End credit card rip offs?

It was a good headline this morning. I do hope it is going to apply to the public sector as well. I seem to spend so much time these days complying with public sector rules, and making payments for permissions and to meet tax demands. The public sector has a habit of telling me that if I want to pay by credit card there is an extra payment, on top of the tax they are levying. Yesterday it was a demand for a surcharge in order to pay my road fund licence. Austerity UK so far has been about ever more tax to meet the public sector bills. Dropping the surcharges in public demands would be a nice Christmas present, but they will probably claim their surcharges are “reasonable additional transaction costs”.

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  1. Single Acts
    Posted December 23, 2011 at 6:55 am | Permalink

    JR, as you know very well “credit card rip-offs” are simply a private transactions voluntarily entered into. This is no business of the state, and one party crying foul post contract and asking for it to be annulled is the thing that should really bother you.

    • lifelogic
      Posted December 23, 2011 at 8:40 am | Permalink

      Sometime regulation, say limiting surcharges to 1%, can be good. To level the playing field and direct comparisons. Another area it would be welcome would be on fuel charges and phone charges so a standard quote could be given on a similar basis fixed for a minimum period so comparisons would not then take several days to work out which is best.

      Confusion marketing and confusion billing is often the name of the game here.

      • Mark
        Posted December 23, 2011 at 1:47 pm | Permalink

        You could also try this gem from OFGEM:


        Entirely designed to obfuscate what is happening in energy markets – but then perhaps it comes with their remit which now seems to be dominated by “the reduction of greenhouse gases”.

      • Bazman
        Posted December 23, 2011 at 2:03 pm | Permalink

        Doesn’t take me several days as I use a comparison site of which there are many then cross reference the results.

        • lifelogic
          Posted December 23, 2011 at 5:33 pm | Permalink

          Yes but the change the rates just after you start, give loyalty bonuses, DD discounts, tie you in and all sorts of other tricks and the comparison sights are far from perfect anyway.

          • Bazman
            Posted December 23, 2011 at 10:34 pm | Permalink

            Not real.

      • lifelogic
        Posted December 23, 2011 at 2:12 pm | Permalink

        I see in the interview with Charlie Bean, Deputy governor at the Bank of England said “But the one thing we know about economies is that they do tend to be self-righting.”

        Well not really Mr Bean – if the state gets bigger and bigger over pays and pensions itself, keeps hitting private business with more and more taxes, fines and daft regulations, prints money to devalue the currency, discourage investment and savings and create inflation it will not self right. Indeed people will just leave.

        At least it will not “self right” until the direction of the government and the bank is returned to sanity in some way by the people. Should sufficient democracy still exist to actually allow that to happen.

        • Bazman
          Posted December 23, 2011 at 5:06 pm | Permalink

          Who will leave and where will they go? As you well know it is not only about money and this constant threat by the rich needs to be called in. When all the money goes to a few at the top everything breaks down. Taxing the people at the top and reinvesting the money into the democratic society is fundamental to keeping things going.

          • lifelogic
            Posted December 23, 2011 at 9:25 pm | Permalink

            You say “Taxing the people at the top and reinvesting the money into the democratic society is fundamental to keeping things going.”

            Put another way – taking money of the productive and people who manage money well and transferring to the feckless who do not (after wasting half in the process).

            Yes to a degree it is needed for those few who really cannot look after themselves but it has gone far too far and everyone suffers and is impoverished as a result.

          • libertarian
            Posted December 23, 2011 at 10:11 pm | Permalink

            When all the money goes to people at the top? What on earth are you blubbering about. You have no idea at all.

            Money is NOT a zero sum game. Any one can create money any time

          • Bazman
            Posted December 24, 2011 at 12:30 pm | Permalink

            The money at the moment goes to the top like giant ponzi scheme with the bankers skimming off the top fees for fake profits.

        • outsider
          Posted December 23, 2011 at 10:30 pm | Permalink

          Argentina is the classic example of your point. In 1870 it was one of the richest nations in the world. A hundred years later it was a basket case middle income country, almost entirely thanks to government mismanagement.

