Services
People
News and Events
Other
Blogs

Hidden card surcharges for travel tickets to be banned

View profile for Andrew Leakey
  • Posted
  • Author
Last month, my friends and I decided to book a last minute trip to Switzerland. We managed to find what appeared to be bargain flights through a particular budget airline. We spent over 10 minutes completing all of the various screens, and then got to the final screen, to process payment.
 
Being a solicitor who specialises in consumer law, I am always prudent to pay for any large purchases on the internet by credit card, to ensure that I have the protection under section 75 of the Consumer Credit Act 1974. I therefore entered my card details, and was then informed that as I was paying by credit card, an additional £12.95 was being added to the sale. It was still £8 should I chose to pay by debit card, and therefore there was little choice other than to pay the charges. No other payment options were given.
 
I was understandably very annoyed by this, and I don’t appear to be the only one. This week, the Office of Fair Trading (OFT) has ordered travel companies to make all debit or credit card charges clear immediately. The OFT has warned it will take action if companies do not comply.
 
It appears to be quite common among most airline, ferry and rail websites for passengers to have to click through four to six pages of an online booking before the charge is added to the price. The OFT said travellers spent £300m on card surcharges in the airline industry alone in 2010. While budget airlines appear to be the biggest culprits, some of the mainstream airlines are also guilty. It is not just travel companies who insist on these surcharges. Cinemas, hotels and even some local authorities are starting to copy them. 
 
The OFT has released the following figures for companies: Typical card surcharges
 
 
Trader

Credit card surcharge

Debit card surcharge

British Airways

£4.50 per passenger

£0

Easyjet

£8 plus 2.5% per transaction

£8

Jet2

7% per transaction (min £4.99)

3.5% per transaction (min £4.99)

Ryanair

£6 per journery

£6 per journery

DFDS Seaways

2.5% per transaction (min £4)

£0

The Trainline

£3.50 per transaction

£0

Source: OFT    
 
"We will take enforcement action against any businesses that do not respond to today's announcement and instead continue to use misleading surcharging practices," said Cavendish Elithorn, of the OFT.
 
The actual cost of processing online payments for these companies is minimal in comparison to the charges being levied. The OFT therefore also argued that charges to customers should be the same as the cost to retailers, and that retailers should absorb the cost of debit card payments. Many of these companies are currently making a profit from the fact that you have to use a card to pay online, and you have no other payment options available.
 
Most people probably would not notice if these surcharges, at cost, were simply included in the price of their purchase at the outset. There is frustration when people think they are paying for paying, rather than paying for the actual product.
 
Hopefully this decision by the OFT will have a positive impact and we will start to see a change when booking our holidays and flights in the near future.
 
By consumer solicitor, Heather Korwin-Szymanowska
 

Comments