/ Money

We did it! Unfair card surcharges are being banned

Champagne bottle being popped open

With your support, we’ve lobbied long and hard to make ministers see sense about the unfair charges consumers have to pay when using cards. Now the hard work’s paid off – excessive surcharges are being banned!

On the first day of Christmas my true love gave to me… a ban of excessive debit and credit card surcharges.

After 43,202 pledges of support, 2,430 emails to Ed Davey, 8,765 emails to Mark Hoban MP, 12 letters from MPs (that we know about) sent to Mark Hoban, 9 parliamentary questions, 2 early day motions, 2 parliamentary debates and 40 ‘rip-off’ branded cupcakes, victory is ours – excessive debit and credit surcharges are banned!

How the ban will work

Today the government announced that it is banning excessive debit and credit card surcharges and I couldn’t be happier. This is a massive victory for thousands of you who have supported the campaign since we first submitted our super complaint to the Office of Fair Trading (OFT) in March.

The government will ban surcharges by implementing the Consumer Rights Directive – an EU law – in December 2012 rather than June 2014. This was the law we asked you to lobby Edward Davey about back in May, so all your nagging has certainly paid off – thanks Ed!

The Consumer Rights Directive will prevent excessive charges being levied. In practice, we imagine that will mean that the tiny cost of a debit card will be absorbed by the business, and credit card charges will be no more than the true cost incurred to the retailer for processing the payment. So goodbye to excessive £6 fees for a £30 flight!

Businesses need to catch-up quickly

While it’s been a lot of hard work, we’ve managed to have some fun along the way too. You may remember that back in November we sent Treasury Minister, Mark Hoban, 40 branded cupcakes as a thank you from the airlines for £40m they had earned in surcharges since June. We think it was his sweet tooth that finally drove him to doing the right thing.

Now that the government has taken action on this important issue, we want businesses to bite the bullet and quickly make the changes needed so you no longer have to pay for the privilege of paying.

I hope you’re all as excited about the ban as me, this victory is a great way to end the year and an early Christmas present for us all.

Comments
Guest
David says:
17 February 2012

A certain airline that is identified for excessive card charges will simply move their booking office to Eire and still continue to charge for card transactions as the legislation will only apply to the UK.

Guest

The Consumer Rights Directive requires maximum harmonisation so all companies operating in EU companies will have to abide by the same laws.
Happily the UK and Irish Governments have been working together on bringing Article 19 (the surcharges article) forward. Deputy Richard Bruton, the Irish Minister for Jobs, Enterprise and Innovation announced last year he’d be bringing forward implementation of Article 19 – he also recently reiterated this move in a parliamentary question. So an early ban on excessive card charges should come in across the UK and Ireland at the same time.
See here for more info: http://www.djei.ie/press/2011/20111018.htm
http://debates.oireachtas.ie/dail/2012/02/21/00186.asp

Guest

A famous British Airline has just charged me an £18 fee for using a credit card for a European return flight for four. No wonder they can afford to fly with the red,blue and white libery and help sponsor a number of different British sports teams .
Fair enough if the fee they charged covered their extra costs but £18 is excessive

Guest
Edward says:
18 February 2012

If you are referring to British Airways, while it is supposed to be the ‘national airline’ of the UK, I cannot say that they are the most competitive airline.

They should be paying sponsorships from their profits and not impose UNFAIR extra charges on consumers.

A £4.50 booking fee, if you paid by card, is also unfair.

Guest
Peter says:
21 February 2012

Hi Edward
The fees I mentioned were directly linked to credit card payment. Use of a debit card in either case did not attract a separate charge.
Peter

Guest
Edward says:
21 February 2012

Hi Peter,
Thanks for clarifying card fees. I am concerned whether the Which? campaign will be able to put pressure on the government to ensure that unfair card charges are stopped. This has already become a free for all because the implementation of the EU directive does not come into effect until later this year. It does seem that companies, including arlines, have adopted the tactic of introducing booking fees to try and fool consumers about hidden charges.

Can Which? please shed some light on the current situation and whether the EU directive will force companies, banks etc., to drop their unfair charges and halt rip offs of consumers.

Guest
Karen says:
29 February 2012

How can it be called a success that it now costs more to pay for ordering Easy-jet tickets? The new administration fee is more transparent, but it is higher than the fee you paid by using debit card!

