Debit card charges - ripping the consumer off!!
13th September 2011
... Comments

Thanks to Ian Ruddick from Total AIDC for this interesting blog :-

“Consumers are paying an estimated £265,000 a day in debit card surcharges for booking plane tickets, despite recommendations that the government ban such fees.

Consumer organisation Which? submitted a super
complaint – a complaint about market features that may be significantly harming consumers’ interests – to the Office of Fair Trading (OFT) in March, asking the regulator to investigate excessive surcharges for travellers who pay for flights with a credit or debit card.

At the end of June the OFT proposed that charges for paying by debit card should be banned, and pointed out that a simple amendment to existing Payment Services Regulations by the Treasury would achieve this.

But the government still has not taken action and Which? calculates that since the end of June consumers have collectively paid £18m in airline debit card surcharges.

During its investigation Which? found that a family of four booking a return flight with Ryanair would be charged £40 to pay by debit or credit card. The actual cost to the retailer for processing a debit card transaction is 20p, and no more than 2% of the transaction value on credit cards.

Airlines have faced particular criticism for “drip pricing” – adding charges only after the consumer has filled in a number of web pages during their purchase, making it difficult for them to compare the true cost of booking a flight.

But the practice of adding charges for using a debit card is not exclusive to the airline industry: the Trainline website adds a £3.50 charge when paying for train tickets by credit card; and Eurostar charges £4. London cab firm Dial-a-Cab and Radio Taxis adds 12.5% to the cost of their fares for paying with a debit or credit card, and Addison Lee charges £4.40.

Richard Lloyd, Which? executive director, said: “With most airlines yet to drop these card surcharges, and some introducing new fees, it is time for the government to put a stop to this.

Popular Categories