Thursday, 5 July 2012

Airlines’ Decision To Headline Debit Card Surcharges Welcomed By Cambridge MP

A decision by major airlines to headline their debit card surcharges has been welcomed by Cambridge MP Julian Huppert who pushed the government to act on the issue.

The move by 12 airlines, including Easyjet and Ryanair, to include the charges up front, came after enforcement action by the Office of Fair Trading.

Julian secured a House of Commons debate on the issue in December calling on the government to change the law to prevent companies adding hidden surcharges to their prices.

He warned that the surcharges had become a business model in their own right seriously undermining legitimate economic growth.

And he said that a study by Which? magazine found that in 2004 the low cost airline, Ryanair charged its customers 80 pence to pay by debit card.

“This decision to put by the airlines to put their debit card surcharges in headline prices means that passengers can book with confidence knowing that the headline price is the total price – there should be no last minute surprises at the end of the booking process,” he said. “This is long overdue and I hope the government will act swiftly to force other companies to do the same.  

“When consumers buy goods they do so in the belief that the price is fair and that they have a good deal. So when hidden surcharges are added at the end, they come away feeling wronged and the incentive to buy is greatly reduced.

“That is compounded by the fact that businesses are incentivized to think of new ways to get away with hidden costs, rather than delivering desirable products or services at the cheapest possible price. Prices go up and innovation is throttled, harming society as a whole.”

During his Commons’ debate, Julian commented on the rise in online shopping and warned the government that if it wanted to drive economic recovery it should pay close attention to internet trading.

Julian’s speech in the House of Commons’ debate on credit and debit card surcharges on December 20, 2011 can be found here.