Prohibition of surcharges

19 Jan 2018

New rules, which came into effect on 13 January 2018, prohibit traders from applying a surcharge on consumers, in addition to the advertised price of the goods or services in question, on the basis of a consumer’s choice of payment method.

The prohibition applies where:

  1. The payment service provider of both the payee and the payer are located within the European Economic Area; and
  2. The surcharge relates to one of the following payment means:
  • Consumer credit cards, debit cards or charge cards;
  • Similar payment methods that are not card-based (for example, mobile phone-based payment methods); or
  • Electronic payment services (for example, PayPal).

The new rules apply regardless of whether the payment is in relation to a contract or whether it is an instore or online transaction.

Although the new rules do not apply to commercial payments (i.e. commercial debit or credit cards), the rules do prohibit traders from charging customers more than the direct cost borne by them for use of the relevant means of payment.

The rules entitle customers to receive a refund of any unlawful surcharge they have paid and enable customers, if necessary, to take legal action to recover any such surcharge.