IBF and CAI join forces in move to outlaw ‘unfair’ credit card surcharges

EXTRA charges imposed by retailers on customers who pay by credit card should be made illegal, according to the Irish Bankers Federation (IBF).

The banking umbrella group has joined forces with the Consumers’ Association of Ireland (CAI) to lobby the government for new legislation to ban the practice, which it described as “an additional and unfair cost.”

The surcharges cost consumers millions of euros every year and acted as a major deterrent for people who would otherwise use their cards, the group said. Irish banks are unhappy with a recent move by MasterCard to change the rules governing its scheme in favour of allowing retailers to levy extra charges if they wish. Visa forbids retailers charging credit card users more than people who pay in cash.

“Banks here are now all the more concerned that surcharges on card payments may become even more widespread,” said IBF president Diarmuid Bradley. “We believe the only effective solution lies in national legislation to specifically disallow surcharging, only national legislation can override the Mastercard scheme rules.”

CAI chief executive Dermott Jewell said: “This move to extract even more money from consumers, for no return, now clearly indicates how skewed and unrealistic this sector has become in its solely profit-driven focus and mission. It is the calculated intention to bleed the customer dry that more readily reflects today’s mindset and which dictates how determinedly we must resist these surcharges and outlaw them.”

The surcharges take the form of service charges, booking fees and administration fees and have been widely criticised by consumers. Some retailers, however, defend the charges and say they are simply passing on transaction fees levied by the card providers.

The IBF and CAI said they hoped the Financial Regulator would support their drive to get the surcharges banned.