We celebrated when the government pledged to ban ‘rip-off’ card charges in response to our campaign. But some companies have increased or introduced surcharges in a bid to rake in cash while they still can.
The ban doesn’t come in until the end of the year, but Which? wants companies to scrap these unfair and excessive charges now.
To be in business, you need to take customers’ money one way or another, but processing cards should be considered a regular cost of running the company. If firms wish to charge those who pay by credit card extra, the fees should reflect the true cost to the business, rather than being used to squeeze extra profits out of consumers while keeping headline prices low.
Airline surcharges on test
Airlines alone charge customers £300m a year in card surcharges, according to the Office of Fair Trading. This is far too high.
Processing a debit card payment costs around 8p-20p, while credit card payments typically cost around 1.5% to 2% of the transaction value. But a family of four taking a return flight with Aer Lingus or Ryanair, for example, could pay £48 in debit card surcharges – that’s at least 240 times the typical processing cost of a debit card transaction.
The same family spending £2,000 on flights with Jet2 would pay a hefty £147 in surcharges if they paid by credit card.
The surcharge problem has grown worse over the years. Between 2004 and now, Flybe has increased its surcharges by 1,025%, while Ryanair has increased its surcharges by 1,400%. And while British Airways previously didn’t charge for credit card payments, it now charges £4.50 per passenger.
Some companies have even put up their charges since we submitted our super complaint in March 2011. BMIbaby, Flybe, Jet2 and Ryanair have all increased their surcharges, while Swiss and Lufthansa have introduced credit card surcharges of £4.50 per passenger.
No escaping surcharges
There is some good news: several companies have either reduced or removed their surcharges. Monarch, for example, has scrapped debit card charges – though they do charge a hefty £10 for credit cards. Easyjet has replaced its debit card fee with a flat fee of £9 per transaction, regardless of payment method. This is included in the total charges shown and is more transparent.
Over 50,000 people backed our campaign to end unfair surcharges, so while we’re pleased the government is taking acion, we will continue to work on this issue to ensure that the Consumer Rights Directive tackles ‘rip-off’ fees. Nonetheless, we want all companies to reduce or scrap their unfair surcharges now, rather than wait until the new rules come in at the end of 2012.
Which companies have you spotted that still charge excessive card surcharges? Name and shame them below.
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