Most people have experienced the frustration and anger that comes with finding cheap flights online, only to discover that extra ‘hidden’ charges have been added to that low-cost flight by the time you reach the payment page.
Happily, this could soon become a thing of the past as both consumer watchdogs and the Office of Fair Trading have urged the government to ban surcharges on payments with debit cards.
Which?, the consumer watchdog, investigated fees and surcharges in the travel industry and found that flight ticket debit card surcharges are costing an extra £300million to customers’ wallets each year.
The investigation found that many companies were using the ‘drip pricing’ tactic. This is when charges are added after customers have filled in a number of web forms in the payment process.
Which? attempted to put an end to the practice earlier this year by lodging a super-complaint. They claimed that the cost of processing debit card transactions is actually around 20p and for credit cards it is up to 2%.
However, airlines such as Ryanair were charging around £48 for a family of four to pay with either a debit or credit card.
The consumer watchdog demanded that travel companies must stop charging ‘rip-off’ fees. If they do not, they have threatened enforcement action by asking the government to ban the surcharges.
But it could take over a year for the OFT to bring enforcement action against these companies under the Consumer Protection from Unfair Trading Regulations 2008. And changes to the law, through the adoption of the European Consumer Rights Directive, will take two years or more to come into action.
Cavendish Elithorn of the OFT said: “You can’t buy online with cash, and people are frustrated about being asked to pay for paying.
“We will take enforcement action against any businesses that do not respond to this announcement and instead continue to use misleading surcharging practices.
“We believe there is also a strong case for a change in the law so that the cost of using a debit card – the almost universal payment method for today’s online consumers – is always included within the headline price.”
Martin Lewis, of MoneySavingExpert.com, strongly supports a ban on surcharges. He said: “What we need is a law that says that for online transactions, the core price advertised must be what you would pay by using a debit card. The current system of budget airline surcharges for both debit and credit cards is a scam. If charges are effectively compulsory, the budget airlines need to ‘man up’ and put them in the full price.”
EasyJet claim that, while they also support doing away with surcharges, they cannot do so while their competitors continue to charge.
Their spokesman said: “While we are happy to support a move toward making charges fairer – and legislation would be a step towards this – if we move unilaterally, we would put ourselves at a disadvantage. Many of our seats are sold by third parties, and we would be at a disadvantage if they continued to add surcharges and we did not.”
If you want to share your experiences or thoughts about debit card surcharges, head over the FindLaw Community.
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