From 6 April 2013 it has become unlawful for businesses to charge consumer fees on certain methods of payments.
Jo Swainson, Consumer Minister welcomed the above news saying “consumers have been ripped off for far too long.”
Although payment surcharges will continue, businesses need to be up front and clear about the fees and they must only cover costs which may arise exclusively to the payment method, for example; merchant service charge paid to banks, IT/Equipment outgoings and risk management.
Any businesses who are in breach of these regulations maybe subject to an injunction against charging excessive fees and the provision of any contracts between the business and consumer requiring a consumer to pay excessive surcharges shall be unenforceable and as a result the business may be required to repay any excess to the consumer.
As these regulations refer to payment surcharges only, businesses may still charge administration charges so long as they do not relate to payment methods.
Regulations do not apply to certain “excluded contracts” such as residential rental contracts and contracts for financial services.
The Office of Fair Trading has estimated that over £300 million per year has been spent by the consumer within the airline sector alone and it is hoped that this change will put a stop to any nasty surprises at the end of their payment process.