UK To Put An End To Excessive Credit Card Surcharges

 

The UK government plans to ban the prevalence of “excessive” credit and debit card payment surcharges by the end of 2012, citing transparency concerns.

In June this year, the UK’s antitrust watchdog, the Office of Fair Trading, conducted a three-month investigation, which found evidence of “drip pricing.” According to the OFT, UK consumers were charged 300 million pounds in surcharges in the airline industry alone.

 

The UK government plans to ban the prevalence of “excessive” credit and debit card payment surcharges by the end of 2012, citing transparency concerns.

In June this year, the UK’s antitrust watchdog, the Office of Fair Trading, conducted a three-month investigation, which found evidence of “drip pricing.” According to the OFT, UK consumers were charged 300 million pounds in surcharges in the airline industry alone.

The Treasury has said in a statement that consumers “have a right to understand the charges they may incur upfront and not be hit through a hidden last-minute payment surcharge.”

Related: Justice Dept to Scrutinise Legality of Debit Card Fees

Which?, a consumer-rights group, said in a statement that the move will be a “huge victory” for shoppers and called on companies to “be up front” about charges immediately and not wait for legislation. Which? filed a so-called supercomplaint with the OFT in March about the practice, singling out taxi services and low-cost airlines as surchargers. 

The BBC reports that the government is in effect bringing forward the implementation of new European rules, scheduled for 2014, that only allow charging consumers the actual cost of processing card payments.

[quote] We are leading the way in Europe by stopping this practice, said Treasurer Mark Hoban. [/quote]

“We want consumers to be able to shop around. They have a right to understand the charges they may incur up-front and not be hit through a hidden last-minute payment surcharge,” he added.

Related: Credit Card Bill: $3725.65. No Unfair Fees: Priceless

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