Submission: Credit card surcharges and non-transparent transaction fees
Consumer Action Law has made a submission to the Commonwealth Consumer Affairs Advisory Council’s study into Credit Card Surcharges and Non-Transparent Transaction Fees.
We believe the key problems in this area are that:
- merchants are failing to disclose surcharges upfront or include card surcharges in headline prices, even where paying by card is the only option, or only practical option. Although this may breach single pricing requirements under section 48 of the Australian Consumer Law, this law does not appear to be enforced in this situation;
- merchants charge surcharges that are significantly higher than what appears reasonable. In particular this occurs in the airline, ticketing and taxi industry. It is not clear if there is any real incentive for card schemes to enforce the recent RBA rule that surcharges should not exceed the reasonable cost of accepting card payments; and
- there is no simple, accessible mechanism for consumers to complain about unreasonable surcharges and no clear mandate for either the ACCC or ASIC to police poor surcharging practice.
This causes the following types of harm to consumers:
- it is harder for consumers to compare prices between merchants, which weakens competition;
- consumers spend more time and money searching the market than is efficient;
- consumers being mislead about the actual prices of products and being frustrated at being asked to ‘pay for paying’ where surcharges are inescapable.
To read our full submission click: Credit card surcharges and non-transparent transaction fees.