Firms find ways to evade rules as card charges ‘rip-off ’ made illegal

A BAN on “rip-off” surcharges levied by companies on customers who pay with debit or credit cards is coming into effect.

Companies are no longer allowed to charge customers up to 20 per cent more for purchases such as flights just for paying with a credit card under the new rules that take effect on January 13. However, the ban comes amid concerns that consumers may see the cost of goods and services creep up, or additional fees added by retailers, as a result of the changes.

Takeaway firm Just East has already drawn criticism for introducing a 50p “service charge” on all orders after previously levying a 50p surcharge on debit and credit card payments.

Consumer groups have welcomed the ban, but are urging shoppers to report any retailers they believe are flouting the new rules.

The surcharges have been commonly added by businesses ranging from takeaway apps to global airlines on customers who pay by card or use other services such as PayPal.

The rules will also tackle surcharging by local councils and government agencies such as the DVLA. Businesses usually claim the surcharge is to cover the cost of processing a card payment.

It is estimated that surcharging cost Britons £166m in 2015.

John Glen, Economic Secretary to the Treasury, said: “It’s completely unfair for someone to be hit by a hidden fee just before they are about to make a purchase, so by scrapping these rip-off charges we are helping to give power back to the consumer.

“As we build a fairer society, this added transparency ensures buyers can make informed choices about how they spend their hard-earned money.”