Plans to halt excessive surcharges

Consumers could see an end to excessive surcharges for paying by debit or credit card under new Government plans.

Companies face a ban on making a profit by charging extra fees for card payments above the cost they incur in processing the transaction.

The proposals, which go out for consultation on Monday, will mean that firms which treat customers fairly are not disadvantaged by rivals who use less transparent practices to "lure" people in, the Department for Business, Innovation and Skills said.

Consumer Affairs Minister Norman Lamb said: "It can often be frustrating when purchasing a product or a service online, to find out only towards the end of the transaction that the final price is much higher due to things like payment surcharges.

"These proposals will stop companies from adding on these excessive charges, and allow consumers to see a clearer and more transparent breakdown of what they are paying for."

Consumer group Which?, which has campaigned for excessive credit and debit card surcharges to be outlawed, said the consultation was "well overdue" but a "step in the right direction".

Richard Lloyd, executive director of Which? said: "The Government must ensure that all businesses only charge the genuine cost they incur for processing the payment and that they are upfront, and make this clear to consumers.

"We also want to see a robust enforcement regime in place to make sure firms are held to account if they flout the ban. The Government must now act quickly to meet its promise to ban these excessive charges by the end of the year."

Some 84% of people believe consumers should not be charged extra fees for paying by credit or debit card, and 77% think these surcharges are unfair, a new Which? poll found.

Twelve airlines, including easyJet and Ryanair, agreed in July to include debit card surcharges in the headline ticket price rather than surprise customers at the end of the booking process.