Which? challenges unfair card charges

Published by on 11 February 2011.
Last updated on 11 February 2011

Credit card and notes

Consumer group Which? is launching a super complaint against retailers charging unfair surcharges.

Surcharges - or fees - are charged when consumers use a credit or debit card to pay for goods. However, Which? claims the charges are well above what it actually costs the retailer to process the payment.

It is issuing a super complaint to the Office of Fair Trading (OFT), which now has 90 days to assess it.

Which? says it costs the retailer no more than 20p for a debit card transaction or a percentage of a credit card transaction, no more than 2%. But it says surcharges are often a fixed amount so you could end up paying more than the true cost.

Low-cost airlines are among the worst offenders, with some charging a fee per passenger, per leg of the journey, in spite of the fact that they only have to process one transaction.

No justification

Which? chief executive, Peter Vicary-Smith says there's simply no justification for excessive card charges.

"Paying by card should cost the consumer the same amount that it costs the retailer," he says. "Companies shouldn't be using card processing costs as an excuse for boosting their profits.

"Low-cost airlines are some of the worst offenders when it comes to excessive card surcharges but this murky practice is becoming ever more widespread, from cinemas to hotels and even some local authorities."

Which? wants the retailers to be made to introduce upfront costs whereby they tell consumers if they charge for purchasing on credit or debit cards, and if so what the cost is. It says the cost of the charge to the consumer should be the same as the cost to the retailer and, as the cost of processing a debit card is small, retailers should absorb this fee.

The UK Cards Association is backing the super complaint.

"We called for government action to curb excessive surcharging for card payments ahead of the last election," says Melanie Johnson, Chair of The UK Cards Association. "It is high time customers were given a voice where the true cost of what they are buying is made clear to them. 

"We are happy to support Which? when they launch their super-complaint as it is not good enough for some businesses to generate profit by imposing inflated surcharges when their actual card processing costs are substantially lower."

Are Which? right to challenge surcharges? Leave you comments below.

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