Qantas charts a dodgy flightpath on surcharges

[box border=”full”]CHOICE says a slight reduction of some surcharges still leaves consumers paying sky-high fees that flout Reserve Bank rules.[/box]

While any reduction in astronomical surcharges is welcome, CHOICE would like to see Qantas’ credit card surcharges fall to reflect actual processing costs.

Reserve Bank of Australia (RBA) data suggests the average fees paid by merchants to process Visa and Mastercard transactions are less than 1%.

“It’s now 99 days since the RBA rules came into effect and in this time, despite the latest move from Qantas, the worst excessive surcharging offenders – Cabcharge, Qantas, Virgin Australia, Jetstar and Tiger – have continued charging Australians millions more in surcharges than it costs to process these transactions,” says CHOICE CEO Alan Kirkland.

“We would like to see Qantas’ latest claims – as well as Cabcharge, Virgin Australia, Jetstar and Tiger – tested against the costs of processing these payments rather than just taking their word for it.”

“Qantas has spent years insisting that they don’t collect more in surcharges than it costs to process the payments, so we can only conclude from Qantas’ latest statement that they have been hoodwinking consumers all this time in a bid to bolster company profits,” says Mr Kirkland.

“If anything this shows that consumers can’t take Qantas’ word on surcharges and a transparent, independent assessment is essential.”

“Any assertion from Jetstar that it does not charge a surcharge is shonky at best. The simple rule for consumers when it comes to additional charges is that if it looks like a credit card surcharge and works like a credit card surcharge, it’s a credit card surcharge.”

A recent survey commissioned by CHOICE also found that close to half of Australians who reported paying a credit card surcharge say they were not offered or made aware of an alternative, surcharge-free payment method.(1)

“Consumers are eagerly awaiting the response from the Commonwealth Consumer Affairs Advisory Council after the Federal Government’s intervention last month. Excessive surcharges continue to deliver a real sting in the tail for consumers, turning what looks like a bargain into something more expensive.”

CHOICE is calling on Australians to ‘dob in a dodgy surcharge’ by going to and sharing examples of excessive credit card fees.

(1) CHOICE commissioned a nationally representative survey of 1,045 online Australians between 23 and 26 May 2013. The survey questions were part of a weekly omnibus conducted by Essential Research. When the 79% of respondents who reported using a credit card in the last 3 months were asked “At the time you last paid a credit card surcharge, were you offered or made aware of an alternative payment method that did not attract a surcharge?” 44% answered “No”.

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