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UK Outlaws Stealth Debit Card Surcharges On Air Fares

by Amanda Banks, Tax-News.com, London

09 July 2012


The Office of Fair Trading (OFT) in the United Kingdom has introduced new rules in respect of twelve airlines requiring them to include debit card surcharges in the headline price of their fares, rather than displaying them at the end of the booking process.

The enforcement action involves airlines Aer Lingus, BMI Baby, Eastern Airways, easyJet, Flybe, German Wings, Jet2, Lufthansa, Ryanair, Thomas Cook, Thomson and Wizz Air who following a consumer law investigation by the OFT agreed to the change to their practices. Many airlines have already changed their advertising, while the OFT has agreed with others to implement the changes from August 1, 2012.

The enforcement action only relates to debit card surcharges, estimated to cost passengers an additional GBP300m (USD464m) each year in additional costs. The OFT has said that it has received an agreement from traders that they will display credit card surcharges more transparently, to make these charges more clear during the booking process.

The government has also announced plans to bring forward legislation to ban excessive debit and credit card surcharges across the economy.

Welcoming the changes, Clive Maxwell, the OFT's Chief Executive, said: "This is a great outcome for the millions of people who buy flights online. It is important that the cost presented when they search for a flight is realistic and that they are not surprised by extra charges. Otherwise it is harder for them to shop around for the best deal."

To enhance fare transparency the Civil Aviation Authority publishes a quarterly table comparing the charges made by airlines for optional extras and payment charges. These extras can include fees for priority check-in and boarding, charges for hold luggage and fees for changing details on tickets. The next update is due on July 31, 2012.

TAGS: business | law | aviation | United Kingdom | legislation

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