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Success! OFT agrees ‘rip off’ surcharges are unfair

Stop 'rip off' charges logo

As People Power week’s under way, what perfect timing to reveal that your help has resulted in a consumer victory! We have exciting news about our surcharges campaign – and we couldn’t have done it without you.

The Office of Fair Trading (OFT) announced today that it too agrees with our surcharges super complaint.

It’s provided its recommendations for a short and long-term solution to the issue of excessive card surcharges. The quick win is price transparency.

Publish transparent prices

The OFT will be cracking down on companies that make it difficult to work out the true cost of purchasing something when paying by debit or credit card.

We’ve found that some websites will take you two or three pages in before explaining that paying by credit card will seriously bump up the price. In fact, some have left it until the final stages of checkout before adding in this ever so important detail.

Many of you have told us that it’s not so much the price, but the sneaky way these surcharges are added on when you’ve little choice to turn back that really irritates them.

Don’t drag your feet

Well the OFT’s response, and plans for enforcement action, should put a stop to this. But our message to companies – particularly those ‘no frills’ airlines – is why wait for the OFT to take action? If you know you’ll get rapped in the upcoming months, do it now and declare the costs upfront.

But what about addressing the excessiveness of the surcharge? Who’s going to fix that? Essentially, we need legislation to bring these costs back into line.

You’ve been helping us lobby Ed Davey, the UK consumer affairs minister, to support the Consumer Rights Directive (CRD), which includes a proposed ban of excessive surcharging.

2,400 emails to Ed Davey

We accept that there will likely be a charge for paying by credit card, but this should be a fair charge – up to 2% of the amount you’re paying. And as far as debit cards, since it only costs the retailer around 20p, there shouldn’t really be a charge at all.

2,400 of you felt the same and took to your keyboard to tailor our template email. Ed Davey took note as he wrote to our chief executive to share his concerns.

I feel strongly that your emails helped convince the minister, and in turn his European counterparts, to keep the proposed ban in the legislation.

The changes to the CRD will take a couple of years to come into affect, but this is the part of the law that could force companies to make surcharges cost reflective.

Another proposal from the OFT recommends an amendment to the Payment Service Regulations to force companies, by law, to be honest about their pricing.

So will companies take note and get into shape before the law forces them to? Anyone care to bet on the companies that may lag behind? For now, lets rejoice in the news that together we’ve successfully made the case that excessive surcharges are too big to leave untouched.

Keith B says:
1 July 2011

Why is there ANY charge for a debit card transaction? Straight from my account into theirs. Where is the cost?
I also share the annoyance with so-called handling fee charges for supplying theatre tickets. Should they not be included in the price of the ticket?

kelvin Lewis says:
2 July 2011

About time this was stopped and any other steathy practices

Yiayia says:
2 July 2011

Well done ‘Which?’ – keep up the good work. I for one will back you all the way.
By the way – I seem to recall that Government departments do this as well. – TV licences and car tax for example.

michael dowling says:
2 July 2011

I see that the buffoon in charge of Ryanair is intent upon dragging his heels on this rip-off but if he does eventually concede that the charges for using a credit card are outrageous no doubt he will come up with another ingenious way of extracting more profit from his customers.Why can’t he just charge higher fares and be honest about it instead of treating passengers like morons…..surely this is a business approach which is doomed to fail.”You can fool all of the people some of the time…”

FredM says:
3 July 2011

I dont understand why the OFT took so long to do this without being pushed by Which? Surely this what they were created for. All these industry regulators ( power, telecoms advertising, financial etc) nowadays seem to be impotent or unwilling to stand up for the consumer.

Braveboy says:
3 July 2011

As my wife and I are both living on a pension we use a news agents shop on a regular basis to charge a pre pay electric key meter, every time we do this we use a debit card but no matter how much money is added to the key we are charged an extra 50 pence for the shop to give us service no matter how much money is being added to the key.
However the rule is if you purchase somthing else thats not connected there is no 50pence surgharge, so does the extra 50 pence need to charged or is it just a way to make people spend more in the shop, or does the shopkeeper really get charged for debit card transactions.
Well done which, keep on with the good work !

Joe French says:
3 July 2011

When Maggie was in Power, there was NOT any charges on Debit Cards, when can we have this back, In the current climate Retailers should be pleased that we are buying there goods, and therefore should NOT charge Credit Cards Either.
Joe French.

Sally says:
4 July 2011

Why do people think they should not have to pay anything for the convenience of using a credit/debit card rather than cash?

