Passengers still being charged for debit card payments despite OFT warnings, consumer group says

In June the Office of Fair Trading (OFT) called on the Government to change the law to prohibit surcharging for all debit cards. It said that, before any change could be enacted, traders should "stop charging for paying with any debit card" in order "to make headline prices truly meaningful and comparable" and that those that did not change practices risked enforcement action under UK consumer protection laws.

Which? has now claimed that airlines are still charging extra for making payments and that it has collectively cost consumers "an estimated £18 million in airline debit card surcharges" since the OFT published its super-complaint investigation response on 28 June.

The group said that "unbelievably" two airlines, Lufthansa and Swiss, had announced in August that they will charge a £4.50 fee on all payment card bookings from 2 November.

The Government should make a "simple amendment" to the Payment Services Regulations in order to prohibit the practice, Which? said.

The Regulations includes rules relating to the liability of payment providers for unauthorised payment transactions, but also contain a specific section that states that the rules do no apply in relation to consumer credit agreements. Which? said this should be changed.

"The simple amendment can control surcharges by only allowing them to be levied if they comply with OFT guidelines, and these can ensure that no charges are levied for debit cards (or the principal payment method accepted if not debit cards) and require payment surcharges must be made clear to consumers before they proceed with a purchase," a Which? statement sent to Out-Law.com said.

The Consumer Protection from Unfair Trading Regulations prohibit unfair, misleading or aggressive selling practices. The OFT has the power to initiate legal proceedings against companies in breach of the regulations.

The OFT had commented on debit charges after conducting a 90-day investigation into misleading price practices. The OFT said at the time that it had "found considerable evidence" that companies in the "passenger transport sector" used 'drip pricing' practices to add charges on to online booking fees.

Drip pricing involves the addition of charges as a buying or booking progresses. Under drip pricing, additional charges such as taxes, payment card charges or other extras mean that the price paid by the consumer can be far higher than the original quoted price.

The OFT said that UK consumers spent £300 million on payment surcharges when booking with airlines during 2009.

The OFT had conducted its investigation following a 'super-complaint' from consumer charity Which? Under the Enterprise Act super-complaints can be made to the OFT by a designated consumer body when it thinks that "a feature, or combination of features, of a UK market is, or appears to be, significantly harming the interests of consumers". Within 90 days the OFT must publish a response detailing if and what course of action it plans to take and why.

Richard Lloyd, Which? executive director said that the Government should "put a stop" to the surcharges and he urged people to lobby Financial Secretary Mark Hoban in order to effect a change in the law.

"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 on-line booking process," Lloyd said.

"Thousands of people have complained to Which? that these hidden card fees are unfair. The Government must act so that consumers can easily compare the cost of their flights,” Lloyd said.