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Airlines forced to scrap 'surprise' debit card charges
The Office of Fair Trading says airlines should not charge people to pay by debit card because it is the online equivalent of cash. They can, however, still charge credit card fees.
by Victoria Bischoff on Jul 05, 2012 at 10:24Follow @VBischoff
Airlines will no longer be able to hit customers with a ‘surprise’ debit card fee when booking flights online following a crackdown on mis-leading surcharges by the regulator.
The Office of Fair Trading (OFT) said people should not have to incur debit card surcharges because they are the online equivalent of cash. The headline price should be the price people can pay.
The 12 airlines – Aer Lingus, BMI Baby, Eastern Airways, Easyjet, Flybe, German Wings, Jet2, Lufthansa, Ryanair, Thomas Cook, Thomson and Wizz Air – that were found to charge debit card fees have now formally agreed to scrap these extra charges and include the cost in their headline price by 1 August.
Failure to do so will result in court action, the Office of Fair Trading (OFT) has warned.
Airlines will still be able to impose a charge on customers who pay by credit card, as this can be more costly for the company to process, the OFT said. However, airlines have been ordered to make their credit card charges transparent and easy to find so that they are not ‘sprung’ on shoppers at the end of the booking process.
It is critical that the cost people are presented with when they book flights online is ‘realistic’ otherwise it is harder to shop around for the best deal, said Clive Maxwell, the OFT’s chief executive.
‘We made it clear from the start that we would use all of our enforcement powers, including court action if necessary, but are pleased to have reached agreement with the airlines before court proceedings were required,’ he added.
Sarah Brooks, director of financial services at Consumer Focus, meanwhile said the move is 'long overdue'.
'Nothing is more frustrating for consumers than seeing a good online deal disappear on the final screen before booking,' she said.
During its investigation last year the OFT revealed that debit and credit card surcharges in the airline sector cost customers an estimated £300 million a year.
The airline sector – where unfair and excessive charges were found to be particularly prevalent – was warned then to change its practices or risk enforcement action following a super-complaint from consumer group Which?
The government has since announced plans to bring forward legislation to ban excessive debit and credit card charges across the economy.
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