Credit card transaction fees

paulgolding

Hi, I'm purchasing a new kitchen and would like to pay by credit card but am being told there is a 2% transaction fee to do so. If I only pay the £1,000 deposit due by credit card and the remainder when due by bank transfer am I covered in full for the kitchen on the credit card?

eskbanker

You can achieve section 75 coverage on the entire transaction value (assuming item value > £100) by paying any of it by credit card, even a penny in theory.

However, it hasn't been lawful for a couple of years now to levy a surcharge for paying by personal credit card, so if you're being asked to do so then you might wish to consider what other dodgy practices the company concerned may be involved with....

jet01

As per the above post it is a criminal offence to charge any additional fee for card transactions or give a discount for other methods of payment as that essentially amounts to the same thing. I would suggest pointing this out to the company concerned and informing them that if they persist with such practices you will take your business, for a pretty expensive purchase, elsewhere and inform your local trading standards department of their business practices. 

It amazes me that quite sizeable companies still try to get away with flouting this legislation (don’t know if this is a big or small outfit the OP is dealing with). I remember seeing on the local news just before the lockdown Hull University had been prosecuted and fined for giving students a “discount” for paying for accommodation by cash or debit card. This was of course in reality a charge for paying by credit card and so illegal. 

paulgolding

Thanks Folks  The answer I hoped for!

bonkersbonkers1

paulgolding said:

Hi, I'm purchasing a new kitchen and would like to pay by credit card but am being told there is a 2% transaction fee to do so. If I only pay the £1,000 deposit due by credit card and the remainder when due by bank transfer am I covered in full for the kitchen on the credit card?

Just one proviso - if you were trying to pay with a Business credit card then they are allowed to charge a fee.
In all of the posts here so far you have not confirmed if it was a personal or Business card.

Sandtree

Also the above naturally assumes the company you are paying is in the UK... I know with one of the kitchen companies we were looking at you paid the German company directly who in turn paid a commission to their UK Agent and so rules on credit card surcharges etc would be bound by their local laws not the UK

blue.peter

To expand a bit on information already given, if you want to quote the relevant legislation, it's regulation 6A of the Consumer Rights (Payment Surcharges) Regulations 2012 (Statutory Instrument 2012/3110). That regulation was added by paragraph 12 of Schedule 8 to the Payment Services Regulations 2017 (SI 2017/752) with effect from 13 January 2018. If you want to print copies off, you'll need both 2012/3110 and  2017/752, because the former hasn't been updated to incorporate the effects of the latter. If you open the More Resources link on the left of the text, you can download PDFs of both.

I note that someone said above that charging these fees is a criminal offence. I haven't checked the detail, but I suspect that this might not be correct: I find it more likely that it's a civil offence (different enforcement and potential penalties). I really can't, for example, see the police getting involved in a situation like this.

eskbanker

Sandtree said:

Also the above naturally assumes the company you are paying is in the UK... I know with one of the kitchen companies we were looking at you paid the German company directly who in turn paid a commission to their UK Agent and so rules on credit card surcharges etc would be bound by their local laws not the UK

The surcharge prohibition should be EU-wide, as part of PSD2 implementation, but, as ever, the countries work at different paces!  However, according to https://www.hoganlovellspayments.com/PSD2, Germany has implemented this....

MinuteNoodles

paulgolding said:

Hi, I'm purchasing a new kitchen and would like to pay by credit card but am being told there is a 2% transaction fee to do so. If I only pay the £1,000 deposit due by credit card and the remainder when due by bank transfer am I covered in full for the kitchen on the credit card?

Transaction fees for card payments have been illegal for some time. As long as at least £1 is on the card you're covered.

eskbanker

MinuteNoodles said:

paulgolding said:

Hi, I'm purchasing a new kitchen and would like to pay by credit card but am being told there is a 2% transaction fee to do so. If I only pay the £1,000 deposit due by credit card and the remainder when due by bank transfer am I covered in full for the kitchen on the credit card?

Transaction fees for card payments have been illegal for some time. As long as at least £1 is on the card you're covered.

If only a slightly more accurate version of that answer had been supplied within five minutes of OP posting a couple of days ago....

Sandtree

eskbanker said:
The surcharge prohibition should be EU-wide, as part of PSD2 implementation, but, as ever, the countries work at different paces!  However, according to https://www.hoganlovellspayments.com/PSD2, Germany has implemented this....

In my case they were offering a discount if paid by BT rather than a surcharge for paying by credit card - the discount in theory didn't apply to cheques, debit card or other mechanisms so not sure if that would have breached the german rules or not.

"Thankfully" the uk agent went bust before we were in a position to be able to place an order so didn't get to the point of discussing this with them