Credit Card Rip-Off’s and The Firms Who
‘Profit From Plastic’
To Be Investigated By the OFT
Swindling credit card and debit card charges imposed by cinemas, airlines and even government bodies are to be investigated after consumer group Which? lodged a ‘super-complaint’.
Banks charge around 10p to process a debit card sale for businesses, yet consumers are regularly expected to pay almost 50 times that amount.
“Putting a holiday on credit cards is not only essential for people who can’t afford credit for travel upfront but it also gives you added protection for your holiday money if the airline goes bust.”
Firms are accused of profiteering because they inflate the processing fee on credit card purchases.
Which? launched the ‘super-complaint’ over the extortionate fees, giving the Office of Fair Trading (OFT) 90 days to investigate and decide whether action is required.
The OFT has the power to determine whether a change in regulations or the law would be appropriate to clamp-down on the rip-off charges made by household names such as Ryanair, easyJet, Odeon cinemas, NCP, Premier Inn, Eurostar and the DVLA.
The debit and credit card charges are banned in many countries across Europe, including France, Germany, Italy, Sweden and Portugal, while they are capped in Spain and Denmark.
But even some council areas in Britain are imposing charges of up to 3% when people pay for services by card.
According to Which?, at least 55 councils are profiting from credit card transactions, with 12 adding at least 2% to the bill.
Bath and North East Somerset Council impose a 3% surcharge on council tax and planning applications if a credit card is used.
The Somerset Council defends its policy by saying the money would only be ‘found through cuts to services or increases in tax’.
In the past, companies have blamed banks for the high fees, but Which? insists businesses are inflating the charges to line their own pockets.
“The average consumer will not be aware of how much a business is charged for credit card or debit card transactions and the businesses that use that against them,” said Mr James, of Bad Credit Loans 4 You.
“It’s high time that bad credit customers were made aware of how much extra they are being forced to pay, especially on large sums like holiday finance and travel money.”
The tactic of adding high debit and credit card surcharges has been condemned by the banks, which insist charges do not reflect the true cost to businesses.
The Visa Europe card group is said to be ‘completely opposed’, whilst Prashant Vaze, of customer body Consumer Focus, said; “Firms have made a quick buck through confusing and unfair card charges.”
Peter Vicary-Smith, chief executive of Which?, said; “Paying by card should cost the consumer the same amount that it costs the retailer.”
“Companies shouldn’t be using card processing costs as an excuse for boosting profits. Low-cost airlines are some of the worst offenders.”
On credit cards, a bank will typically charge a retailer 0.8 per cent of the transaction value to process the payment.
However, when someone buys a return ticket with popular airline Ryanair on a debit card, they are charged £5 each way per passenger.
Monarch Airlines also charges a debit card fee of 3.5% of the total, while this rises to 5% if travel credit tickets are bought with a credit card.
The DVLA also charge a fee of £2.50 to buy a tax disc on credit.
Melanie Johnson, chairman of the UK Cards Association, which represents the banks, said; “It is high time customers are given a voice where the true cost of what they are buying is made clear to them.”
Stephen McNamara, Ryanair spokesman, hit out saying Which? did not know what they were talking about.
“Before making 'super-duper complaints' the clueless clowns at 'Which, Who or What' magazine, should do some basic research,”' he said.
“'Ryanair does not levy any debit or credit card payment 'surcharges'. Even our administration fee is avoidable by passengers who use our recommended MasterCard Prepaid.”
The airline launched a scornful assault on Which?, branding it ‘useless, irrelevant and inaccurate’.
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From its UK head office in Monks Brook, Loans 4 You operates across Britain, sourcing bad credit loans for people with bad credit.
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Bad Credit Loans 4 You is also covered by the Financial Ombudsman.
Bad Credit Loans 4 You is also registered with the Information Commissioner’s Office for Data Protection.