          • Bazman
            Posted December 24, 2011 at 9:14 am | Permalink

            The idea that there are producers and parasites as expressed in the example above has become a core philosophy of conservatives. They claim that wealthy people “produce” and are rich because they “produce.” The rest of us are “parasites” who suck blood and energy from the productive rich, by taxing them. In this belief system, We, the People are basically just “the help” who are otherwise in the way, and taxing the producers to pay for our “entitlements.” We “take money” from the producers through taxes, which are “redistributed” to the parasites. They repeat the slogan, “Taxes are theft,” and take the “money we earned” by “force” (i.e. government.) Ram it.

    • A different Simon
      Posted December 23, 2011 at 12:28 pm | Permalink

      Single Act’s ,

      They may be voluntarily entered into but they are not always entered into by choice .

      Self employed people typically have no choice except to use credit cards due to cash flow problems .

      This is because our useless , incompetent , parasitic , loss making , money sucking , sacred liabilities called banks aren’t offering overdraft facilities despite being given access to taxpayers money at 1% to lend out at 9% .

      Is it any surprise when they can lend out the same money at 24.99% through credit cards !

      If the Govt really wanted to help it would pass a law limiting interest payments to 12% above boe base rate .

      Why are you in such a hurry to throw lambs to the financial services industry ?
      Haven’t you worked out by now that once they are cleaned out it will be you and me who pay for them for the rest of their lives ?

      • lifelogic
        Posted December 23, 2011 at 2:33 pm | Permalink

        Indeed I know of people with substantial assets who cannot borrow they are more credit worthy than most banks and can offer security but the banks are just not lending on sensible terms.

  2. Mick Anderson
    Posted December 23, 2011 at 7:13 am | Permalink

    A friend runs a garage, and obviously takes plastic. He has to put an extra 2.5% on an invoice to cover the bank charges for credit card transactions. As a result, he encourages all customers to use a debit card, for which he makes no charge.

    I think that the DVLA has a similar system – pay by debit card and there is no surcharge. It only applies to credit cards.

    If (as I believe) it is the banks demanding a premium, I disagree that this payment should be made by the Government (aka. the tax payer) on behalf of the individual. The banks need to take substantially less for the transaction. If they claim that is is to “cover the cost of those defaulting” then they need to make credit cards harder to obtain by those who might fail to make the repayments.

    However, the “budget” airlines who charge a premium for debit cards payments are basically profiteering. They’ll be charging for oxygen next, on the basis that a passenger has the “option” of taking scuba equipment on board to sustain life during the flight.

    • alan jutson
      Posted December 23, 2011 at 9:03 am | Permalink

      Mick, Scuba equipment will not go as hand luggage as it probably exceeds the size allowed, contains more than one element (one bag only) so you will need to pay extra for it to go in the hold.

      Take your point about credit card charges though, and on some airlines its a charge on each passenger, each way.
      What with the Air tax, Carbon tax which has still to come in, baggage charges, check in charges and the like, you now pay more for all of these elements than you do for a seat.
      So much easier an all inclusive cost, which includes all non escapable charges being shown up front, rather than having to trawl through pages and pages of form filling on a web site, just to get a comparison before you book.

      We now travel light where we can, hand baggage only, wear a large coat with lots of pockets, and check in on line to avoid most of the optional additional costs, but even hand baggage is not a standard size, and varies between airlines.

      • Mick Anderson
        Posted December 23, 2011 at 10:09 am | Permalink

        That’s why I put “option” in inverted commas. It is only theoretically possible. Just like paying the airline using other than credit or debit cards is theoretically possible when buying a ticket on-line.

        You could transfer money directly into a bank account, which probably does not have an associated surcharge (yet). In practice, they don’t provide a mechanism to do it, just as you can’t take your own air tanks and regulator on board as hand luggage.

      • Airey Belvoir
        Posted December 23, 2011 at 5:16 pm | Permalink

        An enterprising chap has invented a special lightweight ‘budget airline coat’ which is essentially a huge pocket, with sections for laptop, clothes etc. He should do well with it.

        • lifelogic
          Posted December 23, 2011 at 9:27 pm | Permalink

          Will wearers not be seen as potential terrorist?

    • David Price
      Posted December 23, 2011 at 10:54 am | Permalink

      Ryan air apparently do charge extra for Oxygen – there is an “Oxygen Reservation Fee”, whatever that is, at £100/e100 per passenger per reservation.

