Airlines facing court action on last-minute card charges

Published on Tuesday 28 June 2011 15:35

Airlines and travel companies have been threatened with legal action if they continue to impose last-minute fees on customers for paying by card.

Air, rail and ferry customers often have to click through several pages online before a payment charge is added, the Office for Fair Trading (OFT) said yesterday.

The OFT will press the government to ban surcharges for all debit cards and wants credit card charges to be factored into the headline price.

However, some airlines such as Ryanair said all "optional" fees are avoidable and the OFT findings did not affect the way in which it ran its business.

The watchdog launched a 90-day investigation in March after a super-complaint from independent consumer body Which? highlighted consumer anger about the increasingly widespread use of surcharges.

The OFT singled out the airline sector - where UK customers spent 300 million on surcharges in 2009 - for frequently adding charges for card transactions at the end of a drawn-out purchase process.

The OFT refused to name and shame the worst offenders but pointed out that easyJet charges 8 per debit or credit card transaction after customers pass through eight web pages, Ryanair adds 6 per journey after four pages and Trainline adds 3.50 for a credit card transaction after seven pages.

Surcharges for using a credit or debit card are potentially misleading to consumers when it comes as a "surprise", the OFT said.

The watchdog is discussing surcharging practices with a number of passenger travel companies to secure compliance with consumer protection regulations and has threatened to take enforcement action if necessary.

Cavendish Elithorn, senior director of the OFT's goods and consumer group, said: "We will take enforcement action against any businesses that do not respond to today's announcement and instead continue to use misleading surcharging practices."

The OFT said that, in order to provide certainty for consumers and businesses in the longer term, it is asking the government to change the law to prohibit surcharging for all debit cards.

Responding to the OFT's findings, Peter Vicary-Smith, chief executive of Which?, said: "We want to see the measures recommended by the OFT put in place as quickly as possible and finally put an end to the practice of card surcharging."

He added: "Industry shouldn't drag its feet over this." Which? said lettings agent Foxtons charged a customer 25 to pay a 5,000 deposit to rent a flat.In response to the OFT's findings, Ryanair said it does not "impose" any debit or credit card transaction fees, as customers can use a MasterCard Prepaid without additional fees.

It said: "Ryanair is one of the only airlines to provide access to fees information directly from its home page, where it is clearly explained that Ryanair's avoidable administration fee may be charged to defray the substantial costs associated with our booking system."

Conrad Clifford, chief executive of Monarch Airlines, said he welcomed the OFT decision.

He added: "There is no justification for charging excessive fees on credit and debit cards. We had already taken the decision to cancel debit card fees some time ago."SPARE PAGE