'Millions' hit with illegal credit card charges

Shops are charging cardholders for purchases despite the practice being banned back in January, according to new research.

On 13 January a new law came into effect that made it illegal for retailers to charge customers extra if they wanted to pay with a credit or debit card. Prior to that companies had charged as much as 20% more if you wanted to pay with plastic.

At the time, I wrote about how I was sceptical that companies would happily take a hit to their profits and cut those charges.

Turns out I was right: little over a month on and many shoppers are reportedly being hit with credit card charges despite the change in the law.

Research by consultancy firm Consumer Intelligence found that 14% of shoppers had been charged an additional fee to pay with a credit card online or in store since the law change came in.

While it's worth stressing that the Consumer Intelligence research was based on a survey of 1,000 so can hardly be called categorical, there is little doubt that many firms are simply flouting the law.

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Getting around the law

The survey also found that customers were being charged a whole host of alternative fees, instead of the now illegal card fee, with booking fees, transaction fees and administration charges all springing up so that companies can continue to charge you for the privilege of paying with your plastic.

Of those surveyed, 21% reported being charged a booking fee for using a credit card since 13 January when the law changed.

Meanwhile, 13% had been asked to pay a transaction fee and 13% had been asked to pay an administration charge.

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Consumer group Which? has also reported that firms are looking for ways around the law with it hearing of people still paying fees, or facing minimum spending limits, or simply being told they can’t pay with their card.

“This ban was introduced to finally stop consumers being penalised simply for using their card,” says Gareth Shaw, a Which? Money spokesperson.

“However, we are hearing stories of people still paying such fees, facing minimum spend limits or being refused card usage altogether.

“The Government and regulator need to closely monitor the impact of the ban – and the fees banks charge retailers for card payments – to ensure that it has the positive impact for consumers originally intended.”

Have you been charged a credit card fee since the change in the law? Tell us about it in the comments section below.