Airline debit-card fees being investigated by u.K. Regulator
Britain’s Office of Fair Trading opened a formal probe into airlines that ignored a request to increase transparency of the fees they charge for using debit and credit cards to buy tickets online.
The OFT requested information about surcharge practices from “a number of airlines” to determine whether they’re complying with consumer protection legislation, the London-based competition watchdog said on its website today.
The probe was opened in response to a complaint filed with the OFT in March by Which?, a U.K. consumer-rights group that singled out retailers, taxi services and low-cost airlines such as Ryanair Holdings Plc. The association argued that many fees exceed the cost of processing card payments.
“Since Ryanair don’t levy either credit card or debit card fees, we do not believe that this investigation or its outcome will have any effect on us,” the Dublin-based airline said today in an e-mailed statement.
The OFT said in June, following an informal probe of the practice, that debit-card fees should be included in the posted prices of airline tickets and credit-card fees should be more transparent. The formal probe involves airlines that haven’t met those minimum requirements.
12-Pound ‘Administration Fee’
Ryanair, which charges 12 pounds ($19.30) for using a debit card to buy a return ticket online, calls the levies “administration fees.” The airline says they cover costs for its booking system, not just payment processing, and can be avoided by using a pre-paid MasterCard instead of a regular credit or debit card.
U.K. consumers spent 300 million pounds in 2009 on such charges, the OFT has said. If companies involved in such probes don’t offer concessions, the regulator can take the dispute to court, where judges can impose unlimited fines.
The investigation is part of the regulator’s “intention to tackle those individual retailers whose practices it considers are causing significant consumer detriment,” according to the OFT website.