  3. Javelin
    Posted December 23, 2011 at 7:56 am | Permalink

    How can a credit card transaction cost be claimed as reasonable additional cost? Paying at the post office is surely more expensive?

    I have trust that a judge will throw out any unreasonable claims like this.

    • Mick Anderson
      Posted December 23, 2011 at 10:03 am | Permalink

      A couple of years ago, asked the man behind the counter how much of the cost of a tax disc went to the Post Office. The answer was £0.49, flat rate.

      Even if the banks only charge the DVLA 1% for a credit card transaction (cheaper than I’ve heard of in the “real world”) that is more than £0.49 for the vast majority of tax discs.

      I suspect that the actual cost of processing a credit card payment is the same £0.20 for a debit card transaction. There is no percentage involved. The rest of the fee is loaded up by all the other things that banks like to charge for.

  4. ChrisXP
    Posted December 23, 2011 at 8:07 am | Permalink

    Yes we have noticed a considerable increase in the number of demands for extra charges when paying by credit card….not just public sector either. One really has got to read the small print even more carefully these days. Recent purchase of a kitchen attracted a 2% charge if paying by credit-card….now, forgive me if this has been going on for some time but we aren’t in the habit of buying a kitchen every week. So on ten grand that’s an extra two hundred quid. Fortunately we didnt have to go that route.

    We are being charged extra in some way for almost everything, dependent on how we pay. For example British Telecom penalises people for paying by any method other than direct debit…. even faster-payment bank transfers don’t qualify, which is pretty disgraceful really when you think that the process deposits the money straight into their bank account. (I know, I’ve tried it). I think it’s time someone took a serious look at this issue. As it is, we are now cutting our contract with BT and going elsewhere, to a company that doesn’t charge extras over how you pay the bill.

    It looks like the thin end of a fat wedge…..as usual. Soon we will be charged for everything other than direct debit (I wonder why? grin). Interesting to note, therefore, that a week or two ago (during a nasty thunderstorm) I tried to pay for something in a local shop, only to be told “sorry, the card-reader is out of operation…have you got cash?”.

  5. English Pensioner
    Posted December 23, 2011 at 8:30 am | Permalink

    I see no objection to a reasonable fee provided that there is an easy way of paying without incurring the fee, but find it totally unreasonable if payment by card is the only option. There are also other fees which are frequently added to the price of goods/services, such as a “booking fee” at theatres, even if you pay cash at the booking office, or “post and packing” which grossly exceeds the actual cost. No doubt some companies will find some way of introducing extra charges for “admin” or something similar.
    Surely the rule should be that it must be reasonably possible to make your purchase at the advertised price without any extras, and that any extras should be clear before you start the transaction, not hidden away where you are unlikely to see them.

  6. lifelogic
    Posted December 23, 2011 at 8:34 am | Permalink

    The real rip off is credit card interest rates which should be capped it some way abouve say 30%. I agree that the state should not really be using this as an additional revenue raising method. If people have to pay on credit card they need help not a further kicking. The government and large companies should hot have to pay more than about .8% fee anyway if they arrange a good deal.

    The other thing many companies (and the state do) is to use high charged phone lines to rip off the public all the time. Often then not even answering them for five minutes and just giving a message to get lost and call back later in the case of the state sector.

    • A different Simon
      Posted December 23, 2011 at 12:35 pm | Permalink

      Completely agree about limiting interest rates .

      Given the amount of help the financial services sector has received from the taxpayer it’s the least we can expect as we are going to be paying for their incompetence and the country will never recover from this .

      Would not seem unreasonable to confiscate all the assets of directors of institutions who have had taxpayer bailouts and of the politicians who aided and abbetted them and distributed them to the needy .

  7. Tedgo
    Posted December 23, 2011 at 8:51 am | Permalink

    The most annoying charge I encountered was going in to the Post Office and buying Australian Dollars with my debit card. Towards the end of the transaction the lady said my bank might make an additional charge.

    My bank (Barclays) did make an additional charge of £4.50. How did my bank know that the transaction was for foreign currency rather than a lot of parcels and other postage. The Post Office must have told them which would seem to be a breach of confidentiality.

