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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 10:24

Airlines forced to scrap 'surprise' debit card charges

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.

6 comments so far. Why not have your say?

J-S B

Jul 05, 2012 at 12:13

So it appears that if you pay by credit card, the headline flight price will have already been hiked at the front end (on the assumption you are paying by debit card) and then you will pay a credit card fee aswell. If so, thanks OFT, you've just put my costs up.

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steve carr

Jul 05, 2012 at 12:17

Did you know that Jet2.COM have charged...£27 to use my credit card, £60 to check in at the airport AND £26 for admin fees ? all this when it was me who did the booking, nobody else was involved but me.

This is what tha Government should be looking into !

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Ian Phillips

Jul 05, 2012 at 12:26

Here we go again.......we all will pay more to "protect" those that don't read the booking conditions.

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J-S B

Jul 05, 2012 at 12:56

Ian Phillips, you are right. Nobody pays "unknown" fees except morons. There's been so much publicity about this that nobody except dimwits won't know what to expect - I resent paying for them, which is what this story implies.

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51Degrees North

Jul 05, 2012 at 21:30

Good deal. These crooks.

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Steve Hayes

Jul 06, 2012 at 12:13

Just because most of us know that the small print raises the price by whatever doesn't make it right; it isn't one cheer for the OFT.

They'll never get the 2nd cheer because they've take so long to get round to it, the 3rd cheer would be if they managed to control the credit card charges to something resembling the cost (which is in fact under 1% if my experience is a guide).

The story says that customers can now expect to pay the "headline price", does this mean so called admin charges are also on their way out?

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