Linda McAvan: Change on the cards over high price of paying

In recent years, as more and more people have begun using the internet to pay for goods and services, especially to book travel tickets, businesses have responded by charging their customers fees to pay by card. Now there is some good news for consumers.

Members of the European Parliament and Ministers from the 27 EU member states have just agreed a new EU law, the Consumer Rights Directive, which will make all rip-off surcharges, for both credit and debit cards, illegal by 2014.

The EU law comes in the wake of thousands of complaints from consumers across Europe in recent years.

Credit and debit card fees have become increasingly exorbitant, with one well-known airline now charging a transaction fee for each passenger’s ticket, meaning someone purchasing four return tickets would have to pay the card surcharge eight times, a cost of £40 simply to pay.

There are countless other examples such as the website that charges a blanket £3.50 credit card fee to purchase train tickets, even if the train ticket is cheaper, while some music festival goers are being charged a transaction fee of £5.25 on top of a separate booking fee.

What makes these fees so frustrating to so many consumers is that there is rarely any other option but to pay with a credit or debit card, making the charges all but inescapable.

Worse still, it is often only on the final click of the mouse that the extra amount becomes apparent – leaving customers with little option but to go ahead and make the payment.

The lack of transparency over the amount of money people will actually have to part with also makes it difficult for consumers to compare rival retailers’ prices.

This practice, estimated last year to cost UK consumers around £300m in card surcharges to the airline industry alone, prompted Which? – the UK consumers rights body – to undertake its own investigation.

Which? puts the actual cost of a debit card transaction to a retailer at as little as 10p or 20p while credit card fees should cost no more than two per cent to process. It concluded that not only are the public being overcharged, but the fees are affecting competition.

It therefore presented its findings to the Office of Fair Trading (OFT) in the form of a super complaint. The complaint made a number of demands: that the charges are made clear from the outset; the cost of processing card fees should be no more than the cost to the retailer; and that retailers should, ideally, absorb the cost themselves.