/ Money

Our super-size surcharges campaign continues

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What a week! We had a giggle at Ryanair calling us ‘clueless clowns’ and watched airlines defend their ‘admin’ charges. But it’s not just airlines getting under your skin, the culprits include dentists and theatres.

Last Friday you joined us in standing up to unfair surcharges. We had high hopes that you’d feel as strongly about this as we do but we were overwhelmed by your support.

You’ve given us great feedback about who the goodies and baddies are – and highlighted other areas we can look into. So we thought you’d be keen to hear what happens next…

What happens to your pledges?

We’ve received over 17,000 pledges of support. We’ll be using your pledges as evidence in our super complaint to the Office of Fair Trading (OFT) to demonstrate the number of UK consumers affected by this issue. We’re submitting it at the end of March. If you still haven’t pledged your support you can do so here:

It’s not just about airlines

You might have thought the super complaint is just about the airlines as this has been the focus of our pledge.

But it goes further than that. The surcharge super complaint raises issue with any industry charging unfair card fees – anything above 1-2% if paying by credit card and anything above 20p if paying by debit card!

Low cost airlines are often the worst offenders. But you’ve given us plenty more to add to that list. You’ve told us about dentists, cinemas, theatres, and even local councils stinging you with charges when it’s time to pay.

Your concerns about surcharges

Commenter Stephen Hicks raised concerns over how retailers will make up their losses if the OFT find the surcharges are unfair. ‘Ticket prices would rise to compensate, but at least we would not feel ripped off,’ he said.

Richard told us ‘it is easy enough – make all companies quote the actual cost to the customer at point of sale’. We’re definitely behind you on that one.

Dave Darwent told us that we’re just touching the surface of this issue. ‘Which? is missing a fantastic opportunity here to really help smaller traders: the Super Complaint should be about the BANKS charging these fees and forcing the retailers to have to pay for telephone and electricity services too.’

The digital community has rallied together to get our pledge promoted in all the right places, too. A big thank you to Martin Lewis for flagging it in your latest email and Travel Supermarket and Money High Street for embedding it on your sites. We’ve even made the embed code available so you can put it wherever you like (sorry Ryanair, you can’t stick it there).

We’re keeping track of all your examples to explain the breadth of the issue to the OFT. Please keep your ideas and personal experiences coming in. You never know, it might become the focus of our next investigation.

Comments
michael kyle says:
20 February 2011

I exceedeed my limit with direct debit facilities available to pay any debts. Immediately a stop went on my card and a charge kicked in.The transaction that took me in to over the limit condition was allowed. Why could they not have stopped that one.Answer no charge would have occured.This is called cynical charging.

Hi Michael, thanks for your comment – I agree with you that the way these charges are applied is often very unfair. It doesn’t fall within the scope of our super complaint, but we are actually campaigning on this issue too. You can find out a bit more about our ‘unfair overdraft charges’ campaign here: http://www.which.co.uk/campaigns/personal-finance/unfair-overdraft-charges/

G D Oates says:
20 February 2011

I have long resented the additional charges made by travel agencies, airlines, rail companies etc. for making bookings by computer, and have struggled to find a ‘no extra fee’ method of paying, (usually without success). As paying by card gives instant payment to the company in question and means that it never sustains a ‘bad debt’, it could even be argued that such payments should be ‘rewarded’ by a small discount!!!! Even at worst, there should be no charge, especially as the ‘work’ is all done electronically, thus avoiding high costs for staff.
Has the principle been reviewed by the Office of Fair Trading?

I think it is the use of “additional” charges of any kind when there is no alternative that is misleading and needs clamping down on.
Shops can be penalised if they advertise a product for £9.99 and then charge £10.50, so why not other businesses.

I resent what I feel as being caught between a rock and a hard place. I deliberately choose to purchase online, especially flights tickets, with a credit card because of the security of insurance that provides. That then forces me to give extra money, not to the company that is securing me but, to the airlines, who oftn have that money months before I benefit from their product.

You can now even get charged for printing off Your own gig tickets & other ticketc/products :/

Sue Thornton says:
21 February 2011

Extra charges for booking theatre tickets really do annoy me, especially when it’s nothing to do with whether or not a credit card is used and the charge is billed as a ‘booking fee’ If there is no way of avoidng the fee, then it’s part of the price and should be included in what the ticket costs. After all, booking electronically saves box office staff time

Unfortunately, until the vast majority of the population votes with their feet, these charges will continue to appear. And if the companies in question remove them they will find another way to replace their loss.

