'Excessive' card surcharges continue to draw fire
By UK CreditCards.com
Businesses that impose surcharges on customers who pay with credit or debit cards are in the spotlight. The consumer organisation Which? lodged a ‘super complaint' against the practice in February, arguing that the spiralling charges on debit and credit card transactions are "unjustifiable." Now, some experts say that the high surcharges could fall over the next few years, particularly since the Office of Fair Trading launched an investigation into the practice.
Card surcharges are increasingly common
According to research from Which?, credit and debit card surcharges are increasingly normal practice in a wide range of businesses, from estate agents to travel companies. Budget airlines, in particular, have come under scrutiny for the surcharges they levy on customers who pay with a card.
The cost to businesses for processing credit card transactions is no more than around 2% of the value of the transaction. However, many companies are charging far higher fees. For example, the Guardian highlights a £25 charge paid to a London letting agent for the deposit to rent a flat, charges of £3.50 to £4 for booking train tickets, a 3% charge by a local council for paying Council Tax and a 2.5% fee from an insurance company for buying UK credit cards.
Charges make it hard for consumers
to compare real costs
These surcharges make it hard for consumers to compare the true prices of goods and services, says Which?.
"Consumers are really fed up with paying excessive card charges," said Which? chief executive, Peter Vicary-Smith. "So far, more than 40,000 people have pledged their support for our campaign to bring these to an end ... Low-cost airlines are some of the worst offenders, but excessive card surcharges are becoming ever more widespread, with everyone from cinemas and cabs to hotels and even some local authorities getting in on the act."
Published: 11 May 2011
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