Profits from card charges to be banned

Airlines and other companies will no longer be able to make a profit from processing card payments under a government crackdown likely to come into effect next January.

 

 

Charges for credit and debit card payments will have to be clearly displayed at the start of the booking process and the government will limit charges to the actual cost of processing the payments.

 

 


"Traders will no longer be able to make a profit by charging the consumer for credit or debit card use above the amount it costs them to process that payment," said consumer affairs minister Norman Lamb.



 


"These proposals will stop companies from adding on these excessive charges, and allow consumers to see a clearer and more transparent breakdown of what they are paying for."


 

 

The exact date for the implementation of the new rules, first suggested by the Office of Fair Trading in December 2011, will be confirmed following a consultation this month, but the BBC said it was expected to be early January.

 

 

Last year's report by the OFT in response to a super-complaint from Which? found that airline passengers had spent a total of £300m on card surcharges in 2010.



 


In January easyJet introduced a £9, upfront, administration fee to replace its £8 booking fee for most debit card payments.



 


In July, after further investigation by the OFT, 11 other airlines were forced to put their debit card surcharges in their headline ticket prices, instead of adding them at the end of the booking process.

 

They were Aer Lingus, BMI Baby, Eastern Airways, Flybe, German Wings, Jet2, Lufthansa, Ryanair, Thomas Cook, Thomson (TUI) and Wizz Air.

 

 

Monday, September 3, 2012

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