Airline passengers hit by sky-high fees for paying by plastic

HOLIDAYMAKERS are paying more than £265,000 per day in debit card surcharges to airlines, despite a government ruling that they should be banned, the consumer champion Which? has warned.

The pressure group submitted a “super-complaint” – a complaint about market features that may be significantly harming consumers’ interests – to the Office of Fair Trading in March, asking the regulator to investigate the “excessive” credit and debit card surcharges imposed on flight ticket purchases.

In June, the OFT proposed that charges for paying by debit card should be banned, and pointed out that the Treasury could end the practice by making a simple amendment to existing payment services regulations.

The regulator said that last year the passengers of just ten major airlines in the UK spent around £300 million in surcharges, with those who book tickets having to click through as many as six pages of an online booking system before learning the overall cost.

However, no action has been taken since on the so-called “drip-charging” practice, and Which? yesterday increased pressure on the government by criticising the lack of action as consumers continue to be hit by the card fees.

The watchdog said it was “unbelievable” that two airlines – Swiss and Lufthansa – have announced plans to start charging customers £4.50 for using debit and credit cards since the OFT response.

It also estimated that, since 28 June, travellers have collectively paid in the region of £18m in airline debit card surcharges.

Richard Lloyd, executive director of Which?, said the charges could be brought to an end with only a “minor” legislative amendment.

He said: “With most airlines yet to drop these card surcharges and some introducing new fees, it’s time for the government to put a stop to this. A minor change to the law is all it would take to ban the charges on debit cards that you only find out about at the end of a lengthy online booking process.”

A Treasury spokesman said it was continuing to formulate its response to the OFT’s recommendations.

He said: “The government is committed to working with the OFT to stop retailers, including airlines, imposing hidden surcharges on customers who pay by card. We are considering the OFT’s recommendations and will respond in due course.”

The £265,000 figure quoted by Which? is based on passenger uplift figures from the Civil Aviation Authority. In addition to the planned introduction of charges by Swiss and Lufthansa, which will come into effect from 2 November, nine of the 28 UK-based airlines charge customers for using debit or Electron cards.

The largest surcharge is imposed on EasyJet passengers, who must pay £8 per transaction, while other airlines who charge include Thomas Cook and Thomson.

During its investigation, Which? found that a family of four booking a return flight with Ryanair would be charged £40 when paying by debit or credit card.

It said the actual cost to the retailer for processing a debit card transaction is 20p, and no more than 2 per cent of the transaction value on credit cards.