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28/06/2011
OFT To Take Action Over Passenger Surcharges
The OFT has put passenger travel companies on notice to change misleading debit and credit card surcharging practices or face enforcement action under consumer protection laws.
Publishing its findings on these surcharges, following a super-complaint from Which?, the OFT also calls for the law to be updated to stop consumers being surcharged when buying goods and services with any debit card.
A 90 day OFT investigation into the issue, which focused on the passenger transport sector, found considerable evidence of companies using 'drip pricing' practices for surcharges online - adding payment charges to the total price only after consumers have filled in a number of web pages during their purchase. This practice is particularly prevalent in the airline sector - where the OFT estimates UK consumers spent £300 million on payment surcharges during 2009.
The OFT considers that 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.
To make headline prices truly meaningful and comparable, the OFT is calling for traders to stop charging for paying with any debit card - the online equivalent to cash. Traders should still be able to impose surcharges for other payment mechanisms such as credit cards, which can be more costly to process, provided that they meet the minimum transparency requirements set out by the OFT in today's report.
The OFT is currently discussing surcharging practices with a number of passenger travel companies to secure compliance with Consumer Protection Regulations and will take enforcement action as necessary.
(BMcN/GK)
Publishing its findings on these surcharges, following a super-complaint from Which?, the OFT also calls for the law to be updated to stop consumers being surcharged when buying goods and services with any debit card.
A 90 day OFT investigation into the issue, which focused on the passenger transport sector, found considerable evidence of companies using 'drip pricing' practices for surcharges online - adding payment charges to the total price only after consumers have filled in a number of web pages during their purchase. This practice is particularly prevalent in the airline sector - where the OFT estimates UK consumers spent £300 million on payment surcharges during 2009.
The OFT considers that 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.
To make headline prices truly meaningful and comparable, the OFT is calling for traders to stop charging for paying with any debit card - the online equivalent to cash. Traders should still be able to impose surcharges for other payment mechanisms such as credit cards, which can be more costly to process, provided that they meet the minimum transparency requirements set out by the OFT in today's report.
The OFT is currently discussing surcharging practices with a number of passenger travel companies to secure compliance with Consumer Protection Regulations and will take enforcement action as necessary.
(BMcN/GK)
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The Office of Fair Trading has announced that twelve airlines, including easyJet and Ryanair, have agreed to no longer spring last-minute fees on customers paying by debit card. The carriers have agreed to include debit card surcharges in the headline ticket price rather than surprise consumers at the end of the booking process.
08 October 2003
M&S backtracks over &More credit card after OFT probe
Marks and Spencer Financial Services (MSFS) has changed the way it will offer to replace its store cards by the &More credit card after action by the Office of Fair Trading. MSFS had sent out letters to many card holders saying that its store card would automatically be replaced by the &More credit card unless card holders objected.
M&S backtracks over &More credit card after OFT probe
Marks and Spencer Financial Services (MSFS) has changed the way it will offer to replace its store cards by the &More credit card after action by the Office of Fair Trading. MSFS had sent out letters to many card holders saying that its store card would automatically be replaced by the &More credit card unless card holders objected.
05 April 2006
OFT clamps down on credit card charges
The Office of Fair Trading has slammed credit card charges, saying that they have generally been set at "a significantly higher level than is legally fair". Credit card default charges are imposed when customers fail to make the minimum payment on the credit card on time or exceed their credit limit.
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The Office of Fair Trading has slammed credit card charges, saying that they have generally been set at "a significantly higher level than is legally fair". Credit card default charges are imposed when customers fail to make the minimum payment on the credit card on time or exceed their credit limit.
07 August 2008
BA Bosses Charged With Price Fixing
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BA Bosses Charged With Price Fixing
Four men have been charged with cartel offences in connection with a criminal investigation into price-fixing. The Office of Fair Trading (OFT), which has brought the charges, say that the men are charged with price-fixing of fuel surcharges for long haul flights.
18 March 2004
Competition Commission to examine Store Cards
The Office of Fair Trading has referred the supply of store cards to the Competition Commission following a study of the sector worth over £4.8 billion a year in the UK.
Competition Commission to examine Store Cards
The Office of Fair Trading has referred the supply of store cards to the Competition Commission following a study of the sector worth over £4.8 billion a year in the UK.
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