Consumer rights group CHOICE has launched a name-and-shame web tool that lists five Australian companies that it says are ripping consumers off through excessive credit card surcharges.
And they’ve made it fun – with angry little avatars on the website monitoring the change.
Credit card company Visa today announced that it would restrict surcharges to as little as 1% in response to the Reserve Bank of Australia’s reforms. .
But there is no agency charged with policing the new rules, and it is up to credit card companies themselves to stop merchants slapping on excessive charges.
In response CHOICE has launched a timer tool on its website, which is ticking away from 18 March in an attempt to put the “spotlight on the worst surcharging offenders.”
It has named Qantas, Jetstar, Virgin Australia, Tiger Airways and Cabcharge, posting the companies names alongside red, cartoon ‘angry faces’.
CHOICE said that while the actual costs of processing credit cards varies between retailers and across different card types, the average merchant service fee for Mastercard and Visa is estimated at 0.86%.
“Today’s new rules limit credit card surcharges to the ‘reasonable costs’ of processing the transaction, and most of that is the merchant service fee,” said CHOICE head of campaigns Matt Levey
“While these fees vary, they are nowhere near the likes of Cabcharge, with their shonky 10% fee, or Jetstar, with their $17 slug for a return flight,” he said.
Levy said that all five companies named by CHOICE charge “outrageous” credit card fees.
While some companies explain their surcharges as additional service fees, he also said that if it operates as a surcharge then it should be considered as one under the new rules.
Virgin Australia spokesperson Jacqui Abbott told Business Insider Australia that the company “will continue to work with credit card merchants to review our options,” but was unable to confirm whether the airline would change the amount it currently charges Visa users as a result of Visa’s announcement that it will cap surcharges at 1%.
Abbott also said that the company recently reviewed its fee structure, and moved to a model that charges per booking instead of per sector, “meaning customers pay less for return (or multi-sector) flights on that booking.”
“In recent months, we have also significantly increased the options available for customers to make payments without incurring a booking and service fee.
“To avoid incurring a Booking and Service fee, other forms of payment are available including POLi, a gift voucher, flight credits or payment by cash through a travel agent,” she said.
Virgin Australia’s booking and service fee, Abbott said, include a range of costs associated with processing bookings, including the merchant fees of credit card companies as well as payment processing and administration costs, “and we don’t disclosure or split this out.”
Tiger Airways also said that it offered free payment methods and was continuing to look at new payment options.
“Tiger Airways has always and will always ensure that all of its fees comply with all relevant regulatory requirements,” said spokesperson Vanessa Regan.
Regan said that Tiger Airways’ free payment method was granted by waiving a booking fee when a customer purchases flights with a MasterCard debit card issued by an Australian financial institution, but also clarified that the airline “doesn’t have credit card surcharges, we have a booking fee.”
“We have taken further steps to ensure our booking fees are clearly outlined during the booking process to ensure full transparency to our customers. At present we have a free payment method available for passengers and are continuing to look at other payment options for the future,” she said.
Qantas (which owns Jetstar) and Cabcharge were also contacted for comment.
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