Friday, 23 December 2011

Government to crack down on excessive card charges

A campaign by Which? appears to have resulted in a positive result for the consumer as the government has promised to crack down on excessive charges imposed by companies when booking items online.

Which? says that consumers pay £300m a year in card surcharges with airlines being the greatest offenders. We have all been there and felt annoyed when the charges keep creeping up and it is probably a good thing for the government to act in this way. However, the price that the consumer will end up paying once the charges are outlawed will not be any lower than they currently pay now. The effect of the change in policy will be higher ticket prices, higher luggage charges or to describe additional charges as 'administration fees' rather than 'credit card fee'. Ryanair have today come out and spoken to this effect regarding their 'administration fee' which they feel is a justifiable charge. It will be intriguing to see how that progresses.

A point that seems to be overlooked is the charges imposed by credit card companies to businesses that affect their daily business. Presumably they profit rather handsomely from the revenue of their fees? Maybe the Chancellor should look into how these charges along with increases in APD are affecting British businesses who are doing their best in difficult times. Travel companies are also at daily risk from fraud from customers. When this occurs the travel companies are often left exposed and to foot the bill for a fraudsters holiday. At times like this the protection offered from the banks is pitiful.

It is correct and proper that companies should not profit from credit card fees but fares wont be cheaper and the people who continue to profit will be the the banks.