Card Surcharges Outlawed With Effect From 13 January 2018

Date Added 11.01.18

From Saturday 13th January 2018 the practice of traders adding extra costs on to your bill at the end of the purchase process will be outlawed.

The Payment Surcharges Regulations provide that a trader cannot impose any charge on a consumer for paying by credit or debit card, making an online transfer or paying for something by direct debit if both the following conditions are satisfied:

  • A trader is selling to a consumer; and
  • Both the trader and consumer are using “payment service providers” which are located in EEA member states.

Banks, credit card companies and businesses such as Sage Pay, Paypal and WorldPay are all payment service providers.

If only one payment service provider is located in the EEA then a surcharge may be levied but this must not be excessive and in such cases the existing consumer protection legislation requires the trader to obtain the express consent of the consumer to the surcharge before the contract is made.

Although the new ban comes into effect on 13th January 2018 it will apply to any ongoing payments to be made after that date under contracts made after 18 July 2017.

In business to business transactions excessive surcharges are outlawed if at least one of the payment service providers involved is located in the EEA.

There are exceptions to the new rules. For example: booking fees charged by a cinema or theatre are allowed provided that the fee payable is not dependent upon the payment method.

For traders who infringe the new rules both the Competition and Markets Authority and Trading Standards will have enforcement powers.

If you would like more information on the new rules relating to surcharges, Talk to Tollers on 01908 396230 and ask for Liz Appleyard in our Commercial Team.

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