Economy

Ban on card surcharges comes into force

Ban on card surcharges comes into force”

A long-awaited ban on card surcharges has been welcomed by consumer groups amid advice to shoppers that they should be aware of retailers attempting to find ways around it.

A BAN on rip-off credit and debit card surcharges comes into force today.

In practice, this means you can not be charged more for paying by card instead of cash in a local shop, or for choosing to pay online with a credit card instead of a debit card.

Businesses usually say the surcharge is to cover the cost of processing a card payment.

Although payments using debit and credit cards are managed in the same way, most banks see more risk in sending a credit payment as opposed to debiting money directly from your account, and so they charge higher interchange fees.

John Glen, economic secretary to the Treasury, said: "It's completely unfair for someone to be hit by a hidden fee just before they are about to make a purchase, so by scrapping these rip-off charges we are helping to give power back to the consumer".

The ban is effective across the European Union from Saturday 13th January 2018 and will apply to all purchases made where the banks of the consumer and retailer are within the EEA.

Companies will still be able to add booking or administration fees as long as they also apply to other forms of payment and they can still set a minimum card payment.

GettyCredit card charges Just Eat have been criticised for a new 50p service charge
GettyCredit card charges Just Eat have been criticised for a new 50p service charge

Surcharges cost Brits around £166 million a year but today's ban will make it unlawful for retailers to charge these fees.

But it comes amid concerns that the cost of goods and services may creep up, or additional fees added by retailers, to compensate for the changes.

Essentially, the only thing that is now different is that companies are no longer allowed to pass these extra charges on to their customers; consumers must pay the same price for goods and services whether they choose to pay with cash or with plastic.

"As of 8 January 2018 we have made a change to the way restaurants are charged to process Just Eat orders - a 50p service charge will be implemented for all orders".

The surcharges have been commonly added by businesses ranging from takeaway apps to global airlines on customers who pay by card or use other services such as PayPal.

If you realise after a purchase that you have been wrongly charged, you can complain to the company and ask it to refund the charge.

Q. What happens when we leave the EU?



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