Wrt bank charges – this is a personal grumble of mine. If people can’t keep their finances in order, why should those of us that do, subsidise the overheads of the company having to deal with those that can’t? We should all know what the charges are and you have two choices: avoid getting into that situation in the first place or, bank elsewhere!

Wrt airlines, ticket agencies, etc. You DO have a choice. Choose NOT to fly with them. In any case, if you add up all the charges, in most instances the total will still be LESS than if you flew with a ‘frills’ carrier such as British Airways.

Wrt ticket agencies if no booking fee was applied the only way agencies will recoup their losses is to charge the promoter – which means official prices will rise as the promoter won’t want to see a reduction in their margins. Again, you have a choice – NOT to go.

VOTE WITH YOUR FEET!

Fat sam, it’s all right saying vote with your feet, but my main complaint is that these surcharges are often hidden away in the small print, or applied only after you’ve spent half an hour specifying the details of your order and entering all your credit card information – you’re often only told about the surcharges when you’re about to press the Buy button. I would agree with you that we should vote with our feet if there was an easy way of comparing prices. But with hidden charges, it is not easy. It is not the total cost I have a problem with; it is the dishonesty of advertising one price and charging you another.

Manticore says:
1 March 2011

By ‘eck Fat Sam, if only the answer was that simple. I discovered that Joe ********* (a brilliant blues/rock guitarist) is coming to Blackpool Opera House, just a few minutes from where I live. Face value of ticket was £40, then £4 card charge, then £3.25 for Royal Mail “Standard” delivery, which basically is a 41p first-class stamp.

So, £7.25 over and above the ticket price. Of course, I hate paying it and I’ve complained to Planet Rock (and anyone else who’ll listen basically) but at the end of the day there is NO choice. I can’t get tickets through any other promoter (so cannot vote with my feet) and I can’t pick them up in person. If I want to see Joe ********* (and believe me, I DO), then I have to do it this way. NOT seeing him is NOT an option.

fat sam says:
1 March 2011

Would you have complained if the artist sold you the ticket with a Face Value of £47.25 with a free booking service and free delivery?

Really, would you have complained?

I used my debit card to pay for currency at the Post Office and was charged an unexplained surcharge of £4.50 by my BANK (Natwest)!
I could understand if it had been a credit card, because it would count as a cash advance, and we all know that getting a cash advance on your credit card is expensive. But essentially, my bank have charged me for accessing my own cash. If I had gone to the cash point and withdrawn the money to pay for the currency, I would not have been charged, but as most debit cards have a daily withdrawal limit, this would not have been an option for me anyway.

Zoe, did the cashier at the Post Office warn you that your bank would probably charge you a fee for this? When I did the same at another breau de change, the cashier warned me that using the debit card would probably cost me. So I went to my bank and withdrew the cash there for free (if you go in person, the cash machine withdrawal limits don’t apply) and then went back to the bureau de change and got my currency without the surcharge. I think the issue you’ve highlighted is another example of a potential hidden charge, if you are not warned about it beforehand.

'pool45 says:
23 February 2011

Same happened at Travelex online – booked currency – they WARNED possible charges by own bank so used Debit not Credit card – still charged…….. no sense from of branch (Santander) so moved most of my money elsewhere

'pool45 says:
23 February 2011

Fees are charged by all Channel Ferry companies for booking online where credit/debit cards are only option. DFDS/Norfolkline at least offer Paypal option FOC.
Online bookings save on call centre staff, they take money now not when you travel and save costs all ways yet charge extra for privilege – there are few alternatives so you cannot vote with your feet.

Mike Williams says:
25 March 2011

If you are a Caravan club member and book through them you do not get charged for using your credit card, and really good prices!

csreader says:
23 February 2011

I’ve had a similar problem with a company supplying heating oil (not one of the big multinationals). We’ve just moved to a village without gas, so we have joined the village consortium for buying heating oil. The supplier charges a flat £8 (whatever the quantity) for paying by credit card, whereas a debit card is free – they are admirably clear about this. For smaller quantities this will be above Which?’s suggested limit of 1-2%; but if I buy 1000 litres that will cost at least £600, and the charge is within the limit. A percentage surcharge would be fairer than a flat fee. (The extra safeguards a credit card provides are almost irrelevant here.)

csreader says:
23 February 2011

If you have an M&S credit card from Marks & Spencer Money, and you use it to buy currency from their own bureaux (in many M&S shops), they did not charge a fee for using the card – at least, not in 2009, the last time I’ve needed foreign cash.

