Of Special Interest
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.