Of Special Interest
- Financial wellness affects half of peoples’ mental or physical health, finds report
- Study finds traditional financial institutions embrace Fintech disruption
- Grass is greener for environmentally friendly businesses, finds Barclays
- Prospective homeowners would consider a 40-year mortgage to escape renting, finds Santander
- Millennials’ needs are changing the face of banking industry, says new report
- FS is putting consumer data at risk by failing to protect mobile apps, says Arxan
- A lack of belief in their ability holds 28% women back in work, says Cambridge & Counties
- ‘Which?’ reveals Scotland has lost over a third of its bank branches in eight years
- Next downturn unlikely to be as bad as 2008, according to S&P
- FCA reveals findings from first cryptoassets consumer research
- US consumers favour single mobile app for banking and payments
- Banks suffering major IT shutdowns every day, ‘Which?’ reveals
- The US will be a key offshore centre in 2019, says GlobalData
- Debit industry changes markedly in 10 years of the Debit Issuer Study
- UK's ‘Big Five’ face ‘too big to compete’ as small challengers secure stellar returns
- Banks as vulnerable now as before crash, says new study
- Leverage ratio a constant conundrum for European and US banks, says SNL
1st July 2011
UK Airlines surcharge for debit card banned - overall ban may follow
The UK regulator, the Office of Fair Trading has ordered travel companies, and in particular airlines, to stop surcharging for debit cards. Explaining the principle the OFT states: "surcharging for using a credit or debit card is potentially misleading to consumers when it comes as a surprise - particularly when free payment mechanisms are only available to a small proportion of consumers, making a surcharge effectively compulsory."
The OFT goes on to state that providing there is one widely available method available for payment with no surcharge, in this case debit cards, then it will not prevent a surcharge for credit cards, as the credit card involves a greater cost to the service provider.
The OFT states that it will take enforcement action if necessary using its powers to prevent misleading advertising. It goes on to recommend that the government change the law to prohibit surcharging for debit cards in all situations. Older people will remember there was a time when surcharging for the use of all cards was prevented by the merchant agreement with card companies. Regulators decided it was in the consumer interest for these provisions to be ended and for merchants to be allowed to make surcharges.