Britain brings in ban on 'rip-off' surcharges imposed on credit card spending

LONDON (AFP) - A ban on "rip-off" surcharges imposed on credit card spending came into force in Britain on Saturday, meaning traders must ensure that the extra fees reflect genuine processing costs.

The ban on excessive charges for paying for goods and services such as flights and entertainment tickets by credit or debit card was welcomed by campaigners.

The Office of Fair Trading government department estimated that consumers in Britain spent around £300 million (S$566 million) on payment surcharges in the airline sector alone.

The crackdown also aims to make payments more transparent.

"The practice of excessive payment surcharges has been ripping off consumers for far too long," said consumer minister Jo Swinson.

"They are fed up of thinking they will be paying a certain price for goods only to find out towards the end of the process that the final price is much higher."

She said the ban would prevent retailers from cashing in by charging add-on fees that do not reflect the true cost of processing a payment.

"Consumers will be less likely to get nasty surprises as they will have a clearer and more transparent breakdown of what they are paying for," she said.

Richard Lloyd, executive director of consumer campaigning publishers Which?, said they welcomed the ban.

However, "for it to be effective there must be a tough enforcement regime and companies must play fair and not pass costs on to customers in other ways," he warned.

"We will be monitoring the ban closely."

Join ST's Telegram channel and get the latest breaking news delivered to you.