Banking News

ACCC fines merchants excessively surcharging

ACCC fines merchants excessively surcharging

(3 September 2019 - Australia) The ACCC has warned that there are hundreds of Australian enterprises still gouging consumers with illegal surcharges with Europcar recently fined A$350,000 for overcharging 63,000 customers

Using a card instead of cash can cost customers more if they also incur a card surcharge. In the move to cashless transactions paying for purchases can be as simple as tapping a card using Near Field Communication (NFC) technology. But using debit or credit cards instead of cash can cost more if you also have to pay a card surcharge.

East & Partners newly released Australian Merchant Payments report, based on direct interviews with 2,246 CFOs and corporate treasurers, reveals more merchants are applying a surcharge than ever before while the average surcharge rate has fallen significantly. One in two merchants currently apply a surcharge, officially double the proportion of merchants in 2009. The report details the amount average surcharges have declined, factors influencing merchants decision not to apply a surcharge and preferred methods of how they recover their cost of acceptance.

Laws were introduced in 2016 to limit how much surcharge a business can add on. Around one percent is fair for most credit cards. For contravening the rules fines were handed down to Red Balloon (A$43,000), Lloyds Auctioneers (A$40,000) and Fitness First (A$12,000). The ACCC says it is currently working through a large number of complaints about card charges and more than 750 small businesses have received warnings. Customers are warned to always check before they tap.

"I hope the experience of Europcar sends a message more broadly that there are quite considerable fines possible in relation to this issue. It's a bit frustrating for us because the law was introduced, it was introduced with quite considerable notice, and yet we find companies still not complying. When we find companies in 2018 still flouting the law, it is very frustrating” the ACCC's Mick Keogh said.

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