1% charge for paying by DEBIT card!

slimmillipede

I just rang up to pay the balance on a holiday we have booked through florida4less.co.uk which is part of the co-op travel. I wanted to pay with a debit card because I know they charge a percentage surcharge for credit card payments (we paid the deposit by credit card).

I was stunned to find out that they would charge a 1% fee for payment by debit card. When I expressed my surprise I was told that they were just passing on the bank's charges, which I don't believe at all, the bank charge for a debit card payment should be less than 30p. Oddly their credit card charge was only 2% which isn't too bad really.

I asked if there was a way to avoid the charge and was told I could mail in a cheque, which is just bizarre given how much banks charge businesses for cheque processing. They would even allow me extra time to mail the cheque (the amount was theoretically due today).

Then, without prompting, the chap on the phone told me that he would ask his manager about it, a few minutes later he came back and told me that they had decided to waive the charge.

Has anybody else come across such a charge? I have never heard of it before though the chap on the phone said that most travel agents charge it (which I think is probably as accurate as the assertion that the charge was being made by the bank).

mcfisco

Has anybody else come across such a charge?

You've not flown with Ryanair have you?

giraffe69

I've also had a travel company try to levy a charge on a debit card who would accept a cheque. When I used phrases like medieval, cheque costs and delay they also agreed "on this one occasion" to waive the charge. Absolutely remarkable in this day and age that firms would rather be paid by cheque than debit card.

Janeyjaz

Booked my hotel through them and they have charged me for paying by visa debit - nearly £9 for paying £708

endofspam

Add me to the list!!!!
This appears to be in contradiction to OFT advice!

MUM40

me too, paid 1% with online travel agent.

should we complain to OFT and see what happens?

mgdavid

why not simply do an online bank transfer?

Starbrite

outgoing.co.uk also put a charge on for using a debit card, First time I've ever come across such a thing on a debit card. I was informed if I paid by Visa Electron there would be no charge

Who has a Visa Electron card????

Sam_Bee

Believe it or not... well, believe it as it's true..

Some Merchant Accounts are charging travel companies the same % for using a debit as a credit card, so I have no doubt they are telling the truth and passing on the charge.

I only noticed this for the first time about 11 months ago, and i'm sure it's because travel is seen as 'high risk' and a way of protecting themselves against companies going bust / people reclaiming from debit cards (which you can on certain cards). Remember if you can reclaim from your card, the CAA will direct you to do that, and only pay out if you cannot recover from that method.

I suspect unfortunately we will be seeing it more and more. However, I am surprised that the charge is being passed on as still the majority of companies do not get charged a % for debit card transactions, so they are uncompetitive. Cheques therefore are a lower cost to process however archaic (I am sure they would take bank transfers?).

I am extremely dubious that Ryanair get charged a % by their merchant acquirer though for debit card. They are so profitable and cash rich they probably have one of the best rates for any airline in Europe.

BTW, I speak as someone who negotiates merchant accounts for travel companies. Therefore if you are complaining to the OFT that they are profiteering rather than passing on charges, there is a good chance you will be wrong.

apt

mgdavid wrote: »

why not simply do an online bank transfer?

If you do that you've got no protection if the company goes bust. Paying with a debit card you can claim a chargeback.

Sam_Bee

apt wrote: »

If you do that you've got no protection if the company goes bust. Paying with a debit card you can claim a chargeback.

This is incorrect advice for 2 reasons.

1) If you pay by cash, cheque, bank transfer or any method for an ATOL bonded holiday, you are covered by the CAA (Civil Aviation Holiday). Florida4less.co.uk appear to have an ATOL (you can / should always double check on the CAA website), so if it is a flight + hotel you can pay by any method and you are covered.
2) Chargeback's are not enshrined by law, so do not unilaterally offer protection (unlike Section 75 protection on credit cards) - although i'd urge you to do more research on this - i'm sure this site has something.