17 November 2017

Beware of pre-Christmas payment surcharge rip-off

The Turnbull Government has put businesses on notice ahead of the Christmas shopping period, as the Australian Competition and Consumer Commission (ACCC) cracks down on excessive payment surcharging.

The ACCC has issued its first formal infringement notices under the new excessive payment surcharging provisions legislated by the Turnbull Government to better protect consumers. A large merchant has been issued with four infringement notices and has paid $43,200 in penalties.

Importantly, this is only the beginning. More companies are expected to be issued with notices in the coming weeks in what will be a significant wake-up call for merchants.

The Turnbull Government won't allow Australians to be ripped off when they make purchases with their cards. We've empowered the ACCC as enforcers of our ban on excessive surcharging and today's announcement shows that businesses need to take this seriously.

Under the rules, which came into force on September 1, the surcharge on card purchases now has to reflect the true cost of the transaction to the merchant, not an artificially inflated sum designed to profit gouge.

If people think they are being hit with an excessive surcharge when they go to the shops, buy tickets online or book a holiday, they should not hesitate to contact the ACCC on 1300 302 502.

Many businesses choose not to impose surcharges. Where they choose to impose a charge for card payment, this should be made clear to the consumer.

As a guide, where a charge is imposed, consumers should expect to pay around 0.5 to 1 per cent for payment by debit card, 1 to 1.5 per cent by MasterCard and Visa credit cards and 2 to 3 per cent for American Express. If charges exceed these ranges, the matter can be raised with the ACCC for investigation.

Banks have been required to provide statements with average costs of accepting each payment method to inform business decisions on surcharging.

Today's announcement by the ACCC shows that this ban is the kind of real-time, practical action that the Turnbull Government is delivering to produce immediate results for Australian households.