Retailers are planning to introduce new charges to sneak around a ban on rip-off credit card fees, it is claimed.
New rules from January 13 are to prohibit the addition of extra charges, which have been levied at up to three per cent, when customers pay by credit card.
Firms often have to pay for collecting payments via credit card, but only at a tiny percentage rate, and many have been making a fortune out of customers by billing them excessively for the privilege of paying with plastic.
According to a report yesterday, unscrupulous companies are planning to simply increase their prices or introduce new supposed ‘service charges’ to ensure they get the same amount of cash
It seemed new legislation would stop it – but according to a report yesterday, unscrupulous companies are planning to simply increase their prices or introduce new supposed ‘service charges’ to ensure they get the same amount of cash. And customers will keep paying it.
Share this article
To make matters worse, some of the price rises will be across the board, affecting cash payers as well as those using credit cards.
The new rules were brought in to protect consumers, because so many shops, holiday firms and even councils and other public bodies have been making customers using credit cards pay fees amounting to up to three per cent extra.
Takeaway meal giant Just Eat is complying with the new law by scrapping a 50 card surcharge – but is introducing a new ‘service charge’ of 50p for every customer, including those using cash, because it ‘ensures fairness for all’
The fees have been said to be necessary to cover costs – but for two years the EU has limited charges firms pay for accepting credit cards have been limited to just 0.3 per cent.
Even though the rule change is imminent, Ryanair was still charging customers two per cent for paying with credit card, and EasyJet one per cent, well into December.
Local authorities including Warwick district, Buckinghamshire county, and Derby City councils were all still charging one per cent.
According to the newspaper, the source said: ‘We agreed to increase all our prices by whatever amount we calculate will cover the cost of the fees we are charged by Visa, Mastercard and American Express.
‘We estimate that removing the surcharge will result in a significant shift away from payments by debit card and bank transfer so the increase [in extra costs] will be greater than the current credit card surcharge.’
HMRC has also said it is stopping accepting credit cards because it cannot afford to pay the fees without charging for them. Other large bodies could follow
Takeaway meal giant Just Eat is complying with the new law by scrapping a 50 card surcharge – but is introducing a new ‘service charge’ of 50p for every customer, including those using cash, because it ‘ensures fairness for all’.
HMRC has also said it is stopping accepting credit cards because it cannot afford to pay the fees without charging for them. Other large bodies could follow.
Which? Consumer expert Gareth Shaw said: ‘These new rules should finally put an end to consumers paying excessive surcharges and additional fees just for using their cards.
‘Trading Standards must make sure this ban is enforced across the board and that businesses can’t find sneaky ways around it.’
And spokesman for the Fairer Finance campaign group James Daley said of the coming change: ‘It will mean prices will go up for customers and those who pay in cash will be worse off as a result.
However, the new system will be fairer and more transparent and is still a victory to consumers.’
A spokesman for the Treasury said: ‘Banning surcharging will help protect consumers from rip-off charges.
‘Pricing is a commercial decision for individual businesses and the ban will make it easier for consumers to compare prices and choose the right deal for them.’
A spokesperson for Just Eat said: “At Just Eat, we always ensure we comply with all relevant legislation.
We were already reviewing our approach to charging for the services we provide to customers on behalf of our restaurants. As of 8 January 2018 we are making a change to the way restaurants are charged to process Just Eat orders – a 50p service charge will be implemented for all orders.”