The ACCC Declares War On Excess Card Charges

One of my pet hates when I shop is that little notice next to the counter that says the use of credit cards and debit cards will incur extra fees. In many cases, the charges have been far in excess of what the stores actually pay for the transactions and the ACCC has had enough. They are now going after companies and taking them to court for adding what they deem excessive fees. Today, they’ve announced they’re going after car rental firm Europcar after Cruisin Motorhomes was forced to pay $12,600 in fines earlier this month. If you’re taking payments by credit card, or feel you’re being slugged excessively, there are steps you can take.

In a statement, the ACCC alleges Europcar jacked up credit card fees by between 0.18 percentage points to as much as 0.65 percentage points for different cards and over different time periods. This was despite being told by its bank what the fees were. The ACCC has launched legal proceedings with ACCC Chair Rod Sims saying “The ACCC’s action serves as a warning that the ACCC is paying close attention to those businesses who seek to overcharge customers making payments by credit or debit cards”.

This follows action taken against Cruisin Motorhomes last week.

The ACCC announced the focus on excessive charges almost a year ago and has given businesses time to move to compliance with the laws that were changed in September 2016.

When they announced the new rules, the ACCC recommended businesses that set a single surcharge for all payment methods should use the lowest fee and not an average.

If businesses want to set a single surcharge across multiple payment methods, the surcharge must be set at the level of the lowest cost method, not an average. For example, if a business’s cost of acceptance for Visa Debit is 1 per cent, for Visa Credit is 1.5 per cent, and for American Express is 2.5 per cent, the single surcharge would be 1 per cent as that is the lowest of all payment methods.

(Source: ACCC Excessive payment surcharge ban)

If you run a business and take credit card payments you have a couple of options. Be clear to customers about the charges and only charge what you’re paying – don’t add any margin.

If you choose to have a single surcharge for all payments, it must be the lowest. ACCC Deputy Chair Dr Michael Schaper said “Our advice for businesses wanting to set a single surcharge regardless of the type of card their customers use is it must be the lowest of all the payment methods. You can’t use an average of all payment methods or you will land yourself in trouble”.

Alternately, you can either accept the fees as a cost of doing business and not pass them on to customers or ensure you’ve covered them in the way you price your goods.

For consumers, if you think the fees you’re being charged are excessive, take a picture of the notice with the fees at the store your in (or a screen grab if it’s online) and report the issue.

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