Credit card holders in Australia are feeling good. This follows the new laws passed by the Senate for protecting consumers against excessive surcharges. The new laws empowers the Australian Competition and Consumer Commission to crack down on offending merchants.
The guilty will be fined up to $108,000, if caught overcharging. Cabinet Minister Simon Birmingham told the Senate that cases of merchants using credit card for squeezing higher profits are becoming rampant. In most cases, the surcharges are more than 10 percent, reports Sky News. He hoped that the new laws would offer relief to credit card using Australians.
“What we’re targeting here are misleading payments where consumers face a fee allegedly associated with conducting a purchase by credit card that is indeed not a genuine and real and accurate reflection of the cost of that fee,” the minister added.
The Competition and Consumer Amendment (Payment Surcharges) Bill 2015 received the support of Labor and the Greens. The Greens also tried to amend the bill, by seeking harsh penalties on banks for charging excessive ATM fees. Several consumer groups welcomed the initiative.
“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,” noted Tom Godfrey from the consumer organization, Choice.
He hoped the new powers ofCCC will open up investigations and infringement notices to companies that break rules, reports Gizmodo. The new laws will take effect only after the Reserve Bank finalises the regulations.
A study by Choice had revealed that Qantas was charging $7 surcharge on a cheap flight. That was 348 percent higher than the real cost of processing a credit card. Jetstar charged $8.50 on surcharge, which was whopping and was more than 1000 percent.
Godfrey urged companies like Qantas and Virgin to “act in good faith and to end the pain by ditching their dodgy surcharges ahead of the laws taking effect.”