Airlines risk legal action over credit card 'sting'

Budget airlines, theatres and football clubs risk legal action if they continue to levy inflated charges for paying by credit and debit cards, the Office of Fair Trading (OFT) warned yesterday.

In a long-awaited crackdown on "rip-off fees", the business watchdog said entertainment and travel firms should drop debit-card charges and levy proportionate ones for credit cards.

Passengers booking with budget airline can be stung by fees approaching £50 to cover processing costs which come to a fraction of that amount. Although many firms now waive debitcard charges, some airlines and ferries charge £5 per transaction when the processing cost is as little as 20p.

The OFT launched its 90-day investigation after the consumer group Which? lodged a super-complaint claiming that the charges were unfairly penalising consumers and hindering competition by making it difficult to shop around online.

The OFT concentrated on investigating the travel sector – airline, ferry and train companies – but said its conclusions applied to all credit and debit charges made by businesses. It complained that the airline sector, which charged £300m payment fees last year, often added charges only at the end of a drawn-out booking process. The watchdog refused to name and shame the worst offenders, but pointed out that customers passed through eight web pages before easyJet added an £8 charge, while Ryanair levied £6 per journey only after four pages.

Cavendish Elithorn, senior director of the OFT's consumer group, said: "Consumers find it harder to shop around and find the best deal if they have to invest time and effort in discovering surcharges. We will take enforcement action against any businesses that do not respond to today's announcement and instead continue to use misleading surcharging practices."

The OFT's chief executive John Fingleton criticised Ryanair's booking fee as "puerile" and "almost childish" in a front-page interview in The Independent last year. Ryanair last night attacked the watchdog, insisting that customers could avoid its "administration fee" if they used MasterCard Pre-pay. The OFT said that because so few people held such cards such charges were "effectively compulsory".

The OFT does not have the power to order firms to change their practices but can take court action under the 2008 Consumer Protection from Unfair Trading Regulations. It will also ask ministers to outlaw unfair charges.

Responding to its findings, Peter Vicary-Smith, Which?'s chief executive, said: "We want to see the measures recommended by the OFT put in place as quickly as possible and finally put an end to the practice of card surcharging. Industry shouldn't drag its feet over this."

Martin Lewis, creator of Moneysavingexpert.com, said the announcement was "only the beginning of the end" of excessive charges. Calling for a law requiring the core price advertised online to include debit-card charges, he said: "The current system of budget airline surcharges for both debit and credit cards is a scam."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Account Manager / Sales Executive - Contract Hire

£35000 - £60000 per annum: Recruitment Genius: This industry leader provides c...

Recruitment Genius: Project Coordinator

£28000 - £30000 per annum: Recruitment Genius: A Project Coordinator is requir...

Recruitment Genius: Area Sales Manager - Midlands

£20000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: PHP Developer - 3-4 Month Fixed Contract - £30-£35k pro rata

£30000 - £35000 per annum: Recruitment Genius: This is a 3-4 month pro rata fi...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

No grace of God for Katy Perry as sisters act to stop her buying convent

Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
10 best sun creams for body

10 best sun creams for body

Make sure you’re protected from head to toe in the heatwave