Britain to ban hidden card surcharges

Mark HobanBritain's Office of Fair Trading is calling for firms to end hidden credit and debit surcharge fees on purchases such as flights, concert tickets and other goods.

British Financial Secretary to the Treasury Mark Hoban said that customers have the right to see the full amount of the cost of their transaction before they agree to pay, reports.

The proposed rule will impact debit card issuers as well as the retail sector. It will allow businesses to add a charge so that the cost of the payment method is covered but they will not be allowed to add on excessive fees.

In Europe, a directive is already underway to ban businesses across many sectors, including airlines, from imposing unfair surcharges on forms of payments. The directive, however, will not be implemented until mid-2014.

Hoban said OFT plans to act faster than that timetable.

“We’re leading the way in Europe by stopping this practice,” Hoban said, reports. “The government remains committed to helping consumers get a good deal in these difficult times.”

Earlier this year, OFT found that debit card surcharges were adding £265,000 each day to the cost of flights. The office also found evidence that “drip pricing” has become a common practice for companies. Drip pricing adds payment charges to the total price only after consumers have completed many web pages to make their purchase.

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