Large retailers are more able to absorb the charges involved with processing card payments and I agree that the rates they charge us certainly do not reflect what they are being charged. Small retailers are not able to absorb the charges, even at cost, so easily. If I have to pay rent for a credit card machine, pay a charge of just under 3% for each transaction I put through it and then wait 10 days for the money to get into my bank account, just so the customer doesn’t have to queue up at a cash machine for cash, I should be able to pass the associated costs on to the customer – at cost.

I understand the pensioner’s dilemma that she has to pay a 50p charge when she tops up her electric key at the local shop, but, the electric company don’t own the machine you put your card into, another company is processing the payment on its behalf. It is providing a service that rightly you should pay for, particularly when there is the option to pay cash which incurs zero charges. Each transaction incurs a fee, machines cost money, the machine company has 1,001 running costs etc. etc….

What I find interesting from the comments above is that you actually don’t mind paying a transaction fee, you just don’t want to know that you’re doing it!

Simon Evans says:
4 July 2011

Of course the merchant has costs associated with any form of payment. After all, banks charge for accepting cash, which has to be physically transported to the branch, incurring a cost for the merchant. But that is not the point here. We all recognise that there are many costs of doing business. Picking out one of them and charging a fee out of all proportion to the actual cost to the merchant is what irritates people. This is especially so in the case of debit card fees, which really do not cost anyone much to process unless they are extraordinarily inefficient.

having run small business i accept that small retailers are less easily able to absorb credit card fees – if you net margin is 8% and you have to pay over 3% to a credit card company you see a huge reduction in your profit. But that is the name of the game. If you are small you don’t compete on price, because the big guys will eat you alive.


I have always understood the credit card fees that retailers have to pay, and I sympathise with them for having to bear this cost. I believe they are not justified and are just another way for banks to make profit for doing little. Electronic funds transfer is inexpensive and inevitable in the age of the internet. A new standard for the whole charging structure for the movement of money is required.

However, ‘transaction’ charges have become insidious and increasing costly. They bear no relation to the actual cost to the seller and are applied in a random and, in my view, crafty fashion. I disapprove of transaction charges AND the way they are not included in the cost of items, but tagged on at the end of the payment process. Tickets for theatres, for example, used to be provided by the box office itself and the only extra charge would be for postage, where requested. Now tickets are mostly available only through ticket agencies and the opportunity for sneaking in extra charges has been taken full advantage of.

With this precedent set and well established many other businesses have leaped enthusiastically on to the bandwagon with no justification whatsoever. A point is made that – ‘you actually don’t mind paying a transaction fee, you just don’t want to know that you’re doing it!’ I am content to pay a fair price for a product or service but I demand to know the cost ‘up front’. This should enable me to compare prices with other vendors. If such a charge is fair is should be included in the advertised cost. When I go to the supermarket or clothes shop I expect to see the price for the item on the label. If that price has to include delivery, handling, store lighting, and so on, that is understandable. It does not say – ‘Item price £2, but extras will be added at the till’.


Get this! Ryanair has just been fined 500,000euros by Antitrust in Italy for false information, lack of clarity on charges including credit cards, lack of Italian translations of terms and conditions…for Italian speakers, here’s a summary (from La Reppublica)
Cinque le pratiche contestate a Ryanair
– ingannevolezza dei messaggi pubblicitari diffusi a mezzo stampa o sul web che prospettano offerte risultate “introvabili” dagli utenti (sanzione di 110.000 euro);
– mancata indicazione nella tariffa offerta dei costi aggiuntivi, quali quello per il web check in, il supplemento carta di credito e l’IVA sui voli nazionali, che vengono automaticamente aggiunti nel corso del processo di prenotazione on line e fanno significativamente lievitare il prezzo del biglietto (sanzione di 220.000 euro)
– difficoltà o, addirittura impossibilità, da parte degli utenti di ottenere assistenza post-vendita per il rimborso dei biglietti (o di parte di essi) in caso di mancata fruizione del volo, sia per motivi imputabili alla compagnia che per scelta del passeggero: ciò in particolare, per la necessità di rivolgersi ad un numero a pagamento o per l’applicazione di una fee elevata (sanzione di 90.000 euro)
– pubblicazione delle condizioni generali di trasporto e delle informazioni rivolte ai consumatori italiani in lingua inglese (sanzione di 27.500 euro)
– ingiustificati esborsi aggiuntivi nel caso di richiesta di variazioni di date, orari, nome dei passeggeri e tratte di volo o di riemissione della carta di imbarco in aeroporto (sanzione di 55.000 euro).

[Hi Edward, thanks for the article – here’s a link to the article in Google Translate for English speakers http://bit.ly/mkunsV%5D


Well spotted! I had to do a bit of digging to try and find an English translation, but from what I can gather looks like Italian authorities were unhappy with the card charges imposed by Ryanair when passengers booked flights. Here’s a link to a (shorter, sorry!) article in English, that explains Ryanair are looking to appeal the 500,000 euro fine.


