At the moment, many companies invoke a surcharge on customers who pay by card, particularly low-cost airlines, which were in the vanguard of using the practice. But many other sectors have now jumped on the bandwagon.
People now pay a surcharge on cinema tickets, cars, utility bills, package holidays and even on their tax bill if they use a credit card, which is costing consumers hundreds of millions of pounds a year.
After intervention by Which?, who complained about the fees to the Office of Fair Trading (OFT), ministers have got involved and say that people are sick of being “ripped off” by the hidden charges, hence the pending legislation.
Financial secretary to the Treasury, Mark Hoban, said: “We’re leading the way in Europe by stopping this practice. The Government remains committed to helping consumers get a good deal in these difficult times. Consumers are sick of the rip-off culture and we are determined to do what we can to end it.”
Richard Lloyd, the executive director of Which?, said last night: “The Government’s decision to ban rip-off debit and credit card surcharges is a huge victory for consumers.
“This announcement goes further than the Office of Fair Trading’s proposals, finally putting an end to these unfair charges. More than 50,000 people supported our campaign to see these fees stamped out.
“Given that airline passengers alone pay more than £265,000 a day in card surcharges, businesses shouldn’t drag their feet over this. While the law will come into force at the end of 2012, we want companies to be upfront and fair over card charges today.”
However, it is expected that the ban on fees will be vigorously opposed and it will be an interesting to watch developments between now and next Christmas.
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