Credit Card Surchanges to Go

Speaking on Radio 4′s Today Programme, Financial Secretary to the Treasury
Mark Hoban said: “It’s important that consumers know up front what charges they
pay.

“What we have announced today will give consumers the transparency they
need.

“I think consumers do feel ripped off and we want them to be able to shop
around.”

Richard Lloyd, executive director of Which?, welcomed the move.

“Given that airline passengers alone pay more than £265,000 a day in card
surcharges, businesses should not drag their feet over this,” he said.

“While the law will come into force at the end of 2012, we want companies to
be upfront and fair over card charges today.”

He hoped that the Irish government would work at the same pace as the UK
government in implementing the changes, to cover traders and travel companies
based in the Irish Republic.

The process of accepting credit or debit cards as payment is quite complex,
although retailers point out that they absorb this cost in their sale price.

The OFT calculated that travellers spent £300m on card surcharges in the
airline industry alone in 2010. Ryanair responded to the government’s
announcement by saying that it charged an administration fee – which also
covered the cost of running the website – rather than a surcharge.

The OFT has been investigating some unnamed airlines over the “transparency
and presentation” of their surcharges.

The government will launch a consultation at the start of 2012.