 1.5%for paying by debit card.. And
Offer one price on the website, but confirm your booking by phone, which by then your flight has unfortunately gone up in price…
Accepted my booking for the hotel that was actually closing before my holiday dates… Wouldn’t let me choose my own alternative or have a refund…. Then charged me for the alteration that was their fault! In the end, I have paid roughly £300+ extra to the price when booked online.
Needless to say I won’t be booking with them ever again and duly warn people to beware when they are buying through them.

There is an entertainments venue near where I live, called Anvil Arts. They have been charging a £1.00 booking fee per ticket when you pay by card, for quite sometime now. If you paid by cash at the counter however, you would not be charged the booking fee.

However they recently changed their minds on this. Every ticket purchased is now subject to the astronomical £1.00 charge, even if you pay with cash in person.

I think this is totally wrong and don’t think they should be getting away with it. I mean is it legal to charge a transaction fee if you pay by cash anyway?

The company have basically given a load of old rubbish about why they have to do this, but it doesn’t wash with me and a few other people it seems. Somebody has already hit out about this, in my local paper.