- Soon companies won’t be able to add extra if someone pays by credit card
- Yet there are no obstacles to adding a fee as long as it applies to everyone
- So businesses, like Just Eat, will now add a service charge for every transaction
James Burton And Ruth Lythe For The Daily Mail
Firms are set to pocket millions of pounds by introducing rip-off charges to get around a ban on credit card fees.
From today, businesses are forbidden from imposing an extra charge if someone pays for a product or service by credit card.
Companies have always insisted the charges were only imposed to cover the extra fees they had to pay for the cost of processing credit card payments. Campaigners, however, said they were hugely inflated and a brazen customer rip-off.
It was hoped that the ban would save consumers £473million a year.
Firms are set to pocket millions of pounds by introducing rip-off charges to get around a ban on credit card fees
But it has now emerged that some firms are trying to get around it. Travel agents, takeaway firms, airlines and football clubs have already admitted the dodge.
Although the new rules ban discrimination against anyone using a particular form of payment, there are no obstacles to adding an extra fee as long as it applies to everyone equally.
Businesses have seized the opportunity to charge more, imposing new ‘service charges’ or extra commission to ensure they don’t lose out.
MPs and campaigners last night slammed firms for trying to get around the ban, saying their plans were deeply cynical.
Hannah Maundrell, of comparison website Money.co.uk, said: ‘This makes a mockery of the law which is trying to protect us from getting ripped off.’
Takeaway delivery business Just Eat was one of the first to announce a fee hike in the wake of the European Union-wide ban.
It previously charged 50p when a card was used to book an order, but has now imposed this ‘service charge’ on all orders.
Research by Barclays investment bank suggests the new charges will add as much as £15million to revenues because customers who pay with cash will now be charged extra.
Travel agents thought they would face a tight squeeze with the new rules. According to accountant RSM, the industry is braced for a £150million hit.
But a survey by data company Wex found that 21 per cent of agents expected to charge all customers a new ‘booking fee’ to recover their profits.
Takeaway delivery business Just Eat was one of the first to announce a fee hike in the wake of the European Union-wide ban
And another 29 per cent said they will put up the overall cost of holidays.
As long ago as August, the Association of Independent Tour Operators (AITO) told the 122 holiday firms it represents to introduce a flat 0.5 per cent commission on all bookings received through travel agents.
Kate Kenward, of AITO, said: ‘Members are bound by our code of conduct and provide their specialist holiday services over and above the requirements of the package travel regulations and other legal requirements.’
Airlines could employ the same tactic. Ryanair only stopped charging 2 per cent per booking this week – at the last possible moment.
But boss Michael O’Leary is widely expected to put up prices elsewhere.
Alex Paterson, a transport analyst at Investec bank, said: ‘Currently, businesses can only pass on payment charges that genuinely reflect their costs.
‘Many airlines charge in excess of this, with Ryanair charging 2 per cent, and we expect them to increase underlying prices to compensate.’
A Ryanair spokesman said: ‘We don’t comment on analyst speculation.’ There are also reports of football clubs adding flat fees to avoid a profit hit.
Swansea City is forcing fans to pay as much as a £2.50 fee a ticket even if they hand over cash at the counter, on top of the advertised price. It triggered a backlash from fans, who branded the club ‘a joke’.
Swansea City is forcing fans to pay as much as a £2.50 fee a ticket even if they hand over cash at the counter, on top of the advertised price
Swansea said the changes were ‘largely due to the new Government legislation’.
And a source close to the club said they believed rival teams could follow suit in coming days.
The taxman has also been attacked for hypocrisy after HMRC stopped taking credit cards to avoid the extra cost of paying providers’ fees itself.
However, an MP gave a stern warning to companies trying to dodge the rules.
Speaking in a personal capacity, Rachel Reeves, chairman of the business select committee, said: ‘Companies should not be fleecing customers by charging an additional fee in an attempt to get around the ban.
‘The effectiveness of the ban should be monitored by the Government and the regulator.’
She added: ‘If necessary, they must take action to stop companies from shamelessly misleading customers.’