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[textarea]OFT bans debit card charges
Customers will no longer be charged a fee for using a debit card, the Office for Fair Trading has ruled. Credit card charges will also have to be made far clearer to customers when booking online or over the phone, stopping the shock faced by many consumers when they realise the total cost of their flight is considerably more than the originally quoted price.
The ruling is a blow to many travel companies, especially budget airlines such as Ryanair and easyJet, which have steadily increased their charges over recent years. The OFT said that consumers ended up paying an extra £300 million for their travel in 2009 as a direct result of these charges.
Ryanair, for example, charges £6 per passenger, per leg of each journey for those who book on either debit or credit card, meaning that a family of four face a booking fee of £48 on a return flight. The airline insists the charge is not for processing the card and says it is an ‘administration fee’, but campaigners point out it is nearly everyone pays it because it is impossible for a consumer to buy a ticket from a Ryanair office or by post.
easyJet charge £8 for a debit card transaction, and £8 plus a 2.5 percent fee for a credit card transaction. BA charge £4.50 per passenger for a credit card transaction but nothing for a debit card payment, whilst Jet2 charge 7% (minimum £4.99) for credit card payments and 3.5% (minimum £4.99) for a debit card payment.
The ruling by the OFT follows a so-called super complaint issued by Which?, the consumer watchdog, earlier this year. Which? said any charges levied should reflect that cost incurred by the company. In its complaint it said that the cost of handling a debit card was no more than 20p per transaction and that retailers such as supermarkets and department stores absorb this cost without question.
The OFT has mostly agreed with Which? and called for an immediate end to debit card charges. It said it was already in talks with ferry, rail and air companies and would take to court any company that failed to fall into line, using consumer protection laws. The OFT said it also wanted the Government to pass legislation to outlaw debit card charges, so that in future there was no ambiguity about the issue.
However, the OFT said credit card charges could continue, but only if they were made far clearer to customers and stated immediately below the headline price or ‘one click away’ on a web page. A spokesman said: ‘We don't want people find out about the charge after they have spent ages filling in their passport number and luggage details.'
Which? called on companies to start scrapping their debit card fees with immediate effect, pointing out that one company, Monarch Airlines, had already done so. The OFT expects the change to take up to six months to be implemented.
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This is great news for airline passengers. These kind of charges all add up and make what initially might seem like a reasonably priced flight begin to look expensive by the time you've got as far as booking. I am sure the charges will just be added to the price of a ticket, but at least it will make the price of flights more transparent which is what people want.
Customers will no longer be charged a fee for using a debit card, the Office for Fair Trading has ruled. Credit card charges will also have to be made far clearer to customers when booking online or over the phone, stopping the shock faced by many consumers when they realise the total cost of their flight is considerably more than the originally quoted price.
The ruling is a blow to many travel companies, especially budget airlines such as Ryanair and easyJet, which have steadily increased their charges over recent years. The OFT said that consumers ended up paying an extra £300 million for their travel in 2009 as a direct result of these charges.
Ryanair, for example, charges £6 per passenger, per leg of each journey for those who book on either debit or credit card, meaning that a family of four face a booking fee of £48 on a return flight. The airline insists the charge is not for processing the card and says it is an ‘administration fee’, but campaigners point out it is nearly everyone pays it because it is impossible for a consumer to buy a ticket from a Ryanair office or by post.
easyJet charge £8 for a debit card transaction, and £8 plus a 2.5 percent fee for a credit card transaction. BA charge £4.50 per passenger for a credit card transaction but nothing for a debit card payment, whilst Jet2 charge 7% (minimum £4.99) for credit card payments and 3.5% (minimum £4.99) for a debit card payment.
The ruling by the OFT follows a so-called super complaint issued by Which?, the consumer watchdog, earlier this year. Which? said any charges levied should reflect that cost incurred by the company. In its complaint it said that the cost of handling a debit card was no more than 20p per transaction and that retailers such as supermarkets and department stores absorb this cost without question.
The OFT has mostly agreed with Which? and called for an immediate end to debit card charges. It said it was already in talks with ferry, rail and air companies and would take to court any company that failed to fall into line, using consumer protection laws. The OFT said it also wanted the Government to pass legislation to outlaw debit card charges, so that in future there was no ambiguity about the issue.
However, the OFT said credit card charges could continue, but only if they were made far clearer to customers and stated immediately below the headline price or ‘one click away’ on a web page. A spokesman said: ‘We don't want people find out about the charge after they have spent ages filling in their passport number and luggage details.'
Which? called on companies to start scrapping their debit card fees with immediate effect, pointing out that one company, Monarch Airlines, had already done so. The OFT expects the change to take up to six months to be implemented.
Source[/textarea]
This is great news for airline passengers. These kind of charges all add up and make what initially might seem like a reasonably priced flight begin to look expensive by the time you've got as far as booking. I am sure the charges will just be added to the price of a ticket, but at least it will make the price of flights more transparent which is what people want.