    • APL
      Posted December 23, 2011 at 11:48 am | Permalink

      Tedgo: ” Post Office must have told them which would seem to be a breach of confidentiality. ”

      Our wonderful Parliament has passed loads and loads of ‘money laundering’ legislation the effect of which is there is no confidentiality.

      Meanwhile politicians shady property deals funded exploitation of the expenses system eg: one ‘partner’ double dipping into expenses to turn a profit on a house the other ‘partner’ owns, goes largely unremarked and unpunished.

  8. Peter T
    Posted December 23, 2011 at 9:00 am | Permalink

    It is a bit like the (charging policy-ed) at BT. Unless you pay by Direct Debit there is a charge to cover the cost of paying your bill. I regard this as extortion.

    • backofanenvelope
      Posted December 23, 2011 at 11:16 am | Permalink

      I just send them a cheque instead of a simple online transaction. So they have to do something for the £5+ they charge. Of course, BT thinks it is still the State telephone service.

    • Bob
      Posted December 23, 2011 at 12:12 pm | Permalink

      I wish I could have a pound for every time I have heard the word (questionable business practice-ed) in the same sentence as “BT”.

      I think they have not yet shaken off the monopolistic attitude, it seems to be cultural.
      Anyway, thanks to the great Margaret Thatcher we now have a degree of choice.
      It will be even better if BT Wholesale lost their monopoly of the infrastructure, although I’m not sure how that could be done. Maybe technology will provide the solution, and BT will go the way of the dinosaurs. In the case of the TV licence the technology exists to enable it to be scrapped, but the government seem to be afraid to do so. Can you imagine the outcry if BskyB were to demand money with menaces and intimidation like TVL?

      • lifelogic
        Posted December 23, 2011 at 2:29 pm | Permalink

        Certainly there is a failure of competition in the telecoms market. Phone calls and data are hugely over charged. Confusion marketing abounds. Calls should be virtually free (many are not included in bundles when they are thought to be and many are of such poor sound quality). The costs of electronics has plummeted and reliability of electronics has hugely improved. Memory has decreased in price by to about 1/100,000,000,000 of what is was just 20 years ago and the amount of electricity used is minimal. So why still such a rip off of confusion marketing and 0845 numbers and huge holding times? Not to mention the international data rip off.

  9. alan jutson
    Posted December 23, 2011 at 9:06 am | Permalink

    Always pay Road tax at the Post office for this very reason John, but clearly you have to have the time available to do it.
    But why only main Post Offices in Towns, why not local/sub Post Offices as well.

    Does the Post Offices make a handling charge to DVLA ?
    Guess they do, otherwise why bother.

    • Tedgo
      Posted December 23, 2011 at 1:09 pm | Permalink

      Our local/sub Post Office does, though that may change with the recently announced restructuring.

  10. Tedgo
    Posted December 23, 2011 at 9:12 am | Permalink

    A few years ago supermarket receipts used to show that the price of the goods included a charge of 2.5% for handling the transaction, whether it was cash, debit or credit card. They do not show it now but no doubt the charge is still built in to the price.

    Looking at my Barclaycard transactions in Australia last year, they seem to use a reasonable exchange rate plus a commission charge of about 2.75%. If they do away with the commission charge no doubt they will use a less favourable exchange rate.

    • Ben Kelly
      Posted December 23, 2011 at 2:14 pm | Permalink

      There was no charge to the purchaser for this it was VAT avoidance . The supermarkets applied a 2.5% discount to the purchase and then added it back but reclaimed the whole amount of the VAT on the 2.5% charge.
      The practice was discouraged by HMRC VAT legislation

  11. dan
    Posted December 23, 2011 at 10:10 am | Permalink

    …or the scam with airlines if for whatever reason you fail to take a flight you have booked and paid for. Try and claim back the tax and you are hit with a £25 ‘admin’ charge, gobbling up any refund due.

  12. Iain Gill
    Posted December 23, 2011 at 10:36 am | Permalink

    to be fair to the retailer they need some mechanism to encourage the punters to use those bits of plastic which are cheapest for them. i understand switch charge the retailers less than visa/mastercard who in turn charge less than amex and so on. it doesnt encourage competition in card rates if the customers get charged the same regardless of how much the card vendors charge the retailers.

    what should definitely be stopped is charges which are added right at the end of a long and complex ordering process, dropped in as a surprise when you have already comitted a lot of time to the transaction, or even worse applied when its too late for you to try another vendor.

