Plan to ban credit card surcharges hits setback
Legal issue halts legislation
MOVES to crack down on contentious credit card surcharges have been delayed.
A legal issue has meant plans to bring in legislation to ban the controversial handling charges by the end of this year have been put off.
Aer Lingus charges €6 for handling credit card payments, while Ryanair imposes a fee of 2pc on the value of flights bought, in addition to a €7 administrative charge per flight, per person.
Jobs and Enterprise Minister Richard Bruton has been trying to bring in new laws, to comply with a new EU directive, to target the surcharges.
But lawyers have encountered legal difficulties trying to produce legislation to give effect to the directive. The directive has to be made law in the EU by June next year, but the minister had hoped to bring it in earlier.
A spokesman for the minister said he was frustrated at the delay caused by the legal issue, as he wants greater protections for consumers.
"The minister has recently received legal advice on this issue from the Office of the Attorney General.
"The advice available states clearly that, due to the wording used in the EU Directive, application and enforcement of the Directive by secondary legislation in advance of the implementation date of June 2014 could be successfully challenged under domestic constitutional law."
A spokesman for Ticketmaster said the new rules, when they come in, may not lead to an immediate lowering of prices as its service charges cover a range of costs from posting out tickets to security issues.
A spokesman for Ryanair said: "This will have no effect on Ryanair as our optional credit card fee is already compliant with EU regulations."
The EU Consumer Protection Directive is designed to ensure payment charges are not used as an additional revenue source by traders.
Instead, the charges must reflect the real cost of processing the transaction, and must be transposed into Irish law by December this year. The new laws must apply from next June.
Government officials claim the average service charge for small businesses in Ireland for credit card transactions is between 1.5pc and 2.5pc of the total charge, and 15c-50c for laser and other debit card transactions. It is believed large businesses pay even lower rates.
The new legislation will also oblige traders to seek the express consent of consumers for any extra payments in addition to the main transaction.
In effect, it will prohibit tick boxes on websites which consumers have to reject in order to avoid additional payments such as insurance.