Guest
Edward says:
29 February 2012

Hi Karen,
You have made a valid point and I really do believe that Which? on behalf of ripped-off Consumers’ should now launch another campaign, to stop these higher unfair card charged. Why are companies and banks jumping on the gravey train by imposing extra charges, ahead of the government’s legislation later this year?

Guest
Dr Cornel Fleming says:
1 March 2012

In reply to Mark Hoban…..so why does the DVLA charge £2.50 ???????

Guest

Thought you’d be interested to see that Mark Hoban is hosting a Twitter Q&A at 4pm on Monday 5 March 2012. This is a great opportunity to remind the Minister that we’re expecting a swift result on surcharges and also raise some of the questions you have about his plans to tackle the issue. You can send your questions to the Treasury’s twitter account at @hmtreasury – for those who are not on Twitter, don’t worry, we’ll be sending him questions too.

Guest
Kay says:
13 March 2012

I recently took my 2 grandsons aged 11 and 5 to the cinema and booked the tickets on line using my DEBIT card. There was a charge of £2.25 for using my card.

I have also booked a holiday with Travel Republic to Egypt and was charged £10.00 for the privilege of paying with my DEBIT card.
Why do companies charge for using a debit card when the money is automatically transferred from my bank account to the theirs.

Guest

The cinema will incur a small cost to take debit cards and will make a profit on the card charges. The same applies when they sell you popcorn. If there is an opportunity to make a profit, many companies will do it.

Guest
Malcolm says:
27 March 2012

What is an immediate concern is about the delayed implementation date. London is about to become the showcase for the UK in the Olympics. A demand for cash on arrival here to pay a taxi fare seems positively outdated and probably inconvenient and a payment by credit card is a rip off. Taxi drivers should be shamed into accepting card payments without surcharges in the broader interests of giving our Country a more positive image to overseas visitors.

Guest
Susan says:
5 April 2012

I have just been charged £62 for paying the balance of my holiday on my credit card. How is that 2.5% fee justified? It was through First Choice who must be making a fortune from these charges.

Guest
Cadfael says:
10 April 2012

Just been stung by a £5 card charge on top of a £45 charge for a change in car insurance details. I have been foolish enough to purchase a replacement car at a time other than my policy renewal date, albeit renewable on the 1st May. The impression is that money can be made at this so lets do it. I don’t object to reasonable charges but what amounts to an extra £50 for less than a months insurance is taking the micky. Needless to say this one time Which best buy won’t be getting my custom any more.

Guest
Alastair says:
11 April 2012

Just been charged £40 credit card fees by BMIBaby – over 5% of the flight costs. Role on Dec 2012! Can we retrospectively claim back these unfair charges?

Guest
Bob Hesk says:
21 April 2012

Tried to book two nights accomodation with Holiday Extras.They would only accept two seperate nights each attracting a £1.50 credit card charge , eqivalent to 3.95%. Spoke on the telephone to them and there is no way round it. What a rip off ! Booked a return flight to New York with Virgin Atlantic which included a charge of £11.69 for credit card use. So it goes on.Why the delay in legislation to the end of the year ?

Guest
Edward says:
21 April 2012

Hi Bob,
I believe that the date for the introduction of this new law for the prevention of companies & banks charging excessive [and unfair] fees for Card usage to pay for goods and services comes into effect in December 2012. This is the edict given by this government.

Why they could not legislate sooner, i.e. since 2011 is anyone’s guess. Moreover, I think that this lapse period is to allow companies and banks to INCREASE their charges but under a different designation, i.e. ‘service charges’. When you consider that in this digital age it only takes a few seconds to put through a payment, you do not need binoculars to see that card charges are a HUGE RIP OFF of consumers.

Of course nobody in the government worries about these excessive and unfair card usage charges. Why? Because long suffering BRITISH TAXPAYERS pick up the bill, not rich Cameron et al.

Guest
Norman says:
21 April 2012

Hi Edward long time since last messages
Once again your making a mistake of naming Ie Cameron. I agree with everything you are saying but lets not forget as you have brought it up Labour had 13 years and did nothing about this item , so please Edward stop using politics all the time. THEY ARE ALL AS BAD AS EACH OTHER.
Your friend
Norman
Ps at a recent auction (weds) I had to pay 1.98% of total price of items this was on top of 15% auction site fees.

