The credit card fee mystery
DH100,000 FINE WILL NOT DETER PRACTICE BY UNSCRUPULOUS MERCHANTS IF CONSUMERS’ RIGHTS ARE NOT ENFORCED, RESIDENTS SAY
Shoppers complain many retailers charge extra fee despite several warnings against illegal practice
Shoppers have complained they are still asked by many retailers to pay extra when using their credit card despite several warnings against the illegal practice.
The latest warning came on Sunday by the Abu Dhabi Department of Economic Development, which said the Ministry of Economy will slap a fine of up to Dh100,000 on those who impose extra fees on credit card payments.
“I’m happy to hear that there is now a fine of up to Dh100,000 on those charging extra fees but I don’t know how it will be enforced. When I pay extra by card, the bill only shows the total amount paid. There is no breakdown of any surcharge. So how will I prove my rights have been violated?” said A.F., 31, a Filipino shopper.
He added that he has been buying electronics since 2011 from shops close to Al Ghubaiba bus station. “Every time I pay by card, when I don’t have cash on me, I’ve been charged extra. When I complain, they say it’s company policy and they are just covering the processing fee. I’ve even paid Dh2 extra at petrol stations but I think now they’ve stopped doing that.”
A 37-year-old Pakistani expatriate, who did not want to be named, added: “I’ve also paid Dh2 extra at a petrol pump in Al Nahda. They even had a sign saying they charge extra. I didn’t know it was illegal since they were taking the money so brazenly,” he added.
British expat M.O., 40, said he recently paid Dh84 extra as a 2 per cent “processing fee” on his Dh4,200 card payment to his daughter’s nursery. “I only found out it was illegal when I read about it in the news on Sunday. I can’t believe they are still getting away with it. I made the payment three weeks ago,” he added.
‘Processing fee’
Retailers who impose the extra charges claim they are covering a “bank processing fee” that they have to pay their bank whenever a customer uses a credit card. However, passing on the charge to the customer is illegal, UAE authorities have repeatedly said.
Among those banning the practice are the economic development departments in Dubai and Abu Dhabi, the federal Ministry of Economy, its Consumer Protection Department, and the SCCP, which coordinates with local authorities in implementing such rules.
The Consumer Protection Division in Dubai clearly advises customers: “When purchasing products you should be given the same price irrespective of your paying by cash or credit card.”
Major networks such as Visa and MasterCard, which process payments between banks and merchants for purchases made with the cards, generally prohibit such “surcharges” or “swipe fees” as well.
Legal action
Sunday’s statement said the department has issued a circular to all businesses across Abu Dhabi warning them against collecting any extra fees when consumers opt to pay through credit cards.
The circular is a reinforcement of the recent resolution by the SCCP banning any collection of extra fees from consumers when they pay via credit card for goods or services in both the business and government sectors.
Businesses that violate the law and collect extra fees on credit card payments will be subject to legal actions against them, a department spokesman said, adding that the department will be strict in dealing with such violations.
Grievances
The ministry took the decision after the national Supreme Committee for Consumer Protection (SCCP), which it chairs, received numerous grievances from shoppers in various emirates, complaining that they are charged extra fees, that amount to five per cent of the purchase value, when they pay by credit card.
Despite the threat of fines, some shops continue to brazenly impose extra fees on customers using their credit card. The “company policy” is sometimes displayed in the shop.
Even some petrol pumps used to display a sign of a Dh2 charge for credit card use, customers said, but the practice seems to have abated recently, following the warnings.
When I pay extra by card, the bill only shows the total amount paid. There is no breakdown of any surcharge. So how will I prove my rights have been violated?” Filipino, 31 I’ve also paid Dh2 extra at a petrol pump. They had a sign saying they charge extra. I didn’t know it was illegal since they were taking the money so brazenly.” Pakistani, 37 I only found out it was illegal when I read about it in the news on Sunday. I can’t believe they are still getting away with it. I made the payment three weeks ago.” Briton, 40