Consumer watchdog the ACCC has launched legal action against CLA Trading Pty Ltd, the Australian arm of global rental business Europcar, over alleged excessive credit and debit card payment surcharges that broke consumer law.
The Australian Consumer and Competition Commission alleges Europcar customers who used Visa or MasterCard credit cards in July and August 2017 were charged fees in excess of the fees charges by banks to process the payments.
It’s the first time the ACCC has launched Federal Court action in the wake of new laws against excessive card surcharges introduced progressively from September 2016. The surcharge law meant that a businesses can only pass on to customers what it costs them to process a payment.
The case involves 96 of the 126 Europcar outlets in Australia, specifically owned and operated by Europcar and not its franchisee offices.
The ACCC also alleges Europcar charged customers excessive payment surcharges when they used Visa or MasterCard debit cards between July and 5 November 2017, despite the fact that the company was notified by its bank in July 2017 of the actual cost.
The consumer watchdog alleges Europcar charged surcharges of up to 1.43%, and while the rates varied over time and by the type of card, the overcharged ranged between 0.18 percentage points to as high as 0.65 percentage points during that period.
ACCC Chair Rod Sims said Europcar’s alleged conduct was “particularly concerning” because it knew the true cost from at least July 2017.
“Businesses must not charge customers more than it costs them to process a card payment,” he said.
“The ACCC is paying close attention to those businesses who seek to overcharge customers making payments by credit or debit cards.”
If the ACCC wins the case, it’s not yet known whether consumers who paid for Europcar rentals by credit card during the periods cited in the legal action will be entitled to refunds on the surcharge.
The latest Federal Court action against Europcar Australia comes two years after the company was taken to court over its unfair clauses in its rental agreement. The company was penalised $100,000 for making false or misleading representations over liability for vehicle damage.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.