    • forthurst
      Posted December 23, 2011 at 3:18 pm | Permalink

      Switch was merged with Maestro which is owned by Mastercard. Mastercard and Visa have been been involved in major anti-trust litigation. There needs to be more legislative oversight of businesses that operate either monopolies or duopolies and where the cost of entry is prohibitive. Too many companies have licences to print money apart from the private secret bankster-owned (but which?) Fed. All such licences should be subject to rigorous

  13. Winston Smith
    Posted December 23, 2011 at 11:02 am | Permalink

    I keep banging on about this, but the way to solve many of these issues of excessive profiteering is for the State to take measures to open up the markets.

    I was recently working with an online businesses, which receives its revenues via PayPal and WorldPay. Both of these are run or adminstered by major banks. The delays in forwarding payments are unacceptable and cause problems for the cashflow of the business. We need more competition to provide more providers, lower fees and ultimately spreading the wealth.

    However, all I here from the Conservatives these days is more Socialist Corporatism, i.e. State intervention to favour the larger operators.

    • sm
      Posted December 23, 2011 at 2:23 pm | Permalink

      Yes a little more competition & transparency would be useful.

      Perhaps the actual card processing fees incurred by the DVLA in this case should be clearly provided to the paying customer as a reference.

      The whole national payment infrastructure should be looked at to regulate it and ensure non-predatory pricing and to allow effective competition and that it can work when some institutions fail. The NEF issued a paper that touched on this in its submission to Vickers on banking reform.

      It would probably be better to scrap this fee and add this tax cost to the fuel tax collection mechanism.

      But taking a little slice here and there has always been the easiest option, its all stealth and guile. Like 0845/0870 and premium call numbers?

  14. David Price
    Posted December 23, 2011 at 11:21 am | Permalink

    If you really want to open Pandoras box consider this – most shops, supermarkets and petrol stations charge you the same price regardless of how you pay. Either the merchant is eating the credit card fee itself or it is charging everyone the cost of the fee whether it applies or not.

    As I don’t know which it is I always pay by credit card so I get points but perhaps it isn’t the cash and debit card payers who are actually getting ripped off …

    If you want to go after scams I agree with Peter T that it’s those people who try to coerce you into paying by direct debit by charging more for other methods who need looking into.

    • David Price
      Posted December 23, 2011 at 12:52 pm | Permalink

      Sorry, should have read – “As I don’t know which it is I always pay by credit card so I get points, perhaps it isn’t the credit card payers who are actually getting ripped off …”

    • Mark
      Posted December 23, 2011 at 1:55 pm | Permalink

      Banks charge businesses for cash deposits. That’s why supermarkets offer cashback at the till for those paying by card.

    • StevenL
      Posted December 23, 2011 at 3:44 pm | Permalink

      Most shops and service stations pose little or no section 75 risk to the finance companies. A furniture store or an airline on the other hand take payments long before the contract is performed. If they go under in the mean time, the credit provider becomes liable – see my comment below.

    • Bazman
      Posted December 24, 2011 at 9:27 am | Permalink

      I think Tesco charge about £0.60 for payment by debit card to a company they own.

  15. Johnny Norfolk
    Posted December 23, 2011 at 1:43 pm | Permalink

    Yet more regulation. It will please the credit card comanies so as to tempt you into even more debt.

    • outsider
      Posted December 23, 2011 at 10:35 pm | Permalink

      Agree. The answer to Mr Redwood’s tax issue is simply to pay by debt card. No charge for road tax etc

      • outsider
        Posted December 23, 2011 at 10:36 pm | Permalink

        Freudian slip. Meant debit card.

  16. John Wilkinson
    Posted December 23, 2011 at 2:14 pm | Permalink

    The E.U. rules are behind this and the government is only following the law determined by our rulers in Brussels.

    Wake up and seek the truth.

    • ken from glos
      Posted December 23, 2011 at 2:22 pm | Permalink

      Correct this is just another eu directive on the way from brussels and nothing to do with our so called Govt.

