We did it! Unfair card surcharges are being banned

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!

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Dr Cornel Fleming says:

Phoned a local eatery whose owner is a friend and who adds 50p to the bill if credit card used. Says it covers what he gets charged and leaves him slightly ahead,and that makes sense! I also asked the owner of a bookshop who pays about 2%. Adding £2.50 to the cost of a normal tax disc is over 10%. And I repeat…rip-off!!

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wavechange says:

I believe that credit card companies charge retailers and service providers a percentage rather than a fixed price for their service, whereas retailers and service providers usually have a fixed charge for customers using a credit card. Thus DVLA is charging the same charge irrespective of whether the VED is £20 or £465.

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Dr Cornel Fleming says:

You mean a fixed overcharge for the vast majority of car owners!!!

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wavechange says:

I hope that most car owners have the sense to pay in a way that avoids a surcharge. I have suggested three options.

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Malcolm R says:

No one forces you to use a credit card to make a purchase. The fee is clear and upfront from DVLA – I use a debit card (probably easier to get from your bank than a credit card). Mind you, in the olden days you had to make a visit to the post office – how much would that cost now in fuel, parking – £2.50 doesn’t go that far. The same applies to my Council Tax.
When I do use a credit card I pay off in full, so apart from getting protection and convenience, I benefit (but not much these days!) from between one and two months free credit. I should thank those who do pay the extortionate interest rates for that.

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Andrew says:

11 February 2013

I am wondering if anything has actually happened about this issue legally. I ask because Odeon would like to charge me 75p per ticket to book 3 tickets at £2.50 each for their family showing this morning – a charge of 30%. The charge is the same for debit or credit cards. Since we are now after the December deadline I ask has anything changed?

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Andrew says:

11 February 2013

Update – the fee of £2.25 for three tickets applies even though the adult ticket is free! So the charge applies to a transaction of £5. If there were 2 adults then the charge would be £3 on a £5 transaction – or 60%! What is the record for largest percentage fee?

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fonetic says:

http://www.bbc.co.uk/news/business-22042309

I understand that the booking fee price cap became law in the last few weeks.

It’s now an offence to charge excessively.

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Edward says:

I am not sure that it is a “price cap.” I think that these surcharges / “booking fees” etc are still unregulated in the UK.

However, Companies want our business and the Online businesses are proceeding at a rate of knots!

However, these same companies who are fighting for our custom are still being very greedy because they are fleecing us; customers, with these administration charges / surcharges / booking fees etc.

When you forensically examine these extra charges, most of our Online business transactions are carried out ELECTRONICALLY. We even get “automated responses” from these companies. We hardly need to speak with a “customer care person.” Yet, these charges are levied against us for giving our business to these companies!

These charges, at whatever level, are therefore wrong and unfair.

I hope CEOs, MDs and the politicians read our comments and take positive action to correct this blatant injustice.

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MaureenMay says:

Why have I still be charged £6.00 per person booking fee with Ticketmaster for a booking at the Newcastle 02 Arena?? Is this legal?? or have I been “done”?? Please give me some up-to-date guidance on these charges.

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Miranda Akhurst says:

I’m not surprised that Edward and Maureen feel ripped off by these extortionate booking and admin fees that many companies charge. So called admin and booking fees are both unfair and annoying, if they’re unavoidable (as they nearly always are) why aren’t they included in the headline price?

The reason why the ban that came in on 6 April this year hasn’t tackled these charges is because it focuses on excessive debit and credit card surcharges. So only the charges that relate to, and change, depending on your payment option. Unfortunately this ban does not cover those annoying booking or admin fees as they don’t relate to payment.

Don’t worry, we’re well aware that these other admin and booking fees seem to be on the increase – and our on the case. Do keep reporting them to us here, or if you find excessive surcharges (payment related only) let us know about them here: http://www.which.co.uk/surcharges and we’ll report them to Trading Standards.

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Dr C Fleming says:

Sorry,Miranda..but you are wrong,these charges very much relate to payment,since all that the rip-off merchants did was to change from calling them “card charges” to “admin” or “processing” or whatever other weasel-word charges. This ought to go to Trading Standards now,just as a continuation of the previous approach….possibly with a comment that this is something between theft and fraud!!

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MaureenMay says:

So how does one get in touch with Trading Standards to pass this on, I tried to send them an e-mail and it came back telling me I could not contact them direct. What is all this about, Who can contact TS if not the general public?? Any advice would be appreciated as to how to get in touch with them.

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Edward says:

I am very surprised by your remarks, in particular “if you find excessive surcharges.” If you care to read previous submissions you will find a plethora of examples.

Moreover, the real issue is not “excessive surcharges,” but the fact that surcharges are levied against us, the Customers, at all.

I have not seen or heard any explanation; legal or otherwise to justify any surcharges that are unfairly made AGAINST Customers.

