Crackdown on credit card surcharges

The end of excessive credit card surcharges is on the horizon.
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02.Who are the main offenders?

While many retailers are doing the right thing and have reduced or abolished excessive surcharges, others are holding firm or even employing sneaky tactics. Among the worst offenders are Cabcharge, recipient of a 2012 Shonky, and the airlines, with Qantas receiving a Shonky in 2009.

The RBA cited the recent taxi industry inquiry in Victoria that argued the Cabcharge surcharge should be capped at five per cent. But against the backdrop of a falling share price, Cabcharge has stood defiant and said it will fight any cap on its surcharge.

The airlines have also dramatically increased their surcharges since our 2010 investigation into surcharging in this industry. For domestic flights surcharges have increased:

  • from $3.50 per flight per passenger to $8.50 for Jetstar.
  • from $3.50 per sector per passenger to $7.70 per booking per passenger for Virgin Australia.
  • from $7.20 per sector per passenger to $8.50 per sector per passenger for Tiger.

Both Virgin and Tiger posted increases after the RBA made public its view on surcharges, Tiger in January this year.  And all three airlines are muddying the waters, calling their credit card surcharge a “booking fee” or “booking and service fee”.

Are they preparing a similar stunt to that carried out by UK carrier Ryanair? Ordered by UK Fair Trading to scrap an unlawful £6 debit card fee, Ryanair complied but then hit consumers with a new £6 “website administration fee” and an additional two per cent credit card fee.

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