A ban on "rip-off" charges for people who use debit or credit cards to buy goods and services such as flights and cinema tickets began today.
Under the new rules, traders are being told to make sure that any payment surcharges reflect the actual processing cost involved and are not excessive. The crackdown aims to make payments more transparent for consumers so they are not hit with a "nasty surprise" at the end of the payment process.
The Office of Fair Trading estimates that consumers spent around £300 million on payment surcharges in 2010 in the airline sector alone.
Surcharges are often imposed in other sectors, including rail, event tickets, cinemas, car dealerships and hotels.
The OFT's consumer research conducted in 2010 found that 87 per cent of consumers objected to extra charges for credit cards and 91 per cent objected to extra charges for debit cards.
Consumer Minister Jo Swinson said: "The practice of excessive payment surcharges has been ripping off consumers for far too long.
"They are fed up of thinking they will be paying a certain price for goods only to find out towards the end of the process that the final price is much higher."
Ms Swinson said the ban will stop retailers from cashing in by charging add-on fees that do not reflect the real cost of processing the payment.
She said: "Consumers will be less likely to get nasty surprises as they will have a clearer and more transparent breakdown of what they are paying for."
The new rules have been welcomed by consumer campaigners, who said businesses must not try to pass on costs in other ways.
Richard Lloyd, Which? executive director, said: "Over 50,000 people supported our campaign to end rip-off surcharges so we're pleased the Government is implementing this ban.
"For it to be effective there must be a tough enforcement regime and companies must play fair and not pass costs on to customers in other ways.
"We will be monitoring the ban closely and want people to tell us about surcharges they think are excessive."
The measures are being implemented through the Consumer Rights (Payment Surcharges) Regulations 2012. Micro businesses and business start-ups will be exempt from the regulations until June 2014, allowing them more time to prepare.
Which? has long campaigned for an end to hidden charges on consumer purchases. The consumer group's research revealed that consumers are fed up with having to pay surcharges for buying flights, train and theatre tickets with their credit and debit cards. Some 84 per cent of consumers told Which? that they felt there shouldn't be any extra fees charged to consumers for paying by credit or debit card.
Over three quarters (77 per cent) of people polled thought these fees were unfair. In addition, 74 per cent of those who had encountered fees in the last year thought that any additional fees for paying by card should already be included in the price quoted before payment, up from 67 per cent in 2011.
Just under half (43 per cent) of people have encountered a fee for paying by credit card or debit card in the last year, a rise of eight per cent on 2011. As in 2011, travel and event ticket sales were the two most common areas for these fees.
Other consumer rights campaigners have backed the calls for change.
Martin Lewis, of MoneySavingExpert.com, said: "It's about time this was tackled. The rule should be simple. If a fee is practically unavoidable it must be included in the main price, not listed as an ancillary. Doing this would encourage companies to drop it straight away as they'll look costly."
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