Michael Thomas says:
4 July 2011

I am delighted that Credi/Debit card charges are to be made transparent. However, that is only a partial victory. There should be no charge for using a debit card and charges for using a credit card should be substantilly reduced for example when booking a holiday or a flight. These charges at present vary from about £5.00 per transaction to £50 per transaction which is rather exorbitant.

Chris says:
4 July 2011

I don’t actually see what has been achieved here apart from the rip off airlines having to show their excessive unwarranted charges up front ! Take a look at easy jet’s site now, it says nothing about extra charges on it’s front page and again it is not until you get down to seeing the full price of the flight that you discover that they now charge £12.95 for payment with a credit card. I am not sure but pretty confident that they have just increased their charge to £12.95, I certainly do not recall paying quite so much before.

Frank says:
4 July 2011

Just tried to book a Ryanair flight and will be charged the same to iuse a Debit card as a Credit card £6 per flight £12 in total for a single persons return flight

How and when will this ruling get implemented ??

Frank says:
4 July 2011

And while I am on the subject have you looked at the charge £5 for checking in online. As there is no oher options that is cost free or cheaper — why is this just not part of the ticket price

The airline industry is a minefield for those who expect basic pricing tranparency !!


Hi Michael Thomas, Chris and Frank – thanks for your comments. Just to clarify, there are essentially two stages to sorting this problem out. The first stage, getting the OFT to uphold the super complaint, means that very soon (within the next few months we expect) the OFT will begin taking action against companies that don’t make their card surcharges clear up front. So far, so good, but there’s more!

The issue of the fees themselves being excessive is something that we (with the help of lots of consumers) have been lobbying Ed Davey about. He’s been fully supportive of making the airlines charge fees that are proportional to the actual costs of a card transaction. He’s supported changes to the Consumer Rights Directive that will change the law across Europe so businesses are only allowed to charge proportionate surcharges. Yes, these laws will take a while to come into effect, but when you’re looking at regulatory change it can never be instant. What it does mean is that eventually you’ll see the end of a surprise charge of £5-10 to use a debit or credit card when booking a £40 flight!


But what’s to stop them dropping the “credit/debit card charge” and replacing it with an “admin charge” or “booking fee” for a similar amount?
I believe some companies are doing that already.

We really need _all_ charges to be on the front page, instead of popping up during the booking process.
Similarly, there mustn’t be extra surprises _after_ booking/paying, e.g. at check-in, unless we take additional optional services (like extra luggage) at that point, and even those charges must be clearly advertised up front.

In a competitive capitalist economy, companies should be free to charge whatever they like for their products/services, but we need to be able to compare like-for-like up front, and pick the one we want, instead of picking one that _looks_ cheapest but ends up being the most expensive.
Charges for credit and debit cards are only one part of this, and we need to block all the holes rather than just one.

James Wyatt says:
5 July 2011

A recent flight for 5 of us on Easyjet resulted in a credit card charge of over £50 which I thought was expensive for less than £500 of flights. The problem is that the airlines rely on all these alternative revenue streams, so take one away and the lost income will simply find its way back into their pockets via another route. This ‘victory’ is a hollow one – it’ll make things more ‘transparent’ but the consumer will be no better off.

S Reeves says:
6 July 2011

Two years to bring in this legislation is a long time to wait before the card companys have to abide by this ruling, you know some won’t bring it in early!
2% doesn’t sound much until you think about buying large items ie cars, motorbikes and other large items 2% of £12,000 would cost you £240.00 for a 20p transaction, now that is a ripe off that, doesn’t help the retaillers either, as they have to pass the costs on, proportional charging iis ok up to a point then it should be capped, I would suggest a limit of £50 so they are still gaining some profit just not an extortionate amount.


Is this why banks are so keen to do away with cheques having already ceased to guarantee payments as from 30th June 2011? Obviously more profit to be made on card transactions. VAT is included in most purchases in this country so why not cards? Something for George Osbourne and the FSA to legislate on no doubt. Competition is supposed to bring down prices which is why companies are so reluctant to disclose added charges but The Great British Public are not being fooled by this. More transparency required.

Mervyn Bryn-Jones says:
7 July 2011

I came across a variant of surcharges last week when I went to the opera at Holland Park. I bought a ticket (face value of £46.50) in person from the box office at the event run by the Royal Borough of Kensington. I was however charged an administration fee of £3 making a total of £49.50. I offered to pay cash but the Box Office clerk said it would not any difference to the total as it was not possible to buy a ticket for £46.50 even though they were advertised at this price.