    • Denis Cooper
      Posted December 24, 2011 at 1:05 pm | Permalink

      Reuters says as much:


      and points to this Directive 2011/83/EU of 25 October 2011:


      Article 4 is particularly interesting:

      “Level of harmonisation

      Member States shall not maintain or introduce, in their national law, provisions diverging from those laid down in this Directive, including more or less stringent provisions to ensure a different level of consumer protection, unless otherwise provided for in this Directive.”

      So thanks to its own self-denying ordinance, the European Communities Act 1972 as amended, our sovereign Parliament is now legally obliged to protect us from credit card rip offs precisely to the extent laid down in this Directive agreed by majority voting which is overwhelmingly dominated by the votes cast by the representatives of foreign powers, not to a lesser extent and nor to a greater extent.

      Which means that there’s little point in the British public even debating the merits and demerits of the proposals, except to perpetuate the illlusion that what the British public thinks has some relevance to the matter.

  17. Bazman
    Posted December 23, 2011 at 2:24 pm | Permalink

    Why should any public or private sector business not charge for credit card transactions to cover their costs? The natural competition between the card companies will drive down the rates. What? You do not believe? How strange as you believe it will in any other scenarios? The airlines can add on what they like to their fares. I will still just use the cheapest overall. The rip of credit card interest charges are easily avoided by not running up debts on credit cards it is entirely your choice to use these cards to obtain funds you do not have do not blame the banks, governments or anyone else, it lies with you alone. Profiteering? again I do not understand where you are coming from as you do not see profiteering or exploitation anywhere else. Very mysterious. Self employed are due some sympathy as they have to adsorb the costs, but could just add it to their prices as the customer is choosing to buy products or services without adequate funds and choosing to pay for them on a card in full knowledge of the costs. Yes they do know as they get whacked every month or are choosing to be ostriches. The key word here is choice. Like you will have in buying healthcare or choosing to use a toll road. Which is a good thing.? Just don’t use a card to fund your choice.
    I think I have solved the mystery of why the contributors are squealing like stuck pigs when normally self reliance, common sense and other such virtues such as being financially astute are normally the answer.
    It’s because the issue affects you personally!

    • Bazman
      Posted December 23, 2011 at 10:38 pm | Permalink

      Ram it.

  18. Martin
    Posted December 23, 2011 at 2:28 pm | Permalink

    The Ryanair bashers are out in force today on all forums!

    My two round trips on Ryanair this year were on time, under £80 return and safe. I was not given “food/booze” I didn’t want or forced to subsidise other people’s luggage.

    Ryanair do something rare these days – make profits.

    • alan jutson
      Posted December 23, 2011 at 3:59 pm | Permalink


      I think Ryan Air have issued a press release today saying they do not charge fees for use of any credit cards, they simply charge an administration fee for all bookings, other than those made with a Ryan Air card.

    • David Price
      Posted December 23, 2011 at 4:00 pm | Permalink

      Just in case you are refering to my comment above (December 23, 2011 at 10:54 am) it was not my intention to bash Ryanair whatsoever.

      I had earlier watched Michael Ryan tearing humungous strips off the EU in an EU presentation on innovation in Brussels. As I was discombobulated by so many conflicting aspects of such an event and had never flown by Ryanair I had a look at the Ryanair fares and the supplementary fees – the one on reserving oxygen intrigued me.

      BTW I was very impressed by the chutzpah of the EU host in claiming that far from the bad EU imposing unfair trading practices on the smaller airlines they had actually been responsible for the favourable circumstances which enabled Ryanair to be created in the first place.

    • Shade
      Posted December 23, 2011 at 4:30 pm | Permalink

      I agree but I do wish Ryanair would front up with the real price they are charging in the price quoted for the fare. By all means charge an extra 2.5% or whatever it costs them to accept credit cards and I am not averse to speedy boarding and luggage as specific extras. Their total charges for a flight are still usually well below most other carriers so I think their customers would still use them if they were totally open about their fares -and perhaps so would others who, at present, are just too irritated by what they see (understandably but incorrectly imo) as a “rip off”.

      Mind you, I do rather like Michael O’Leary’s “up yours” attitude. Dan Hannan’s blog a day or so ago shows a great video of the man lambasting the Eurocrats at a presentation in Brussels. Well worth a look!

      Toodle pip

    • Bazman
      Posted December 23, 2011 at 6:08 pm | Permalink

      If you have a family and luggage then often it is cheaper and less hassle to fly with a normal carrier.

