OFT wants to ban `unfair' easyJet charges

The sneaky charges levied by airlines for paying with a debit or credit card are unfair and misleading, report finds.

The Office of Fair Trading has declared war on the card charges levied by travel companies, most commonly budget airlines like easyJet and Ryanair.

The OFT, which launched an investigation into the charges following a super-complaint by consumer champions Which?, has warned travel firms that they must change their ‘misleading’ charging practices, or else face enforcement action.

Drip-pricing

During its investigation, the OFT said it had uncovered  ‘considerable evidence’ of firms employing drip-pricing practices. This is where the additional charges are only unveiled once you are a fair way through the purchase process, having already gone through filling out a number of web pages.

Anyone who has booked a flight online with a budget airline will likely have experienced this – I know I have. It’s only once you have confirmed all of the details of the flight, from the airport to the times of the flights to how much baggage you will be taking, that the airline springs a couple of extra charges on you.

Suddenly that bargain trip isn’t looking like such a killer deal.

Indeed, here are the number of pages you need to go through for some of the UK’s biggest travel firms before the surcharge is added, according to the OFT’s findings:

Making a killing

It’s no wonder the airlines love this technique. The OFT reckons that UK consumers spent a whopping £300m on payment surcharges related to airlines in 2009 alone. They are making an absolute killing out of these sneaky charges!

While the OFT decided against explicitly naming the worst offenders, it did produce some examples of the practice. Unsurprisingly certain airlines were featured:

The OFT argued that these charges are misleading because of the way they come as a surprise, particularly as in many cases they are essentially compulsory, given that the way to avoid them – perhaps with the use of a specific type of credit, debit or prepaid card – is not open to more than a small proportion of customers.

No charges with debit cards

So what does it want to see happen?

The OFT has called for airlines to cease levying a charge when a customer pays with a debit card. So if you know you will be using your debit card to cover the cost of those flights to Dublin, the headline rate that caught your eye will indeed be what you have to pay at the end of the transaction.

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The danger of debit cards

However, when paying for something like a flight, I would always be very reticent about paying for it with the use of my debit card.

That’s because you enjoy far more consumer protection when using your credit card, thanks to Section 75 of the Consumer Credit Act. This clever little piece of legislation means that any time you use a credit card to cover part or all of a transaction which costs more than £100, if something goes wrong, your credit card provider is equally liable, along with the retailer you spent the money with, to recompense you.

In the travel arena, this is particularly important, as the last couple of years have seen a number of travel firms go bust, leaving thousands of tourists stranded across the globe. By using your credit card to pay for your tickets, you know that you’ll still be getting money back (as well as help getting home), which won’t be the case if you stick it all on your direct debit.

What happens next?

Back when Which? launched its initial super-complaint, some firms realised the game was up. For example, Monarch ditched all fees on debit cards, and introduced a flat fee for using a credit card, as we highlighted in Ryanair trumped by zero-fee airline.

Its competitors may have dragged their feet, but with the prospect of enforcement action, others will now surely follow suit. The battle over sneaky charges looks to finally be over.

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