ACCC takes action against Europcar for excessive card payment surcharges

The ACCC has initiated proceedings in the Federal Court against CLA Trading Pty Ltd ( Europcar) for alleged excessive credit card payment surcharges of up to 1.43%. This is a timely reminder for business that a 1.43% surcharge, although perhaps seeming reasonable, might not be.

The rules are very simple.

Rule 1: You can only charge customers the actual cost to your business of utilising that type of payment facility.

Rule 2: when in doubt, refer to Rule 1.

As excessive credit card payment surcharges are an area of focus for the ACCC, there is no room in the law for businesses to simply pick a number for their surcharge. For example, if the true cost is only 0.8 per cent, a surcharge of 1 per cent is unreasonable – there is no rounding up.  In the Europcar matter, the ACCC alleges the amount overcharged ranged from at least 0.18% to as much as 0.65% for different cards and time periods.

Earlier this month, Cruisin Motorhomes Pty Ltd also paid a $12,600 penalty after the ACCC issued an infringement notice for excessive payment surcharges. In this case, Cruisin Motorhomes charged customers a 2% surcharge which was above the actual cost of the credit payment facility.

If you require assistance reviewing your business’ terms and conditions and payment surcharges to ensure compliance with the Competition and Consumer Act, please contact Macpherson Kelley.

This article was written by Aylmer Low, Lawyer – Commercial.