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OFT forces transparency of debit card charges on flights
July 6th, 2012 by elisa

The Office of Fair Trading (OFT) has responded to a ‘super-complaint’ by Which? to force airlines to change their pricing policy when it comes to debit card charges.

Many airlines have sprung debit card surcharges onto customers towards the end of the booking process, making the flight higher than first thought and difficult to realistically compare flight prices between airlines.

So far many airlines have changed their policy to include the surcharge in their headline flight price, these include Eastern Airways, Easyjet, Flybe, German Wings, Lufthansa, Thomas Cook, Thomson (TUI) and Wizz Air. The remaining airlines have until 1st August this year to do the same.

OFT chief executive Clive Maxwell said: “This is a great outcome for the millions of people who buy flights online.

“It is important that the cost presented when they search for a flight is realistic and that they are not surprised by extra charges. Otherwise it is harder for them to shop around for the best deal.

“We made it clear from the start that we would use all of our enforcement powers, including court action if necessary, but are pleased to have reached agreement with the airlines before court proceedings were required.”

Passengers should still read the headline prices carefully however. Easyjet lists the charge below its list of headline prices on flights per destination, which is within the new rules. The reason for this is that Easyjet now charges £9 per booking, and not per flight; so it is not going to be more expensive for a flight booking for two people than it is for one person.

Martin Lewis, creator of the website Moneysavingexpert.com said: “As that charge is flat, regardless of how many tickets you buy (though it costs more if using a credit card), it can’t be easily incorporated in the headline price. So Easyjet displays its adverts incorporating this based on two travellers, meaning the price listed is too high for families and too low for sole travellers.

“Then go to its flight page and if the big bold price for a flight listed is £34. Pay by debit card, and the total price due to the added transaction fee is £43.

“What people really want is one price for a flight, that includes all genuinely unavoidable charges.”

The move has been welcomed by Skyscanner, the flight comparison website which already includes card charges in its flight results. Gareth Williams, co-founder and CEO said:”We believe it’s important that pricing is as transparent as possible so that consumers are aware of the true cost of their flight. It is great that these 12 airlines will now be incorporating card charges into their pricing and we hope other airlines will follow suit.”

Following OFT recommendations last year, the Government has announced plans to bring forward legislation to ban excessive debit and credit card surcharges across the economy. Which? estimates that the cost to the retailer is 10p to 20p per debit card transaction, and the OFT estimates that debit and credit card surcharging in the airlines sector cost consumers £300 million a year.

 

What do you think about this change? Does more need to be done? Please post your comments below.

 


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