The days of companies charging ridiculous amounts of surcharges just because customers are paying with plastic are coming to an end. The Federal Government has passed a bill that will give the Australian Competition and Consumer Commission (ACCC) the power to rein in companies that slug customers with a high fee when they pay with their credit cards. Here’s what you need to know.
Credit card payment image from Shutterstock
For years many businesses have gotten away with charging crazy amounts of money as a fee when customers decide to use a credit card. The airline, ticketing and taxi industries are the worst offenders but even small business owners have taken advantage of the lack of regulation in this area by charging a certain percentage on top of purchases if they don’t meet a minimum spending requirement (I’m looking at you, my local Chinese takeaway restaurant).
But with the Competition and Consumer Amendment (Payment Surcharges) Bill 2015 passed by the Government this week, companies will have to ease off on the credit card surcharges. The bill clears the path for a framework to be established that would “ban surcharges imposed in respect of particular payment methods that exceed the cost of acceptance for those payment methods”.
The ACCC has been given the power to ensure that businesses fall in line with the said framework and can issue infringement notices and fine companies up to $108,000 for violating the rules. The Reserve Bank of Australia (RBA) is currently finalising the regulation which is expected to be rolled out in the coming months.
No doubt this would ruffle some feathers in the airline industry. A recent study done by consumer rights group Choice found that customers of the big airlines in Australia were charging exorbitant amounts as a surcharge when a credit card is used. Considering that credit card is usually the only accepted form of payment, this hardly seems fair. Here is the breakdown of Choice’s findings:
“What better way to put your customers first than being the first to company to officially end the excessive surcharge frenzy,” Choice spokesperson Tom Godfrey said in a statement. “It’s time the airlines, ticketing companies and taxis stopped gouging their customers and started treating them with a little respect.”
Comments
9 responses to “New Law Passes To Crack Down On Excessive Credit Card Surcharges”
When does this come into effect? 2015 Bill passed in 2016 but you haven’t said how long we have to wait for this to come to an end. Can you please look into and advise Spandas? Many thanks!!!
Hi there! As mentioned in the article, he RBA is finalising the regulation, which will take a few months. There is no set date as yet but we’ll keep you posted as soon as we hear anything!
$7 booking fee on Jetstar?? Try $17 for each person! Where do I lodge my ACCC complaint?
Remember, they’re Choice figures. Would be amazing if they were right.
I ve booked a trip to NZ for 4 with Airasia last week, $1000, + $80 for the CC fee !!!! Insane
How about Cinemas with their online booking fee, $5 per seat in gold class, which can be as much as 16.7% of the cost of the seat itself ($30) if you go on tuesday at village, even if you use their gift cards. Yet they don’t charge that fee if you pay by gift card/credit card at the cinemas.
Meanwhile at Qantas actuarial…
Underling: “Boss, we are going to have to cut out this surcharge.”
Manager: “Hang on there Brett. Just give it a week to blow over. My predecessor’s predecessor taught me that one.”
More like….
Muktananda: “Sandeep, we need to cut out this surcharge”
Sandeep: “No Tananda, we can say it’s postage and handling charges”
I’ll be glad to see the taxis stop doing this. $20 taxi ride with $4 fee to pay with eftpos