  19. StevenL
    Posted December 23, 2011 at 3:41 pm | Permalink

    People always assume that credit card surcharges are to make up for ‘transaction costs’, although there is sometimes another explanation.

    Credit card providers have joint and severable liability for breach of contract and misrepresentation under Section 75 of the Consumer Credit Act 1974. This includes where a business becomes insolvent before goods or services arew delivered.

    Hence banks make businesses who pose a big S75 risk fork out for a ‘bond’ to cover it. So credit card surcharges can be a way of discouraging people to pay by credit card (many cards give cash back remember) thus minimising the size of the bond. I know of one trader who was forced under in 2008 (although it probably would have happened anyway) when his bank demanded a £50k bond in respect of the credit card payments he was taking.

    The public sector pose no S75 risk, as taxes are not a contract. So they have far less an excuse for imposing these charges.

    • lifelogic
      Posted December 23, 2011 at 9:30 pm | Permalink

      It is a shame taxes are not a contract then we could all sue for the abject failure to deliver any worthwhile services of any merchantable quality.

  20. alan jutson
    Posted December 23, 2011 at 4:05 pm | Permalink


    If government want transparency on pricing, then surely the easiest solution would be to make it illegal to charge anymore than the headline advertised price for any goods or services, no matter how you pay, book/order.

    Making up regulation where you can still charge admin fees, booking fees, management fees, and “reasonable credit card charges” will just move the costs along to be listed under another heading, it will not improve transparency at all..

    I hear a government statement press release has already said they think their charges are reasonabe, so there will be no reduction of charge on their services.

    In a nutshell they have raised and sunk the proposition within 12 hours.

    You could not make it up, its not april 1st is it ?

  21. Darren
    Posted December 23, 2011 at 4:19 pm | Permalink

    I wonder if John can remember introducing the following legislation 20 odd years ago:

    The Credit Cards (Price Discrimination) Order 1990

    If it wasn’t for this little gem of a law, the card schemes would probably have moved to prevent their merchant members from adding surcharges.

  22. Sue
    Posted December 23, 2011 at 4:20 pm | Permalink

    Do not kid yourself it has anything to do with our government.

    Our Masters have spoken


    As always, Dr North is way ahead of you.

    • Bazman
      Posted December 24, 2011 at 9:20 am | Permalink

      Damned if they do. Damned if they don’t.

      • Denis Cooper
        Posted December 24, 2011 at 1:19 pm | Permalink

        As far as I’m concerned they’re damned just for existing, whatever they do or don’t do.

  23. HJBbradders
    Posted December 23, 2011 at 6:44 pm | Permalink

    What really takes the biscuit is when one buys foreign currency online, say from the Post Office (PO), let’s say to buy £100-worth of euros. The PO will, quite reasonably, only take a debit card. I don’t know about other banks but, if one uses a LloydsTSB debit card in this way, they demand an extra £5 on top of the currency price of the transaction. As far as the bank is concerned, why is spending £100 at the PO for currency any different from buying £100 of postage stamps? It can only be a penalty-charge for not buying the currency from them. Quite disgraceful.

    • uanime5
      Posted December 23, 2011 at 8:31 pm | Permalink

      Maybe this is why so many European countries want a single currency.

  24. Johnny Norfolk
    Posted December 23, 2011 at 7:10 pm | Permalink
    • Bazman
      Posted December 23, 2011 at 10:44 pm | Permalink

      Charge what they like. Paying is optional and always has been.

  25. Frances Matta
    Posted December 23, 2011 at 8:48 pm | Permalink

    Ryannair. ’nuff said.

  26. electro-kevin
    Posted December 23, 2011 at 11:02 pm | Permalink

    Water rates £900 pa

    Council tax £1300

    The speed camera in our town torched … priceless !

  27. James Sutherland
    Posted January 8, 2012 at 10:41 am | Permalink

    I was pleasantly surprised when the government almost entirely ended its own use of premium rate (084/087) phone numbers to rip taxpayers off. It’s disappointing Ofcom haven’t ended the trick entirely (they took action against 0845 and 0870 numbers – so of course those exploiting the loophole just jumped to 0844 and 0871 numbers instead), but a small step in the right direction.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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