News

OFT calls for airlines to drop debit card fees

29 Jun 2011 by BusinessTraveller

The Office of Fair Trading is calling for debit card surcharges to be banned, following a 90-day investigation focusing on the passenger transport sector.

The OFT says that paying by debit card is the “online equivalent of cash”, and should therefore not attract fees, a common practice with flight purchases through budget airlines websites including Easyjet and Ryanair.

The findings of the investigation also highlight “considerable evidence” of ‘drip pricing’, where payment charges are added to the total price of a purchase only after consumers have filled in a number of web pages during their purchase. The OFT said that this practice was “particularly prevalent in the airline sector”, with an estimated £300 million spent on payment surcharges in the UK during 2009.

The OFT said that traders should be allowed to continue imposing charges for other more costly (to process) payment methods such as credit cards, but only if they meet minimum transparency requirements.

The organisation says it has “put passenger travel companies on notice to change misleading debit and credit card surcharging practices or face enforcement action under consumer protection laws”, and is asking the government to change the law to prohibit surcharging for all debit cards.

Leisure carrier Monarch Airlines recently dropped debit card fees from its online flight purchases, and said it is "currently in negotitaions with credit card companies to reduce fees further" - for more information see online news June 3.

To read the full OFT report, click here.

Report by Mark Caswell

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