Travel firms are being urged to review their pricing ahead of the ban on credit card charges from next year.

Under the EU Payment Services Directive 2, due to come into force on January 13, businesses will no longer be able to charge a fee to customers for processing payments by credit and debit card but will have to absorb the cost.

Farina Azam, partner at law firm Travlaw, said: “Travel companies need to look at their pricing now.”

Speaking at a seminar during the ITT Conference last week, she said: “If you don’t want to absorb the credit card fee for balance payments post-January 2018, you need to start including the fee in your headline prices.”

Azam added: “Companies will need to be careful with holidays booked with a deposit before January 13 and full payment due after this date.

“Although they will be able to charge a credit card fee for the deposit, they won’t be able to do so for the balance payment.”

She warned customers would have a legitimate case to claim back card fees included on balance payments made after January 13.

Azam said businesses should be “wary” of offering discounts or incentives to customers to encourage alternative payment methods to avoid card fees.

“If your advertised prices include the charge, and you offer a 2% discount to customers who pay by bank transfer, you could potentially be considered to be creating a charge for holidaymakers who pay by card, as they will be paying more for using another payment method.”

Also speaking at ITT was Travlaw senior partner Stephen Mason. Commenting on the rise in fraudulent sickness claims, he said: “We will have a sticky few months ahead, but the industry is fighting back. Give it a year and I think we will see an end to this problem.”