Australians Are Still Being Rorted By Credit Card Surcharge Fees

A CHOICE investigation has found that many Australian companies are continuing to ignore Reserve Bank of Australia (RBA) rules designed to limit credit card surcharge fees. Not surprisingly, taxis and airlines were found to be among the worst offenders.

Credit card picture from Shutterstock

At the beginning of the year, RBA introduced new regulations to restrict businesses from charging excessive surcharges for credit card payments. As we noted at the time, the rules don’t actually stop merchants from charging for the use of credit cards, however. It’s basically up to the credit card provider to limit charges to “the reasonable costs of card acceptance”.

According to a new CHOICE survey, plenty of customers are still being slugged by excessive credit card surcharge fees with taxi and airline services flagrantly disregarding the new rules. Around half of the 1045 Australians polled said they had been required to pay a surcharge in the past three months and were not offered an alternative, surcharge-free payment method by the merchant.

“Excessive surcharges can be a real sting in the tail, turning what looks like a bargain into something more expensive, especially when so many consumers say they are not being offered another option,” CHOICE CEO Alan Kirkland said in a statement.

“It’s now 72 days since the [RBA] rules came into effect and in this time, the worst excessive surcharging offenders have continued charging Australians millions more in surcharges than it costs to process these transactions.”

Cabcharge, Qantas, Virgin Australia, Jetstar and Tiger were all highlighted in the report as some of the biggest culprits, with surcharge fees sometimes exceeding 17 per cent of the total cost.

“For a family with two kids flying from Brisbane to Sydney return with Tiger, $49.95 per flight might look like a cheap ticket, but when you add $68 in surcharges, that’s a staggering 17% of the fare’s price,” Kirkland said.

Brisbane to Sydney flights from Qantas, Virgin Australia and Jetstar accrued a surcharge of 4.3 per cent, 7.9 per cent and 4.2 per cent, respectively.

“We urgently need strong enforcement and policing of the surcharging rules, beyond what Visa and MasterCard can bring to bear through their commercial dealings,” Kirkland concluded.

In a bid to combat excessive credit card surcharges, CHOICE has set up a website where customers can name and shame companies that partake in this shoddy practice. If you’ve been slugged with an unreasonably credit card fee, head to Choice’s Take Charge page and leave a comment.


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