Travel companies have been ordered to end the use of hidden surcharges for passengers paying by card.
Airline, ferry and rail passengers typically have to click through four to six pages of an online booking before the charge is added to the price.
Now the Office of Fair Trading (OFT) has ordered them to make all debit or credit card charges clear immediately.
It also wants the law changed to abolish altogether charges for using debit cards.
The OFT said travellers spent £300m on card surcharges in the airline industry alone in 2010.
It warned that if travel firms did not comply, it would take action against them, using consumer protection laws.
“We will take enforcement action against any businesses that do not respond to today’s announcement and instead continue to use misleading surcharging practices,” said Cavendish Elithorn, of the OFT.
Super-complaint
The OFT’s announcement comes in response to a super-complaint by the consumers’ association Which?.
Earlier this year it had called for customers to be told upfront about charges.
It had also argued that charges to customers should be the same as the cost to retailers, and that retailers should absorb the cost of debit card payments.
Which? had pinpointed low-cost airlines as the worst offenders, with cinemas, hotels and even some local authorities starting to copy them.
Peter Vicary-Smith, chief executive of Which?, said the OFT’s report was a victory for consumers.
“We want to see the measures recommended by the OFT put in place as quickly as possible and finally put an end to the practice of card surcharging,” he said.
“Businesses can start to be upfront and fair over card charges today – there’s no point waiting until the OFT forces action.”
Consumer minister Edward Davey said: “We will work with the OFT to make sure that consumers paying by card do not have to pay excessive surcharges.”
He added that the government was supporting the introduction of European rules, which would stipulate that surcharges must reflect the costs to businesses. It could be up to two years before these are adopted in UK law.
‘Paying for paying’
Airline Easyjet charges a surcharge of £8 for payments by debit card and £8 plus 2.5% of the total transaction for credit card users, the OFT’s report said.
An Easyjet spokesman said: “We would like to see card charges incorporated into the headline fare, however, for consumers to benefit there needs to be a level playing field.
“The only way to ensure consumers can make easier price comparisons is if a common treatment of card charges can be agreed across the whole of the transport sector in Europe, including train operators and online travel agents.”
Ryanair charges a fee of £6 per journey for both credit and debit card users.
Ryanair responded to the OFT’s move by arguing that its administration fees, which include card charges, were optional and “fully avoidable” for customers using a pre-paid card.
But the OFT said that for many people charges such as these were, in effect, compulsory.
