The government is set to announce that it will be banning the practice of adding last minute surcharges onto transactions when people pay using a debit or credit card.
These extra charges of several pounds are usually incurred when a customer uses their card to but items such as concert tickets, holidays and airline flights.
Effectively what is happening is that the price you see advertised isn’t the actual price you will pay by the end of the transaction.
The consumer organisation, Which? took a ‘super complaint’ backed by 50,000 consumer supporters to the Office of Fair Trading (OFT) in March 2011 asking it to investigate these excessive charges.
The OFT came back and said that these excessive charges should be banned for debit cards at least, but the government looks set to go further and apply the ban to credit card payments too.
The European Parliament has also agreed to cap these charges and will amend the Consumer Rights Directive, which will lead to the ban coming into force Europe wide by the end of 2014.
But the UK government has said it will bring a ban in by the end of 2012.
Financial Secretary to the Treasury, Mark Hoban, said that consumers ‘have a right to understand the charges they may incur up front and not be hit through a hidden last minute payment surcharge’.
According to Which? consumers pay in the region of Â£300 million a year in surcharges with airlines leading the way.
Which says it is ‘delighted that the government met all of our requests and went beyond the OFT’s recommendations’.