Offering their services online isn't a "favor" that airlines and other travel companies are doing to consumers, but in fact the opposite: online sales bring down the overall costs in most cases for these companies, and finally rules are on parity in UK to reflect that.
UK airlines, travel companies and retailers will [from this week] be banned from charging excessive fees when people make credit or debit card payments online. (Full guidelines document embedded below.)
Customers are currently being charged as much as £12 to use their cards when they pay, though the transactions can cost as little as 20p to process.
Jo Swinson, consumer minister, said companies had been getting away with using hidden charges to “rip people off” for far too long.
Surcharges have risen dramatically in recent years, particularly among low-cost airlines. The extra fees have been levied on everything from cinema tickets to utility bills and holidays.
In some cases, the surcharges are higher than the value of the item being purchased.
Airlines, which currently impose some of the largest fees on bookings, make around £300 million a year from them, while rail companies make around £50 million a year from charging customers extra.
Banks charge companies a “merchant fee” of around 2.3 per cent of purchases £50 and underon credit cards and around 1.1 per cent on debit cards.
When the amount rises to £500 or above, the fee lowers to around 1.9 per cent and 0.1 per cent for debit cards.
Companies will no longer be able to charge much more than the bank’s merchant fees.
Research conducted by the Office for Fair Trade found that 87 per cent of consumers objected to extra charges for credit cards and 91 per cent objected to extra charges for debit cards.
The ban was originally due to be introduced next year, but the Government brought it forward in line with the rest of Europe.
Richard Lloyd, executive director of Which?, said last night :”Over 50,000 people supported our campaign to end rip off surcharges so we’re pleased the Government is implementing this ban.
“For it to be effective there must be a tough enforcement regime and companies must play fair and not pass costs on to customers in other ways. We will be monitoring the ban closely and want people to tell us about surcharges they think are excessive.“
Jo Swinson, consumer minister, said: “The practice of excessive payment surcharges has been ripping off consumers for far too long. They are fed up of thinking they will be paying a certain price for goods only to find out towards the end of the process that the final price is much higher.
“I am delighted that the ban will stop retailers from cashing in by charging add-on fees that simply do not reflect the real cost of processing the payment.
“Consumers will be less likely to get nasty surprises as they will have a clearer and more transparent breakdown of what they are paying for.”
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