I return to my previous comment, that Customers are unfairly required to abide by these leeches or else. They are effectively saying pay up if you want their “services / goods.”

Miranda, your other comment that you will report surcharges to “trading standards” is side stepping the real issue. What we want is for you to confront all companies head on; no ducking and diving, on behalf of all Customers and tell them to stop making these surcharges against us. This is the challenge.

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fonetic says:

You need to first contact the Citizens Advice consumer service and they will refer it on to Trading Standards if they deem it necessary.

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Dave D says:

In fact, Miranda, what we want is for you to tackle the BANKS who are ripping off the businesses, who in turn are ripping off the customers. If the BANKS were prohibited from profiteering from the use of cards (which they have forced upon everyone) then the retailers would neither need to charge nor have a leg to stand on if they tried. It would then be very much easier to get the charges not just reduced but abolished.
The banks are the root cause of this issue and always have been ever since Barclay’s first introduced “Connect” in the 1980’s and brought with it a “charging opportunity” as one of their staff once described it to me when I was still working in retail.

I do not understand Which?’s refusal to tackle the real cause of the problem.

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Cinema goer says:

5 August 2013

In practice, my local cinema’s OM has told me they’ve raised prices to cover the cost lost by the law. This means that paying members have to pay more – it was part of the deal of Picturehouses membership to not have to pay these! The law needs to protect the consumer in practice, not have the charges moved. Many of query inflation and price rises and most certainly why costs are passed to the public. The lobbying is not yet finished!

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Robert says:

6 August 2013

Cinema goer, you may feel aggrieved, but previously you were being subsidised by those paying with cards. Remember the real cost to the cinema of a CC transaction is only about 2% (say 15p on a £7.50 ticket). I regard the result as a success because the true cost is now displayed up front and the rest of us are not subsidising you!
Charging 50p or whatever to use a card (which of course is probably how most people pay) is just a way to reduce the headline price but make the profit up elsewhere. All booking or admin fees should be banned – that’s part of the cost of running the business.
The other inconsistency is that if you pay with cash, the cinema has costs associated with security and banking, so it probably costs as much per transaction as a card!

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Dave D says:

Sorry Robert, I have to disagree with you – your “real” cost takes no account of the cost of renting the terminals form the banks, the cost of the telephone call made every time a card is inserted, the cost of the electricity to run the terminals and the fines which the banks impose if the retailer does not process enough transactions to generate the stipulated revenue (for the bak) in processing fees.

This is the big issue with these charges: no one really considers the REAL cost of processing the cards, only the actual PROCESSING FEE per transaction. There are a great many on-costs.

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Robert says:

OK Dave, but a lot of those costs are really just part of the cost of running a business. As I said you are not charged for paying in cash, yet the business has had to install a safe, go to the bank daily/weekly or hire a security company to come and collect the takings, pay insurance based on the maximum amount they could hold over a holiday weekend, employ security staff, etc.

Running a business costs money, and when you buy something, you should not have to pay for the goods or service, then pay a booking fee, then an admin fee, then a card fee, then a fee to actually print a boarding pass if it is an airline, then a fee to use the loo… I’m surprised our favourite Irish airline hasn’t introduced a charge to use the steps to board the aircraft! After all steps have to be bought and maintained and someone employed to push it up to the aircraft.

Whether it is a cinema or airline, the price should be the whole inclusive price. If they choose to make themselves easier to do business with by accepting cards – especially if they are working over the internet – then that is a commercial decision they made. If they don’t think the cost of the cards is worth the extra business, then they should not accept cards!

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Dave D says:

Robert said “Whether it is a cinema or airline, the price should be the whole inclusive price.” – absolutely agree – the price displayed should be the price to pay.

My suspicion is, though, that if the on-costs of taking cards (which are, as Robert also said, part of running a business) were added to the prices before ticketing up, there would be outcry from those paying cash, who would be subsidising the card users even more than they are now.

Whilst I absolutely agree with Robert that the businesses have overheads, and card fees plus running costs of the machinery are part of those overheads, it is morally and commercially reprehensible that the banks profiteer from this in the way that they do.

Some of us are old enough to remember the 1990’s when Barclay’s connect was first introduced, and with it the first ever “PDQ” terminals: if the banks had not refused to guarantee Debit cards unless they were processed electronically (which is what happened when Connect first came out) retailers could have gone on using the “zip-zap” manual cards imprinters and vouchers. These were supplied FREE by the banks and the vouchers to go in them were also FREE. They did not use electricity or telephone connections and the cost of handling cards then was indeed just the processing charge. It is the banks who have driven this whole affair from day one and who are making the money out of it. It doesn’t matter which way we hide, disguise or wrap up the costs into the shelf edge price, the business overheads are still phenomenal now compared to what they were pre Barclay’s Connect because the banks have forced retailers into using this equipment out of which the banks make the money. It is therefore the BANKS who still need to be regulated and controlled in this as in all else that they do.

