Excessive credit card charges could end by January

| September 3, 2012 | 0 Comments
Excessive credit card charges could end by January

The government is to go ahead with new rules to prevent retailers imposing excessive or surprise charges on debit or credit card payments.

The changes, which were recommended by the Office of Fair Trading in 2011 following a super-complaint from consumer group Which?, could be introduced by January 2013.

Retailers, including airlines, will have to clearly display information about surcharges upfront, rather than after a customer has filled in pages of booking information.

Some e-commerce websites are also guilty of springing surcharges on customers when they reach the point of filling in payment details, rather than clearly displaying any charges for processing payments before the customer starts shopping.

The new rules will limit how much can be charged, to prevent retailers and traders making a profit from surcharges.

Consumer Affairs Minister Norman Lamb said: “Traders will no longer be able to make a profit by charging the consumer for credit or debit card use above the amount it costs them to process that payment.

“These proposals will stop companies from adding on these excessive charges, and allow consumers to see a clearer and more transparent breakdown of what they are paying for.”

The problem is particularly prevalent on travel and entertainment ticket booking sites, but is becoming more widespread with even some local authorities levying surcharges on card payments in excess of the real processing cost.

Meanwhile, credit card lending fell by £147 million in July, its biggest fall since August 2006, according to Bank of England figures.

It follows a £235 million increase in credit card borrowing in June.

Loans and other unsecured debts also fell in July, with overall consumer credit decreasing by £220 million throughout the month.

This is the largest fall in consumer credit since February 2012.

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