Goodbye sky-high credit card surcharge fees

TODAY marks the start of a ban on excessive credit card surcharges, and the consumer watchdog wants people to speak up if they think they’re still getting slugged.

Tigerair has joined other domestic airlines in cutting credit card surcharges on airline tickets.

CONSUMERS are being urged to dob in big businesses that still charge exorbitant fees on credit card transactions.

As a new ban on excessive payment surcharges starts today, all domestic airlines have now reduced their credit card surcharges and event ticketing agencies are believed to be scrapping them completely.

Australian Competition and Consumer Commission chairman Rod Sims said the ACCC would be enforcing the new rules immediately, with fines of $1.1 million per offence and court action among the potential penalties for those who charge too much.

Mr Sims said “we do want to hear” from people who were slugged surcharges above 0.5 per cent for debit card transactions, above 1.5 per cent for credit cards, and above 2.5 to 3 per cent for American Express cards.

“We believe this system is going to work well because consumers will let us know if it’s not,” Mr Sims said.

The new laws prevent large businesses from profiting from card transactions, and end the frustrating situation where flat fees of $8 or more per ticket could form a large chunk of a purchase.

“Businesses can only pass on the permitted costs of the payment such as bank fees and terminal costs,” Mr Sims said. “As far as we understand, the major event ticketing companies will no longer be charging a fee based on how you pay for tickets.”

A Ticketmaster spokeswoman said that from today, ticket prices “will be the same irrespective of whether they pay by cash or use a debit or credit card”.

Qantas announced pricing changes in July, Virgin Australia said this week it would switch from a flat $7.70 per person fee to a 1.3 per cent credit card surcharge, and Jetstar Airways and Tigerair revealed their changes yesterday.

A Jetstar spokesman said its booking and service fees were being reduced from $8.50 (and $12.50 on international flights) to a 1.06 per cent surcharge on credit cards, 0.75 per cent for PayPal and 0.48 per cent for debit cards.

“The majority of Jetstar customers will pay less in fees than they currently do, and there will continue to be fee-free options for customers who prefer not to pay with a credit card,” he said.

A Tigerair spokeswoman said its $8.50 credit card fee would change to 1.33 per cent for Visa transactions and 1.25 per cent for MasterCard transactions. Lower surcharges apply to debit card transactions.

“Tigerair will also introduce the payment method POLi from 1 September to continue to provide customers with a fee-free form of payment,” the spokeswoman said.

Businesses are still allowed to charge other fees such as booking fees or service fees, the ACCC says. The new laws apply to businesses with revenue of more than $25 million, assets of more than $12.5 million or more than 50 employees. It extends to all businesses from September 2017.

Consumers can report rip-offs at www.accc.gov.au or by phoning 1300 302 502.

Originally published as Goodbye sky-high credit card surcharge fees