Guest
Anne says:
29 April 2012

Where do we report companies that are charging surcharges?
Edwards Hair Solutions is charging £3.90 for credit card surcharges, even if you pay through paypal. is that legal?

Guest
Philip says:
5 January 2013

I was recently charged €22.50 by Lufthansa for purchasing tickets to the value of €667.05, that is 3.37% of the cost of the flight. I bought the ticket from Finland (via Lufthansa’s .com website), so not from the UK, but in any case this is anything but reasonable I would say. What is just as unfair in my opinion is that these charges are not mentioned on the initial price quote on the web page, only when you go to pay. I think such costs should be mentioned up-front otherwise how can the consumer compare prices if they have to go to the payments page before they know the real cost. It seems that such charges levied by Airlines are certainly on the increase and it looks like it will be difficult to get them to be reasonable despite the incoming 2014 EU legislation, unless all such charges are communicated to customers up-front so that they can appear in price comparisons.

Guest

I just had a look at the easyJet website, it has dropped the £9 booking fee and there is a note to that effect, “…what you see is what you pay”. Good stuff.

Guest
Angela B says:
5 January 2013

In reply to Easyjet dropping the £9 fee. I recently tried to book flights and yes they have dropped that fee but now have allocated seating which they charge you for! I do not know of another airline that does this. So they have got round this already. I declined to pay the charge and booked with another airline. I think we have to vote with out feet.

Guest
Robert says:
5 January 2013

Angela B, Do you mean that you cannot complete your booking without buying allocated seating, or that if you wanted allocated seating, you had to pay extra? Some regular carriers (e.g. Malaysia Airlines) levy a charge if you want to book an allocated seat, although you can turn up at the airport and take your chance.
Quite right to vote with your feet – it is the only language rip-off merchants understand.

Guest

In response to Angela B’s comment on the booking fee for an allocated seat, you do not have to select a seat. If you choose not to select where you want to sit their system will allocate one at random. My wife and I fly easyJet quite a lot and for us, paying a few pounds extra to avoid the old easyJet scrum/cattle-market is simple heaven. Other airlines also charge fees for seats – I flew Aberdeen to Southampton with Flybe on my own recently and when booking online eventually managed to find the way of NOT paying a seat fee and letting the system allocate me one. At least on easyJet the default position is that you don’t pay this fee unless you decide that you want to select your seat.

Guest
Dr Cornel Fleming says:
5 January 2013

Just renewed my car tax disc….and was charged £2.50 extra for using a Mastercard. DVLA rip-off,and certainly something that the Consumers Association should take up!!!

Guest

Just use a debit card. DVLA and many other organisations make it clear that there is a surcharge for credit card payments to cover what the credit card companies charge. If DVLA did not pass on this charge, those who pay by credit card would be subsidised by the rest of us.

Guest
Dr Cornel Fleming says:
5 January 2013

to wavechange….sorry,but that is a nonsense! It does not cost £2.50 to process a card,it costs afew pennies!! This is very much the type of surcharge that is there just to make a profit!

Guest

Credit card surcharges cover more than processing card payments, for example billing, subsidising those who take advantage of free credit and pay their bill in full every month, dealing with those who get into debt and providing protection for purchases over £100.

I ask if there is a credit card surcharge and if so, I pay by debit card and expect the transaction cost to be met by my bank.

Guest

Ticketmaster the biggest offender, the charge exorbitant booking fees per ticket. I have paid up to £6.50 per person per booking. Totaly unacceptable!

Guest
Dr Cornel Fleming says:
5 January 2013

For a start,not everybody has a debit card. Moreover,this is the kind of argument Ryanair was using! If carried to it’s logical conclusion it would lead to a rise in bank charges as well. And why anm I am I supposed to cover the cost of those who get into debt???

Guest

Fair enough. Not everyone has a debit card. It is possible to pay vehicle excise duty at some post offices, either in person, or by post for the cost of a stamp.

All credit card providers have to make provision for the cost of dealing with those who get into debt. With customers being given high credit limits and the typically high interest charges charged, quite a number of people do get into debt. If you are a good driver, you will be subsidising those who are not.

Guest
Edward says:
5 January 2013

HAPPY NEW YEAR EVERYBODY!

Really, the greed merchants are already hard at work ripping everyone off? They know how to make easy money.

I am afraid, that what is clearly needed is another Consumer campaign championed by WHICH? to prevent all Companies and the government from imposing surcharge payments.

All in favour say AYE!