Thanks for all your comments on high card charges for paying for foreign currency – we’re researching this area as part of a travel-themed report to be published in June’s Which?. Please do keep your examples coming and we’ll look into them.

Ron Balchin says:
24 February 2011

I’m fed up with these unfair credit card charges everytime I book a flight or holiday/accommodation. On our recent (two person) holiday I had to pay £13.76 extra for the accommodation and an additional £5ish for the cheesyjet flight on top of the £5.50 ‘booking fee’.

Lorraine Curtis says:
24 February 2011

Have already sent in my details of cruise line Fred Olsen deciding to add this surcharge to the credit card that you register on board for your on board spend, shore tours,shop purchases etc.Prior to last years cruise this was always charge free and they didn’t accept debit cards and there wasn’t a problem. A fellow passenger who is on their customer focus group said they had introduced the charge as they had paid in excess of £200,000 to credit card companies in fees. At 1% this would have been generated by sales of £2,000,000! Given that the price of everything that they offer has a hiked up price anyway ( a cruise DVD filmed by the photographer on board selling for £19.95 when I can buy a hollywood blockbuster for less than £10) They then wondered why takings on board were down.Curious then why large retailers, such as John Lewis, don’t pass this charge on to customers, clearly don’t hike up their prices to absorb the charge but instead set up their own financial system to deal with it

In addition to the various comments already made, I would like to add insurance companies.
They want you to pay by direct debit so that the policy rolls on even when they put your premium up year on year because it is up to us, the customer, to then cancel, negotiate or change policy. I understand the business case but bonuses for paying in full rather than monthly are wiped out by paying with a credit card, one potentially misses bonus points on credit cards and then cancelling a policy can become an issue.
In any industry the fee structure should include all charges, supplements don’t given an even playing field and the consumer is stitched up.
I am surprised the Credit Card industry don’t recognise that they would actually get more transactions and therefore more income if such supplermentary charges were not in place and either change the charges at source or give the retailer/supplier/business a bonus back for encouraging and using their service.

John Evans says:
24 February 2011

Cardiff Airport departure lounge charges £1.65 for 1 bottle of water but £2.00 for 2 bottles. I dont want 2 bottles this is a rip off

Patricia Ong says:
24 February 2011

I am so pleased you have taken this on. I am fed up with paying high credit card fees to airlines such as Ryanair when booking a flight. I can understand a 1 or 2% fee as I understand that is the processing fee that the credit card companies charge. However, more than that is excessive, particularly when dealing with Ryanair and Easyjet whose business is all internet based!

I was forced to pay £12 (flat fee of £3 per person per flight) to flythomascook online using a maestro debit card, on a total purchase of just over £300. Using debit cards for online flight bookings and holidays have always been free in my past experience. Because I had to get the flights booked and waiting to apply for a card which would be fee-free (solo or visa electron I believe) would take too long, I paid it and immediately submitted a complaint to thomas cook, requesting them to justify the fee and fee structure and tell me how much it cost them as merchant to process the transaction (awaiting response 7 days later). I signed up to the which? campaign and urge everyone who reads this to please sign up. These budget airlines and other offenders must be stopped.

Thanks everyone for your comments! VB, your example of insurance was something that happened to me the other day. I didn’t want to pay by the month (because it was more expensive), but if I wanted to put a yearly premium on a 0% credit card, I would have been charged fees.

You make an interesting point about the card companies too. Our campaign is actually being supported by the UK Cards Association – it seems they’re fed up with surcharges as well, as it can seem like it is them imposing high charges when in fact the price of the surcharge that the customer pays is set by the retailer.

Jo – thanks for your story on your complaint as well – it would be great to hear what response you get – would you mind coming back to update us when you know? I’ve had a few emails from Which? readers saying that they had personally complained about surcharges, and if anyone else has a story about it, it would be interesting to know what kind of response you got!

