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The Friday Five: regulatory moves we're still waiting for
This week the OFT clamped down on airlines charging customers to pay by debit card. Here are some other interventions we're waiting for.
by Victoria Bischoff on Jul 06, 2012 at 12:09Follow @VBischoff
News that airlines will no longer be able to charge customers a ‘surprise’ debit card fee when booking flights online has been hailed as a major victory in the battle against misleading and excessive card surchages.
And it comes thanks to intervention by one of our regulators – the Office of Fair Trading (OFT).
Here are five other regulatory interventions we’re still waiting for, and how they too could help consumers.
1. Ban on excessive fees and charges
Although the OFT’s announcement yesterday is a step in the right direction, what we’re really waiting for is the government to bring in its ban on rip-off card surcharges!
As an early Christmas present last year, the Treasury promised us that by the end of 2012 retailers will no longer be able to charge us excessive fees for paying by card – bringing forward similar European proposals that are not due to come into effect until mid-2014.
Instead, traders will only be allowed to levy a ‘small charge’ to cover the cost of processing a debit or credit card payment. A fairer charge – according to consumer group Which? – would be between 10p and 20p for a debit card payment and no more than 2% of the total value of any credit card transaction, but we're still waiting to find out what the charges will be. At present budget airlines commonly charge as much as £12 per person to pay by card.
The best part is that the ban will not just be confined to the travel industry, it will cover most sectors such as cinemas, hotels, booking agencies and even local councils.
2. Payday loans crackdown
Complaints about the much-maligned payday loan sector more than doubled last year, and after raising concerns that companies are taking advantage of people in financial difficulty the OFT launched an ‘extensive’ investigation earlier this year.
The regulator said it was also concerned that firms were giving out loans without first checking that the borrower could repay them, targeting inappropriate groups of people – like students, for example – and rolling over loans so that charges escalate and loans become unaffordable.
Its findings are due out later this year, and for consumer groups that have long complained that the market is poorly regulated they can’t come soon enough. MPs, meanwhile, have similarly thrown their weight behind the investigation, urging the government to take swift action should it reveal companies aren’t acting appropriately.
More about this:
More from us
- Payday loan firms investigated over irresponsible lending claims
- Payday loans: perfect for ‘plane tickets to the Canary Islands'
- Payday loan and debt management companies attacked by MPs
- Packaged current accounts: did banks not learn from PPI?
- FSA cracks down on packaged current accounts
- Energy bills: the 'great national scandal'
- Airlines forced to scrap 'surprise' debit card charges
What others are saying
- Treasury press release
- OFT investigation into gyms
- High court ruling on gym contracts
- ‘current investigations’
- EDF Energy
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