Senate passes new legislation to fight excessive transaction fees

The now has ACCC the power to fine companies charging excessive surcharges.

The Senate passed a bill on Monday that will give the Australian Competition and Consumer Commission (ACCC) the power to fine companies that charge customers excessive surcharges on transactions. According to a recent CHOICE analysis, last year, Australians forked out an estimated $800 million in credit card surcharges, with some airlines adding on an 1187 per cent mark-up in surcharges.

The new laws won’t come into effect until the Reserve Bank finalises regulation, which could be some months away. Consumer advocacy group CHOICE is continuing to put pressure on some of the biggest companies, including Qantas and Virgin to ditch their excessive surcharges ahead of the laws taking effect.

“Airlines, ticketing companies and taxis are among the many businesses that have for years punished consumers who pay with credit cards. Even when faced with an earlier RBA ban, these corporate profiteers ignored the rule and continued to inflict pain on our hip pockets,” said CHOICE spokesperson Tom Godfrey.

“We are delighted that the ACCC has finally been given the power to investigate if a surcharge is fair and issue infringement notices of up to $108,000 for companies that don’t play by the rules,” says Mr Godfrey.

Is this legislation change a win for consumers? Or will these companies simply find another way to recoup the lost revenue in the price of their products? Why have they been allowed to flagrantly ignore the RBA ban?

Read more from www.choice.com.au
Read more from www.abc.net.au





    COMMENTS

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    ourjeffie
    23rd Feb 2016
    10:37am
    Is this legislation change a win for consumers? Or will these companies simply find another way to recoup the lost revenue in the price of their products?

    Of course they'll find another way - some of them are already doing it. For example, one company now says "No credit card fees, just a flat booking fee of $19.95"
    MICK
    23rd Feb 2016
    10:53am
    The fact that you almost never hear the ACCC on TV tells a tale. What we need is proper jobs done at the ACCC, not more legislation. But then this is a government office and also function at 20% rather than 90%.
    cookie47
    23rd Feb 2016
    11:29am
    The ACCC an organisation that does a lot of huffing and puffing and that's about all
    Rod63
    23rd Feb 2016
    11:52am
    This is an excellent result. People should pay the same. no matter which method of payment is used,
    KSS
    23rd Feb 2016
    12:17pm
    This is a start but when are they also going to put a stop to companies charging you extra for NOT paying by direct debit even if you pay by EFT?
    Marius
    23rd Feb 2016
    12:20pm
    An issue that seems to have been lost along the way in this debate/discussion is that the concept of credit cards was sold to companies/merchants on the basis that it would save them significant money by the company/merchant no longer needing to maintain a debtors ledger and reduced the company's/merchant's risks of bad debts, by them no longer needing to provide credit to customers.
    This risk was taken over by the financial institution issuing the credit card. Now merchants want their savings from not needing to maintain a debtors system and they want to charge clients for the privilege.
    Perhaps we should consider going back to the old days when we had a store credit account and did not pay a fee for putting purchases on the store account, then the discussion could be turned, whereby, the merchant could gives back some of his savings by not having to administer a debtors system. The merchant should consider giving a discount to customers who save him money by not using in-store credit but use a credit card and an even bigger discount for a cash purchase. Ask your merchant, it is worth a try.
    In summary, there should be no credit card surcharge, as the credit card facility was provided to save businesses money in the first place. Their merchant fees are less than the cost of providing credit themselves.
    Chris B T
    23rd Feb 2016
    2:29pm
    Over charging is one thing, multiple charging for return flights and passengers is fraud when only one transaction is made on credit card.
    There are ways to avoid the over charging, but Doesn't make the multiple over charging for one transaction Legal.
    The mandatory fee for a seat even when you take there selection.
    (Standing is not an option)
    ;-(0)

    23rd Feb 2016
    2:38pm
    The ACCC should be doing something about the petrol price, but have probably been told by the government not to because of the the tax revenue the government is swimming off the outrageous price per litre.
    Bigfoot
    23rd Feb 2016
    6:05pm
    I agree Fast Eddie, Isn't it amazing how our Governments can pass legislation to fine companies who charge excessive surcharges on credit card transactions but they allow the oil companies to charge whatever they like!
    MiningMagnet
    26th Feb 2016
    12:04pm
    I guess one day the ACCC will get a real budget and some real teeth to go after the bad guys - imagine a world where we could be confident that the voters got the 'govt favours' not their best mate who gave them a few dollars or free time on TV
    But I won't be holding my breath while either of the two major parties are in power
    Both parties have been seen to reduce, limit and minimise the powers, scope and capability of the ACCC - both parties have been in bed with the corporates at various times.
    Murdoch's ability to make/unmake this country's governments by blinding muppets with mainstream media horse-feathers would normally be worthy of a Royal Commission (forget 'govt favours' he actually 'owns' these creatures !!)....but let's see if we ever have a government with the courage to do that !!!
    We all saw what happened to the Prime Minister with the courage to order a Royal Commission into the church's behaviour !!
    No surprise really - when was the last time a politician or businessman set up an effective system that was able to investigate, regulate and prosecute them for any wrong-doings or falling victim to 'undue influence'...hahahahahahahahah.
    At best these systems are simply political pit-bulls to be used to smear the other side, at worst they are vehicles used to limit and re-direct market forces in favour of corporations friendly to the government of the day