Profiting from card charges set to be outlawed

Airlines face a new year clampdown on imposing excessive or surprise charges on passengers who pay by debit or credit card.

Carriers such as Ryanair, together with theatres and other retailers, will have to make sure their card charges are clearly displayed upfront.

The government will also limit the size of the charges, so retailers and traders cannot make a profit from them.

Consultation is expected to be launched as early as today (Monday) by the Department of Business following a recommendation from the Office of Fair Trading last December.

The start date for the new rules will be decided during a consultation this month, but the aim is to bring them in by the beginning of January, the BBC reported.

Consumer affairs minister Norman Lamb said: “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.

“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.”

Passengers spent a total of £300 million on card surcharges in the airline industry alone in 2010, last year’s OFT report found.

The probe, prompted by a super-complaint by consumer watchdog Which?, described the charges as a “payment to pay”.

Richard Lloyd, of Which?, said: “The government must ensure that all businesses only charge the genuine cost they incur for processing the payment and that they are upfront, and make this clear to consumers.

“We also want to see a robust enforcement regime in place, to make sure firms are held to account if they flout the ban.”

EasyJet introduced a £9 upfront administration fee in January, replacing the previous £8 booking fee levied on anyone paying with most debit cards.

Eleven 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, after a further investigation by the OFT.

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