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Robert says:

Dave, Having read your other posts, I do completely agree with you that the root of the problem is the way the banks are profiteering from card use. Probably it is becoming more of a problem now that they are being forced to stop selling PPI, ID theft protection etc. How else will they pay for the bonuses and generous pension schemes they have?

In 2009 a banker I met on holiday was bitterly complaining to me that he now had to start paying 3% towards his previously free pension since the credit crunch. I told him that several hundred people had lost their jobs in my company, and all the rest of us had to take a 10% pay cut. He then told me that because of the reduced volume of transactions/foreign exchanges/loans by industry (the sector he worked in) the bank had put up their fees in order to protect profits. He implied that my company should have just increased our prices! These guys live in a different world from the rest of us!

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Dave D says:

Absolutely agree with all of your last posting Robert!

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Edward says:

6 August 2013

Quite clearly, yet again, card charges etc is the real bread and butter issue.

Why are companies etc imposing and increasing their “fees” for using your Card?

GREED, is the first word that comes to mind and Banks and other organisations are getting away with it! everyone is feasting on the gravy train.

So who can do something about this unfairness? Banks and companies will never self-regulate themselves in favour of consumers; the cash cow is there for them to milk at will!

I call on the government to wake up to this injustice and prove that they are on the side of the people. We need action NOW.

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Charlotte Slayford says:

6 August 2013

Thanks for your support Edward. It is now illegal for companies to charge excessive surcharges when paying by card – that’s more than 50p using a debit card or more than 2% if using a credit card. We’re in the process of catching out companies still charging excessively and we’re encouraging our supporters to report the offenders. If you spot an excessive charge, please report it here: http://www.which.co.uk/campaigns/card-charges/

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Dave D says:

Sadly, but not at all surprisingly given the state of the government and the banking industry, the cap of 50p on a debit card and 2% on credit cards means that the retailers are still actually going to lose out because the banks still charge vastly more to process DEBIT cards than they do to process CREDIT cards – i.e. the government has got it back to front (again).

This is a complicated issue (politically) because the government has backed the banks in trying to abolish cheques (which the banks charge far less to process, undoubtedly why they want to force everyone to use DEBIT cards, so they can make more money) and the banks have all but succeeded because in abolishing the Cheque Guarantee Scheme most retailers now won’t risk taking cheques. Therefore the government would be in an awful egg-on-face position if they limited the charge on CREDIT cards at a lower (realistic) rate than DEBIT cards as the true way in which the banks are profiteering from DEBIT cards would become better known.

The upshot is that the larger retailers will simply add a little extra onto the mark up on all goods, so that everyone, paying by all methods including cash, pays to subsidise the processing of DEBIT cards, and the smaller retailers will simply be squeezed further and more of them go to the wall.

Also the caps on the charges don’t take account of the punitive charges which the banks levy on retailers for the purchase or rental of the card terminals, the cost of the telephone call which every terminal makes every time any card is inserted, even if the transaction is aborted or declined and the cost of the electricity to run the terminals (which is infinitesimally small for one terminal but when you consider large stores with maybe 40 or 50 terminals in every branch and possibly hundreds of branches soon adds up). Not to mention the fact that the banks FINE retailers who do not process enough card transactions in a month to produce the agreed “tariff” for the bank – this fine is often in the order of several hundred pounds a month and is levied even if the retailer is just a penny short of the “tariff”.

For anyone interested in finding out more details of these issues, look at the Which? Convo’s about credit and debit card charges, cheques, the cheque guarantee scheme and Chip & PIN – there is endless detail from many people’s perspectives, including small traders who have been forced out of business by the processing charges.

I’m not saying that we should allow the free for all of sky-high charges to the customer, far from it, and from the customer’s point of view, which? and the government have made some positive steps here, at least at face value, but the upshot will be that every one of us pays a little more for every item we buy and every service we use and quite a few traders will suffer and fail …. some of them will be owned by individuals who are “customers” elsewhere.

As in so many issues, the REAL issue lies with the banks and no one, Which?, Government, or anyone else, seems willing to tackle them, even now.

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Richard Owen says:

So the government have banned excessive creditcard surcharges – only allowed to charge what it costs them… so https://www.gov.uk/vehicle-tax can charge £2.50 for a creditcard payment, and if my tax disc was £30, that’s 8.33% surcharge – surely it doesn’t get charged that much for a £30 payment?

So government, you brought the law in, why not abide by your own rules?

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Eileen says:

I had a merchant account in Canada and in both the USA and Canada surcharges by merchants was absolutely banned, the merchant charges to me were a percentage of the transactions, the lower the transaction average the higher the percentage cost, however it never exceeded 5% of the transaction amount. It helped also to find a bank or credit union that gave a greater break to small businesses, does anyone know if, or how, the rest of the EU charges?

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Edward says: