OFT to look into credit card surcharges

Credit cards have undoubtedly made life easier for many people, enabling them to enjoy flexibility with their repayments, the security of not having to use cash, and the ability to make purchases with ease using the phone or the Internet. Many people use their credit and debit cards to make all sorts of purchases online these days, which means that they can enjoy the ease and convenience of browsing products and services from the comfort of their own homes, and making payments safely and securely on reputable websites.

However, one sting in the tail of using credit and debit cards to make payments online is that many retailers and companies charge administrative fees, and many of these are quite extortionate, pushing up the cost of the purchase enormously. Many cardholders have made a purchase only to realise at the last minute that they are going to be charged a hefty fee on top of the purchase price simply because they are using their credit or debit card.

An official from one travel site said: “Many travel providers are not only passing the bank charges to customers, they are actually increasing them to generate extra revenue. The fact that some holiday companies also charge for debit card payments is a worrying development.”

A super-complaint has been launched by the consumer campaign group Which? for the various surcharges and fees to be looked into. The Office of Fair Trading is now looking into these fees and could end up making companies reduce the fees that they charge by way of administration costs for credit and debit card use.

The UK Payment Association said: “The credit card costs are per transaction. If you are booking six tickets at once, or one ticket in one credit card booking, the processing costs would be the same. It’s hard to see how companies can charge per item.”

 

Tags: purchase price, fee, sting in the tail, administration costs, online, extortionate, various surcharges

Banks need to reduce their mortgage arrangement fees

At a time when borrowing has become increasingly expensive, and when household finances have become tighter and tighter due to the global credit crunch, higher bills, increasing living costs, and higher petrol prices, the UK’s mortgage lenders have decided to deal borrowers another blow by hiking up mortgage arrangement fees, making it even more difficult for the average struggling consumers to take out a mortgage or remortgage. In fact, in the current climate some poor consumers could find themselves facing fees of thousands of pounds to remortgage or take out a mortgage, making the whole process impossible for some who simply cannot cope with that sort of fee. Read more

Tags: matter, fsa, UK's financial regulator, Mortgages, issue, current climate, council of mortgage lenders, extortionate