Credit card users warned about retailer surcharges

Credit card customers are being unfairly surcharged by retailers, the Director of Consumers Affairs, Ms Carmel Foley, alleged last night.

Ms Foley said she had been advised by payment card companies that imposing such surcharges - typically around 1.5 to 2 per cent of the transaction - contravened the "no discrimination" of payment card schemes. She called on card issuers to clamp down on traders that impose such charges on customers, including the withdrawal of service from such businesses.

Credit card surcharges occur most frequently in the travel and leisure industries, where customers use their credit cards to book tickets. These charges were sometimes "dressed up" as handling or postal charges, said Ms Foley. She described the surcharges as "hidden, sneaky charges" and said they were another way of squeezing money out of credit card users.

These charges would not have been imposed if customers chose to pay for the goods or services by cash or cheque and do not relate to services where it is only possible to pay by credit card.

"It is not illegal but it is against the rules of the card schemes. When MasterCard and Visa are authorising the use of their cards, they are saying to the merchants and banks that there should be no discrimination against someone who is paying by credit card," Ms Foley said.

"I would hope that MasterCard and Visa would be able to tell the merchant to clean up your act or get out of our system," she added.

Ms Foley has advised cardholders, who have surcharges imposed on them when paying by credit card, to complain first to the retailer and then to the institution that issued them with the card.

This would exert pressure on the card issuer to take action against retailer. She has written to card-issuing institutions reminding them of their responsibility to seek redress on behalf of cardholders who make complaints.

A spokesman for the Irish Bankers' Federation, Mr Felix O'Regan, said card issuers shared the director's concerns but did not have the authority to prevent credit card surcharges.