Payment surcharges on credit and debit cards to be banned

Highland Council’s Trading Standards are advising consumers and businesses of new Rights that came into force this weekend concerning ‘payment surcharges’.

When traders impose a charge on customers for making a payment, this is known as a ‘payment surcharge’.  

As from Saturday 13 January 2018 the Consumer Rights (Payment Surcharges) Regulations 2012 (as amended) will ensure that businesses cannot impose ANY surcharge for using: 

• consumer credit, debit or charge cards, 
• similar payment methods that are not card-based (for example, mobile phone based payment methods), 
• electronic payment services (e.g. Paypal).

The ban on surcharges applies to all payments made by the methods of payments listed above, whether or not they are in relation to a contract. So it covers not only payments for goods and services, but also taxes, charitable donations and other types of payment.

Payment surcharges are still permitted in relation to other methods of payment, for example payments made by: cash, cheques, standing orders or direct debits.  The consumer should not pay more than it costs the business to process the method of payment prescribed and any surcharge should reflect the actual cost to the individual business for processing the payment.  If a lawful surcharge is to be applied, the consumer must be made aware of it very early in the buying to process to ensure they are not misled about the total price they will pay.

David MacKenzie, Trading Standards Manager at Highland Council explains: “All sorts of purchases that consumers make on a regular basis are covered by the new ban on surcharges.   Buying a flight online, paying for a software download, joining a gym and booking concert tickets are typical examples but the list of possibilities is endless really.  Consumers should look out and make sure there are not hit with an illegal surcharge.”

Consumers are entitled to seek redress if asked for a payment surcharge that is banned or is more than allowed by the Regulations. If the fee has not yet been paid, then the trader cannot make the consumer pay it; if it has been paid, it must be refunded. 

Protection can also extend to business buyers in that if a sole trader is buying for a business but using a personal credit card, then the above rules still apply.  The ban on surcharges does not, however, apply to commercial debit or credit cards, i.e those used by registered companies. 

David MacKenzie further adds: “If a Highland consumer needs further advice or wishes to report a breach of the ban, they can do so by contacting our partners at the Citizens Advice Consumer Service on 03454 040506 or www.citizensadvice.org.uk/scotland/consumer/  and we will receive the information.”

Online advice for businesses regarding these new rules can be found by going to Business Companion website at: https://www.businesscompanion.info/en/quick-guides/pricing-and-payment/payment-surcharges

Highland based businesses can obtain further information or advice from Highland Council Trading Standards Service by telephone on 01463/228700 or by email to trading.standards@highland.gov.uk or through our Facebook page at:  https://en-gb.facebook.com/HCTradingStandards/