Chris Done says:
8 July 2011

Well done Which for this initial victory. It is an insidious practice, clearly not accepted throughout the EU, and not just confined to tickets and airlines.
BT also are applying a Payment Processing Fee charged by a subsidiary and subject to VAT. All payments are subject except direct debit, i.e. cards, cheques and bank transfers. This is not transparent charging as in effect you are being charged for the privilege/right to see the bill and agree before paying.
Such payment laxity would I suggest be considered poor practice in business and government so why not also for domestic purchasers.
I do not consider these surcharge payments to be fair trading, nor to be considered as fair trading under the law, and ask that these practices are reviewed and removed before they become endemic and widespread throughout all sectors of our economy.

R Goodgame says:
12 July 2011

Why should there be a charge for credit cards anyway, when introduced it was a way of attracting business.
Many years ago garages charged a higher price for petrol paid by credit card but a lower price for cash. This practice was made illegal and stopped so why should we pay more for buying goods or services by credit card. I appreciate that businesses have to pay a fee to the credit card companies.

stepper says:
16 July 2011

We are all just cows in a field – and we are rounded up en masse and being milked to death. When there is no more milk for those shareholders that are used to large profits we will be slaughtered and every part of us consumed. This applies to Banks, Energy Companies, Travel etc, we are bombarded on all quarters. Sorry to sound to dismal but we are manipulated like brainless animals. We are told how foolish we have been by borrowing too much money and getting into debt – but didn’t the banks etc enjoy years of huge profits, not everybody defaulted and many struggle on paying. I think its time the big fat lazy cats were weaned off milk – en masse.

John Crofts says:
21 July 2011

Nottingham City Council charges 5% for both Debit and Credit card transactions for the sale of theatre tickets. They accept cash and cheques without charge! It costs far more in labour etc to process transactions in this way than by debit card. I have complained to the chief executive and copied my complaint to my MP.

Berni Bieganowski says:
22 July 2011

Only yesterday (21st July 2011) the airline Jet2 added almost £10 for paying by debit card for flights. So this airline has not yet acted on the OFT decision. The particularly perverse aspect of this is that not only are the airlines charging 50 times what it costs them to process a debit card transaction but also this is only added at the very last stage in the online process with no previous warning that this will happen AND the airline has the money in their bank account for months, sometimes as much as a year, in advance of the flight so the company is able to earn interest on your money for a very long time before the service is finally provided.

Joe French says:
22 July 2011

When are these Rip Off Charges going to Stop. I have just booked a Flight on Easyjet and have been charged £8 for paying with a Debit Card.
Joe French.

Paul Andrews says:
23 July 2011

I wrote to the OFT on 3 December 2009 about this issue. Olushola Egbowon at the OFT replied on 25 January 2010 saying that the OFT took action in 2007 about misleading prices and the practice of adding charges for debit card transactions. But obviously not to any effect! It transpired that EC Regulation 1008/2008 came into force on 1 November 2008 which stated that airlines must display the final price at the start of the booking process. This law has not yet been adhered to by the airline companies. Apparently UK legislation implementing sanctions for non-compliance with article 23 of 1008/2008 has never been put in place. The regulation has legal force but there is no means of enforcement in the UK. So this problem is the fault of both the last UK government and the current government for not getting around to putting the law on the statute books. So get writing to Ed Davey the Consumer Affairs Minister asking him to pull his finger out and finally take some action!

Steve Beattie says:
25 July 2011

I booked a return flight with Flybe on the web, after entering my credit card details and agreeing with the price of £69;98 the final price after the process went ahead came back as £79;98,a total of £10 extra transaction charge. I rang at the start of business the following morning to complain only to be placed on hold for approximately 29 mins whereupon I gave up.
I then wrote to them on line and explained that I was not happy with this action of an extra charge and requested a full refund and to cancel my booking. They wrote back to me stating that under no circumstances was I to receive a refund.
Can anyone tell me what rights I have to continue and possibly win my argument.

Thanks Steve

Patricia Andrews says:
26 July 2011

I have just booked flights with Easyjet today (26 July) and the cost for booking with a credit card was more than £13. When will the unfair charges stop?

D Cooke says:
30 July 2011

As far as the airlines are concerned, they should not be allowed to charge more than the maximum charged by the credit card companies. Let’s be generous then, and be prepared to accept a 2% transaction cost for credit cards.

Terry Draper says:
3 August 2011

Cambridge City Council charged me £12 to purchase 6 tickets @ £15 each using a debit card – in person at their booking office. That’s 11.4% on top of the cash price. I hope that if any action is taken it will cover the public sector too.