Jim H says:
2 March 2011

HI,
Have followed the Super Complaint and have in the past made my own complaints to the OFT – I have a difficulty in understanding why a fee charged by the retailer doesn’t enter into the “Total Charge for Credit” – the OFT seemed particularly vague when I questioned them regarding this – surely if the trader promotes payment by credit card any fee charged should fall to be included in the total charge for credit – If the OFT agreed this, the credit card companies would stop the fees immediately – it would make their APRs wrong and the agreements unenforceable – Welcome to “Rip Off Britain” courtesy of HM Governments.
(Have you tried to tax your vehicle on line – even taxation departments make the charge)

fat sam says:
3 March 2011

I was always under the impression that all retailers had to offer an option of fee-free payments. Some (Ryanair) go to incredible lengths to make this as difficult as possible. But they do have to offer this so we, as consumers, need to be smarter to play them at their own game (until they come up with something else).

My view is that these fees are there to justify the low overall cost of the product/service. If they didn’t display a visible fee they would simply put their prices up and quite possibly, by more than the current fees. Budget airlines are a classic example. Yes, they can appear to be a pain but we need to see the wider picture. Change your perception. Look at the total cost. Then make your decision.

As for banking, the only time I have EVER been charged by a bank is for occasional overseas withdrawals – but I knew about these in advance so made sure I was aware of how to minimise these (as well as use the tools available online to find the best currency details before I went abroad (poor suckers who still use the Post Office…)

Fat sam, until recently I was also under the impression retails had to offer a fee-free option. But when I wanted to buy tickets to a concert at the O2, and saw that the booking fee for online purchase was £9 per ticket (even though they would send all three tickets together in the same envelope), I thought I could avoid the fee by buying direct. So I went to the O2 box office, prepared to pay by whatever means, cheque, even cash if need be. Yet they insisted on charing me a booking fee there too. I would have been much happier if the ticket price included the booking fee as there was no way of avoiding it.

fat sam says:
3 March 2011

Clint, I think you’re confusing a booking fee for a payment method fee (such as the one for using a credit or debit card). Your booking fee is charged no matter what method you pay as it is for the booking not the payment method. Some retailers charge extra on top of the booking fee if you use a credit card, or even a debit card but must offer a fee-free method (e.g. cash, or cheque, or a Visa Electron card). But you’d still have to pay the booking fee which is for the booking service and not related to the method of payment. The proceeds of the ticket goes to the promoter and the artist. The ticket agent charges a fee for the service it provides to both the artist (and their agent/company) and the buyer. In high street shopping this is often referred to as retailer mark-up but is hidden in the final price of the goods one is purchasing and is not often expressed as a separate charge.

You’re right that a payment method fee should always be avoidable. The problem is that the ‘free’ methods of payment are becoming so complicated (and sometimes expensive) that it effectively makes the credit/debit card surcharge ‘unavoidable’ for most consumers.

Booking fees are slightly different, you’re right. But again, if a booking fee is completely unavoidable, why not add it in to the cost of the ticket? When I walk into a shop and see a lovely pair of shoes for £30, I expect to pay £30, not be charged an unavoidable ‘taking shoes out of the shop’ fee or a fee to the shop for deigning to allow me to buy products from them. So why, if booking fees are necessary, are they not included in the advertised price of the ticket?

To illustrate why it’s unfair, let’s say you have two organisations: A Ticketing and B Ticketing. A Ticketing sells gig tickets for £10, and B Ticketing sells them for £15. So of course you choose AT. But when you get through the online shop, having chosen your ticket dates and begun putting your card details in, you spot they’ve added a £7.50 ‘booking fee.’ BT, who charge £1 booking fee, is being more honest up front but they’ll lose out on business because so many customers will have chosen the cheap tickets then got hit with a last-minute charge.

No matter what this charge is for – keeping the business running, staff costs, cost of processing payments, etc – surely it should be included as part of the ticket cost? Just like the cost of staff wages, processing payments, etc, is included in the price of my lovely shoes.

fat sam says:
5 March 2011

well, I’m happy for people who can’t be bothered to check what the total price is before they commit themselves to pay more. Each to their own. It’s the same with delivery charges. It’s up to the purchaser to check the total payment before they pay. It’s not really that difficult. What would you prefer, a ticket agency charging £50 for a ticket that you don’t know the face value of but includes all the fees and their costs and effectively includes their mark-up – or a an agency that sells you the same ticket that the artist tells you has a face value of £40 but the agency charges you £3.50 booking fee, a total cost of £43.50?

Because the first example is what will happen.