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Wednesday, July 19, 2017

Ending EU rip-off card charges - another benefit of EU membership

Surely even this Brexit inclined Tory Government and their Labour Party Brexit allies cannot miss the irony of us leaving the EU at a time when the benefits of remaining for ordinary working people are becoming more and more obvious.

First the EU abolish mobile phone roaming charges for the many UK citizens who like to holiday on the continent, enabling us to make calls, send texts and use the internet without any extra charge, and now they have effectively got rid of those extra charges that are added whenever we pay for something with a credit card.

Of course the UK Government are trying to claim that they have enhanced the change by also banning charges for holders of American Express cards and users of services such as PayPal and Apple Pay, but essentially this is a European initiative that would not have come about if we had not been a member of the EU.

What is more, this change does not just affect that charging policies of companies such as Ryanair, EasyJet, restaurants and others, it also impacts on Government and local authorities, both of which have been 'ripping us off' for a little bit extra when we have used a card to pay our bills.

As the Guardian points out, these fees have been a moneyspinner for some government departments and official bodies. They will also be banned from imposing these charges:

The Driver and Vehicle Licensing Agency currently adds a flat fee of £2.50 to vehicle tax payments by credit card, and its own data has previously suggested that it collects more than £8.5m a year in these charges.

Similarly, HM Revenue & Customs charges a fee for paying a tax bill by credit card, which ranges from 0.374% to 2.406%, depending on whether it is a personal or corporate card – but, like the DVLA, it will no longer be able to do this from 13 January.

The practice, known as surcharging, is common practice across the country, said the Treasury, with many businesses and organisations charging people to make card payments, or for using other services such as PayPal. Many industries had already acted to absorb the cost and not pass these on to consumers, but these rules would bring an end to the practice entirely, added a spokesman.

There do not appear to be any recent official figures for how much these surcharges are costing consumers, but the government has previously calculated that credit and debit card surcharges totalled between £316m and £630m in 2010. It suggested a “best estimate” of around £473m for that year.

They add that a number of local authorities also impose handling fees when people pay for services by credit card. At Hammersmith and Fulham council in London the fee is 1.25%, while Richmond upon Thames charges 1.65%. Both councils said they did not profit from these fees.

The abolition of these charges are long overdue. Roll on January 2018. Thank goodness we had the EU to take the initiative.
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