UK Shoppers Slammed with Illegal Credit Card Charges, Despite New Law

Starting on January 13, businesses in the UK are no longer allowed to charge customers extra fees for using debit or credit cards. The U.K. Treasury ensured consumers that this policy would not involve “any nasty surprises, and they won’t be penalized in a particular way.” However, the problem for businesses with this ban on surcharges is that businesses are forced to absorb the costs when consumers choose to pay with a credit or debit card.

Since January, new research has come to light that shows some businesses are trying to find a way around this policy. The research consultancy Consumer Intelligence discovered that:

  • 14 percent of shoppers have been charged an additional fee for paying with a credit card online – after the new policy was put in place.
  • 21 percent were charged a booking fee using a credit card since Jan. 13.
  • 13 percent were asked to pay a transaction fee.
  • 13 percent have been asked to pay an administration fee.
  • Consumer group Which? also reported consumers still paying fees, facing spend limits or completely being denied the option of using a card.

Many are not shocked by the news that the ban on credit card surcharges has not been a seamless process. The ban took effect amid many concerns and questions. One of the biggest concerns was how these changes would affect consumers as far as cost and additional fees added by retailers to make up for the hit they were going to take from the ban. For example, take-away company Just Eat was criticised for adding a “service charge” on all orders – a 50p “service charge” levying what was once a 50p surcharge on debit and credit card payments.

How do consumers feel about these new charges from businesses? Consumer Intelligence’s research found that some are more willing to accept the additional fees than others. 67 percent said a credit card fee would probably make them abandon a transaction. However, that number was dropped to 54 percent if that charge was labelled a “booking fee”.

Money spokesman Gareth Shaw commented on the situation, saying, “The Government and regulator need to closely monitor the impact of the ban – and the fees banks charge retailers for card payments – to ensure that it has the positive impact for consumers originally intended.”

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Author Bio: Electronic payments expert Taylor Cole is a passionate entrepreneur who also enjoys to write, play guitar and camp. Bestpaymentproviders is UK’s best worldpay reviews, serving both traditional and high-risk merchants.