Transaction charges

Jetter

I came across a company that says if you pay by bank/credit card they will receive the money less 2%.  i.e.  If you send £20 to your account, they would receive £19.60.   I thought transaction fees were now illegal or is this a loophole.
Can anybody clarify this?

Ebe_Scrooge

No, a company will be charged by the credit card provider - that's how credit card companies make their money.  What changed a couple of years back was that the vendor is not now allowed to pass those charges on to the customer - which is why some companies (particularly smaller ones) will simply refuse to accept credit cards now.

Jetter

Thanks for your reply.  This particular company are saying that if you fund the account with say £20 the account will only receive £19.60.  They say they do not receive £20.  I’m a bit confused and have tried to verify it with them but still not clear.

eskbanker

Jetter said:

Thanks for your reply.  This particular company are saying that if you fund the account with say £20 the account will only receive £19.60.  They say they do not receive £20.  I’m a bit confused and have tried to verify it with them but still not clear.

Unless the same applies for all accepted methods of payment, they're not allowed to do this, as it would be applying an unlawful 2% surcharge in the form of a deduction from a credit.  What sort of account is it and what's the name of the company?

jet01

IJetter said:

Thanks for your reply.  This particular company are saying that if you fund the account with say £20 the account will only receive £19.60.  They say they do not receive £20.  I’m a bit confused and have tried to verify it with them but still not clear.

I’m a bit confused about what you are actually asking here. If by the “account” you mean the company’s  account with a Merchant Acquirer then this probably true because the missing 40p will be the fee charged by the merchant to process the card transaction. 2% sounds roughly right as a ball park figure for transaction fee including the merchant charge. 

Why is this a problem for you? As long as you get the goods at the advertised fee and the card charges aren’t passed on to you which would be against the current law on card charges it shouldn’t effect you as the customer. 

The fact you say “fund” the account suggests this is being used as a method to fund a bank or savings account in this example rather than to make a retail purchase, in which case I think they would still be breaking the rules  if this is a “consumer” as opposed to a business account and they pass the transaction fee on to you. 

Sandtree

You many be better saying who the company is and what this "account" structure is.

Normally when you buy something from a company you tell them what you want, they give you a price and you authorise that price to your card/give them that amount of cash etc. Depending on a number of factors the cash that actually hits their bank account is likely to be less than the amount you authorised as merchants have banking fees to pay and credit cards are typically some of the higher ones. 

By the sounds of it though here you are talking about building up a credit balance first before then using that to buy things?

Jetter

Thanks for your reply Sandtree.

The company in question is a post forwarding service where you pay into your postal fund for them to use to pay postage to forward your mail.  They also charge for scanning your post which comes out of the fund.

Jetter

The company in question is call Expost.  It’s a post redirection service. 

I am looking for a good, reliable and cost effective mail redirection service not the Royal Mail.
If anybody knows of one, please let me know.  I’ve looked at a few so far - UK post box, Ghost Mail,
My UK post.   Anybody had any dealings with them, I’d love to know.  This is for personal mail while I’m abroad.  Thanks.

Sandtree

I believe they would be in breach of the rules when charging the fees they do for personal credit/debit cards if they are a UK entity. 

To answer this I had a quick look at their website its not the only problem there either, they claim their product is "bespoke" and so cannot be cancelled which is clearly a rubbish and their terms of service states:
'Expost' or 'we' or 'us' or 'our' means and refers to the Company or Sole Trader or Partnership trading as Expost and named in the website Terms and Conditions of the Mail Centre you have selected.
Company or sole trader? Its as if they don't know who they are themselves

Personally would struggle with the idea of giving the level of information they ask for to an unknown person or company who clearly are relaxed with not complying with appropriate legislation

The domain itself is owned by Expost Holdings Limited and the same guys own a series of other companies around property management

Jetter

Thanks Sandtree for checking it out.

Sounds a bit dodgy to me and I think I will steer clear.  They may not be trading with a UK bank account and are offshore so don’t think the regulations apply to them.  Whatever it is, it does not feel a safe company to deal with especially with sensitive stuff such as post.