MSE News: Budget airlines get kicking over card surcharges

2sides2everystory

oakhouse13 wrote: »

The OFT does not have the power to outlaw things, as I understand it.

They haven't. They have just reminded the miscreants that what has been happening is already outlawed and if it continues, OFT will act to see the law enforced.

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

Dunno. Is it important?

PZH

The_Groat_Counter wrote: »

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

Well, I must be missing something still..

The_Groat_Counter wrote: »

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.

To me, this stands as I state - all they need to do at the moment is to change their websites immediately to make sure ALL charges are displayed up front and clearly visible. However, to abolish the surcharges completely needs a change in law which will take some time.

From the link you supplied...

We believe that making the headline price more meaningful for comparisons and ensuring information on surcharges is provided in a clear and timely manner would help consumers avoid surcharges and encourage competition between retailers, driving down the price of genuinely optional surcharges.

From the Questions and Answers section of the link you supplied...

Why are the OFT not forcing traders to reduce payment surcharges?

We believe that free markets based on properly informed consumers able to make realistic choices generally deliver the best outcome for consumers. We are looking for businesses to present prices to consumers in a meaningful and timely manner which facilitates their ability to compare full offer prices across traders, strengthening competition between traders. Making the headline price achievable for the majority of consumers and making sure other payment surcharges are clear and transparent we believe will put pressure on traders to reduce these charges to the competitive level over time.

Rafter

At last. The cost of immediate payment, whether that is by debit card or in cash should not carry a premium.

Be interesting to see how quickly the airlines respond but I really hope at some point one of the biggest budget airlines are landed with a 10% of turnover anti-competitive fine for treating consumers like dirt.

Why anyone would risk flying on one of their planes given the complete disregard they show towards their customers is beyond me.

R

oakhouse13

"Dunno. Is it important?"

You can do better than that.

Rafter, why don't you just not buy off budget airlines?

geordieracer

The_Groat_Counter wrote: »

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):

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

I disagree with you completely. From what you quoted from the draft I shall bold some pertinent points

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.

They have only recommended that the government introduces these measures - they have not said that these will be implemented, so it could be along old time until these are in place and whose to say that they will get put in place in this term of office.


They 'Seek to improve'. Again this is not a direct action, this is what they would like to happen.


They will 'consider enforcement action' if retailers do not sign up and agree to the voluntary code of practice.


All of the above is mild speculation of what they want to see happen, not what is happening nor will for a very long time. To me words like the above are pretty meaningless and does not make me think they have 'had a kicking' at all.

To it be a kicking they could have said - you do this now, or we will force you to do it through penalties and everything else that would look like a kicking.

The_Groat_Counter

phoodless - yes, on taking a quick second look I think your analysis is probably spot on.

The OFT seem to be keen on pushing the idea that they'll now be on the look out for miscreant merchants, but this is more about making sure everything is presented transparently - whilst they might want to suggest to merchants that they avoid debit card surcharges, and put a bit of pressure on them by saying that the law will (hopefully) be changed, as you say can't conjure a new law to actually ban debit card surcharges out of thin air.

Governments always have busy legislative timetables, but as this would be a popular change in the law I imagine the government will embrace the need for a new law and get things rolling sooner rather than later.

Still, here's betting that Ryanair don't change until they absolutely have to!

The_Groat_Counter

geordieracer wrote: »

[...]
To it be a kicking they could have said - you do this now, or we will force you to do it through penalties and everything else that would look like a kicking.

Hi geordieracer - first off see my reply above addressing phoodless's points - basically yes, on taking a second look the OFT isn't going to actually take action to stop companies making these surcharges, because they don't (currently) have the power to do so.

So in terms of your comment above, the OFT cannot say "you do this now, or we will force you to do it" in terms of actually banning debit card surcharges - what they can do is put pressure on companies to ensure that they are as transparent as can be about such surcharges - and it seems that's what the OFT are saying they'll do.

The particular phrases you've picked up on are bureaucrat-ese - a recommendation from the OFT to the government to change the law is a powerful thing, and their statement that they'll seek to improve matters with merchants in terms of transparency and will consider enforcement action if matters don't improve are not just hollow words. What the OFT cannot say is that they're going to bring through a change in the law themselves - that's something for the government to initiate.

But yes, I have changed my take on this compared to my earlier comment I made in response to you - I wouldn't make that comment in post number 6 now that I've thought it through a bit more!

geordieracer

No thats all cool. Bureaucratic wording or not Its all toothless and they can only do so much but cannot punish therefore there is no kicking.

Though this isnt the first time ive read an MSE led story on here that really isnt quite what the title says. Maybe get better reporters on board?

TighterThanTwoCoatsOfPain

hmmmmm of all the things that upset me, the charging for things like this really dont.

Ask yourself a serious question..... Is there anyone in the world who honestly expects to fly from London to Dublin for £0.99??

I know some will say its about how they do it, but at the end of the day no one is making anyone pay anything they dont know they're paying even if its not included in the "Headline" rate, and if you dont like the price you see at the end of the booking process then you hit cancel and look elsewhere.

Meh - On this website of all places I have no doubt i'm the minority but "real" rip offs where you dont get what you're paying for is where the real issues are.

Just my 2p....

terryw

TighterThanTwoCoatsOfPain wrote: »

Ask yourself a serious question..... Is there anyone in the world who honestly expects to fly from London to Dublin for £0.99??

Yep, if that is what the advertised price is! Been to Madrid, Posnan and Riga for 1 penny in budget airline sales with no extra charges.

Having said that, the current charging method of the budget airlines is nonsensical and really annoys potential customers.

If my pub advertises beer for 1p then that is what I expect to pay. I don't expect "glass surcharge" and "seat surcharge" and "giving change surcharge" to bring the price up to £3!