Ryanair launches its own prepaid MasterCard
Pre-paid MasterCard holders will have to pay admin fees when booking tickets online with Ryanair.
Cardholders of pre-paid MasterCards have so far managed to avoid the £6 booking fees that debit card users have to pay when buying tickets from the airline but from 1 November the £6 booking fee will apply to pre-paid MasterCard bookings too.
Ryanair is introducing its own branded pre-paid MasterCard, the Ryanair Cash Passport, on 4 October and will waive any fees on this new card until 31 March 2012.
From April, aside from Ryanair bookings, there will be a 50p charge on all UK transactions. Other charges also apply for withdrawing cash from a cashpoint (£2) or bank counter (£4), and a £2.50 inactivity fee applies after six months.
Ryanair's card charging practices came under scrutiny earlier this year after Which? launched a super complaint against card surcharges, which the Office of Fair Trading (OFT) upheld – though no government action has followed.
Ryanair insists that the fees it levies are 'booking' fees rather than card fees and these are avoidable. Stephen McNamara, spokesperson for Ryanair, says: "Ryanair's £6 admin fee will not apply to any bookings made with the Ryanair Cash Passport but the fee will initially be taken and passengers will then be reimbursed with a £6 Ryanair travel voucher."
The airline's tactics have once again come under criticism from the industry with Steve Endacott, chief executive of holiday company On Holiday Group, calling Ryanair "hardnosed".
"You have to assume that Ryanair lawyers have found the required loop holes to get around the consumer protection laws that insist on a zero cost payment option and do not consider the OFT to have any teeth at all," he says.
"It's left to consumers to fight this on their own by saying enough is enough and boycotting Ryanair until it stops thinking they can con customers with low lead prices and then hit them with every imaginable extra cost under the sun."
A complaint made in the UK by a government-approved watchdog or consumer organisation on behalf of consumers which is then fast-tracked by the Office of Fair Trading (OFT). For a super complaint to be valid, it has to be about a “market feature, or combination of features, such as the structure of a market or the conduct of those operating within it, that is or appears to be significantly harming the interests of consumers”. In March 2011, the OFT received a super complaint from consumer watchdog Which? asking the regulator to investigate excessive surcharges imposed by issuers of credit and debit cards.
Issued by a bank as part of a current account and, in a nutshell, serves as electronic cash. Unlike a credit or charge card, where you get an interest-free period before you have to settle the bill, the funds spent on a debit card are withdrawn immediately from your current account. Unless you’ve arranged an overdraft, if you don’t have the cash in the account, you can’t spend it.