MSE News: Budget airlines get kicking over card surcharges

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"The OFT has today responded to the Which? super-complaint about excessive charges for paying by credit and debit card"

Read the full story:
Budget airlines get kicking over card surcharges

geordieracer

I wouldnt say they 'got a kicking' all that happened was they said it was wrong and they would look into asking the government to ban the charges. Unless i missed a bit

jbtapscott

It's not just the inclusion of charges for paying by Debit / Credit card that need to be stated upfront - what about check-in?. You have to check in, so why is the charge for this not included in the baseline price - these is no way to avoid the charge so it should not be an add-on at the end.

PZH

geordieracer wrote: »

... all that happened was they said it was wrong and they would look into asking the government to ban the charges.

Agreed

They have been ordered to make their charges clearer on the first page instead of having to wait until the checkout pages when the charges are added on.

So basically, the charges remain, but they have to be shown sooner better.

The_Groat_Counter

geordieracer wrote: »

I wouldnt say they 'got a kicking' all that happened was they said it was wrong and they would look into asking the government to ban the charges. Unless i missed a bit

You have missed a bit, as more than that has happened (though it is a bit confusing) - whilst the longer term aim is to get the government to change the law (which takes time as it has to go through Parliament etc), in the shorter term the OFT are looking at using some existing regulations to get retailers in the transport sector to play along.

From the executive summary of the full OFT response to the super-complaint (part of paragraph 1.23, pages 9 & 10):

1.23 - In order to remove the detriment caused by drip pricing of what are, in effect, compulsory surcharges, the OFT:

• Recommends that the Government introduces measures to prohibit retailers from imposing surcharges for payments made by debit card. [...]

• In the short-term, seeks to improve the transparency and overall presentation of payment surcharges in the transport sectors, through action to ensure compliance with the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). Some retailers have already indicated that they are willing to change their practices in line with the OFT's recommendations and we will continue to work with these retailers to ensure the changes are made. For those retailers who are unwilling to make voluntary changes, or where commitments are not implemented within a reasonable timeframe, we will consider enforcement action. In due course we will also consider whether further enforcement action in other sectors is necessary.

More on this OFT webpage, including a link to download the full 74 page response document:
www.oft.gov.uk/OFTwork/markets-work/super-complaints/which

The_Groat_Counter

phoodless wrote: »

So basically, the charges remain, but they have to be shown sooner better.

Not so - the OFT are looking at using existing powers to stop debit card surcharges - see my reply above.

2sides2everystory

It was indeed a kicking!

geordieracer wrote: »

I wouldnt say they 'got a kicking' all that happened was they said it was wrong and they would look into asking the government to ban the charges. Unless i missed a bit

Yep as The Groat Counter's useful links show, you missed a whole bit. OFT has basically ruled that it already considers certain public transport sector miscreants in breach of existing CPRs. I think they might mean outfits like Ryanair who are still playing with different (two speed) websites for no other reason that I can see other than to continue to goad certain European authorities.

Check out the difference between the price presentation when starting the same booking between ryanair.com (UK) and ryanair.com (DK) and ryanair.com (ES)

oakhouse13

Isn't this just marketing? The price will not go down to the consumer. The trader will just have to display the real price instead of advertising that a flight costs £0.99 and then by the time you complete the booking charging a lot more by adding made up elements like debit card charges.

It's similar to free postage & packing when you buy online. Consumers want free postage & packing. This does not mean postage & packing is free. It just means that traders include the cost of p&p in the advertised sale price and say free p&p.

2sides2everystory

oakhouse13 wrote: »

Isn't this just marketing?...

Nope, it is just outlawed marketing.

oakhouse13

The OFT does not have the power to outlaw things, as I understand it. The OFT can have directors of companies sign undertakings to stop practices but if that practice continues it has to take the case to court for an authoritative ruling.

I was thinking about the Flightchecker on this website and had a look at it just now. I don't think it includes credit/debit card charges in the prices it advertises.

The most interesting thing about the OFT's statement was that it notes how when consumers aren't paying cash companies can be very deceptive about prices especially online.

Here's a question for you.

http://www.amazon.co.uk/Diesel-Pullover-sweater-K-RABBI-SIZE/dp/B004EFRM9Y/ref=sr_1_4?s=outlet&ie=UTF8&qid=1309279743&sr=1-4

Why is this price displayed as £79.95 - £7,995.00 Sale: £49.00

It's very expensive paying for bodies like Which? and the OFT when if consumers would just ignore obviously fake bait pricing then companies would stop advertising them.

Lizzie75

I saw a report on Watchdog a while ago....companies get charged a percentage of the overall cost if a customer pays by credit card....for debit card though, it's literally pennies and it's revolting that 'budget' airlines have been able to charge something like £8 or £9 for something that costs them a few pence. So from what I can work out, the Government may say that this practice is no longer legal. Mind you....if they do...the likes of Ryanair etc will probably only put their base prices up soo they don't feel any shortfall in income! Me? A cynic?