OFT investigating card surcharges

A victory has been scored for the Labour Party and consumer groups, as the Office of Fair Trading promised to investigate the surcharges levied by travel companies on credit and debit card users.

The OFT estimates that these companies made an extra £300 million from these surcharges in 2009, and will also look into the phenomenon of 'drip pricing,', when extra payments are added to the total price after the purchase has alrady reached an advanced stage.

Which? argues that the actual cost of processing a debit card is no more than 20p, while it is no more than 2 percent for credit cards.

Cavendish Elithorn, of the OFT's goods and consumer group, said: 'You can't buy online with cash and people are frustrated about being asked to pay for paying. Consumers find it harder to shop around and find the best deal if they have to invest time and effort in discovering surcharges. This also weakens competition between retailers which is bad news for the UK economy.

'Many traders already meet the minimum standards we expect under the law and we have secured a clear commitment to change from others. However, we will take enforcement action against any businesses that do not respond to today's announcement and instead continue to use misleading surcharging practices.

'We believe there is also a strong case for a change in the law so that the cost of using a debit card – the almost universal payment method for today's online consumers – is always included within the headline price.'

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