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Government drags feet on banning rip-off surcharges

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26/06/2012
The Government has stalled in its promise to ban credit and debit card surcharges, with consumers continuing to face extortionate payment card surcharges, according to consumer charity Which?
Government drags feet on banning rip-off surcharges

Airlines, ferry companies and even the DVLA, a Government body, are said to be cashing in on surcharges placed on plastic users, as MPs drag their feet on banning card surcharges by the end of the year.

Last December, the Government announced it would “become the first European country” to act on banning “excessive” payment surcharges, with a view to banning these charges by the end of 2012.

Since this proposal there has not been much change in legislation, with the Treasury Minister, Mark Hoban MP [pictured], today stating that the Government is still committed to banning excessive surcharges but did not confirm that it was sticking to its promise to bring in the ban by the end of 2012.

Which? executive director Richard Lloyd said:

“The Government must take urgent action if it is to meet its promise to consumers to ban excessive card surcharges by the end of 2012. Over 50,000 people supported the Which? campaign to end rip-off surcharges. At a time when so many people’s budgets are stretched, it’s unacceptable for the Government to be stalling on this issue.

“The OFT should also be cracking down on businesses to stop the rip-off. It’s outrageous that so many are cashing in on surcharges while they still can.”

At the time, the Officer of Fair Trading (OFT) committed to taking enforcement action against companies that persist in hiding the cost of paying by card, but has yet to do so.

Consumers will now continue to pay surcharges as many major airlines charge extra for payment via non-endorsed cards, with the OFT estimating that airline passengers spend £300m a year in card surcharges alone.

All of the 13 airlines that Which? investigated last year as part of their super-complaint to the OFT, still apply card surcharges and budget airline, Monarch has increased its charges in the last six months for some customers.

Monarch now adds a £5 fee or 4% charge for credit card payments, whichever is highest. That means a family of four spending £2,000 on return tickets this summer has to pay an extra £80 in card surcharges.

Which? has investigated other businesses and has found that the DVLA, a Government agency, also continues to charge £2.50 for paying by credit cards.

The government has until 13 December 2013 to “adopt and publish” new laws, including implementing the ban on payment surcharges, in accordance with a raft of new EU consumer rights laws that were introduced last year. The implemented laws would apply from 13 June 2014.

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