Which? highlights card fee “rip off”
Monday, 29 Sep, 2010
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Household travel names have come under the spotlight today after a Which? report showed they were massively overcharging on credit card fees.
The report fingers Ryanair, Bmibaby, Easyjet, Monarch, Emirates, Thomas Cook Airlines, Thomson and Saga Holidays among others, saying customers are being “ripped off” by inflating card processing fees.
It adds that Irish Ferries and Brittany Ferries are also profiting from a £5 flat fee on bookings made by a credit card.
Banks charge companies around 10p to process a sale on a debit card yet the report reveals that companies routinely ask customers for £5 and in some cases much more.
Credit card processing also costs customers hugely. The practise of profiting from debit and credit card processing is out-lawed in many parts of Europe.
For credit cards, a bank will typically charge 0.8% of the value of the transaction.
Bmibaby charges £4.50 per flight when bought with a credit card and £3 with a debit card while Easyjet wants £3.50 plus 2.5% (minimum £4.50) on a credit card transaction and £3.50 for a debit card booking.
Ryanair asks for £5 per flight booked for both methods of booking and Monarch asks for 3.5 % on a debit card booking and 5% for a credit card booking. Thomas Cook Airlines and Thomson want 2.5% (with caps) on a debit card payment.
The Which? research shows that although companies have blamed the high fees on the banks, it is actually simply a diversionary tactic for them boosting their profits.
Which? chief executive Peter Vicary-Smith said: "People don’t like card surcharges and it’s no surprise when the costs they pay don’t match those incurred by the retailer.
"There can be no justification for high card surcharges. While companies may want to recoup merchant fees, these charges need to be fair and transparent, so consumers know the real price before they begin a transaction."
* Are your card transaction fees fair? If your company is mentioned in this story and you want to put your view across, please let us know at [email protected]
by Dinah Hatch
Dinah
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