The days of companies charging ridiculous amounts of surcharges just because customers are paying with plastic are coming to an end. The Federal Government has passed a bill that will give the Australian Competition and Consumer Commission (ACCC) the power to rein in companies that slug customers with a high fee when they pay with their credit cards. Here's what you need to know.
Credit card payment image from Shutterstock
For years many businesses have gotten away with charging crazy amounts of money as a fee when customers decide to use a credit card. The airline, ticketing and taxi industries are the worst offenders but even small business owners have taken advantage of the lack of regulation in this area by charging a certain percentage on top of purchases if they don't meet a minimum spending requirement (I'm looking at you, my local Chinese takeaway restaurant).
But with the Competition and Consumer Amendment (Payment Surcharges) Bill 2015 passed by the Government this week, companies will have to ease off on the credit card surcharges. The bill clears the path for a framework to be established that would "ban surcharges imposed in respect of particular payment methods that exceed the cost of acceptance for those payment methods".
The ACCC has been given the power to ensure that businesses fall in line with the said framework and can issue infringement notices and fine companies up to $108,000 for violating the rules. The Reserve Bank of Australia (RBA) is currently finalising the regulation which is expected to be rolled out in the coming months.
No doubt this would ruffle some feathers in the airline industry. A recent study done by consumer rights group Choice found that customers of the big airlines in Australia were charging exorbitant amounts as a surcharge when a credit card is used. Considering that credit card is usually the only accepted form of payment, this hardly seems fair. Here is the breakdown of Choice's findings:
“What better way to put your customers first than being the first to company to officially end the excessive surcharge frenzy," Choice spokesperson Tom Godfrey said in a statement. "It's time the airlines, ticketing companies and taxis stopped gouging their customers and started treating them with a little respect."