Martin admits he cannot ban credit card surcharges

MINISTER FOR Enterprise Micheál Martin has withdrawn a plan to ban credit surcharges because, he says, the move would not be compatible with EU law.

The U-turn has been strongly criticised by the Opposition and consumer groups who said hopes that unpopular surcharges were to be outlawed had been raised unnecessarily and unfairly.

Last May, Mr Martin announced that, as part of the Consumer Protection Act (CPA), restrictions on credit card surcharges would be introduced. When the Act became law, the Minister stopped short of immediately enforcing the ban because, he said, a period of public consultation was required.

At the time he insisted he was fully committed to implementing the ban and said he expected the consultation period to conclude in October.

However, responding to a Dáil question from Fine Gael’s enterprise spokesman Leo Varadkar yesterday, Mr Martin admitted that, on the advice of the Attorney General, he would not be in a position to implement the ban as planned.

He said his department had received almost 50 submissions in relation to the impact of the surcharge ban and said some of those submissions had given rise to “complex matters” which required legal advice.

He said the advice he had received from the Attorney General’s office was that the proposed ban was incompatible with the “maximum harmonisation nature of the Unfair Commercial Practices Directive”.

The EU directive, which was introduced in 2005, is intended to protect consumers against unfair, misleading and aggressive commercial practices. Member states are not allowed to extend or exceed the provisions of a “maximum harmonisation measure” which, it is understood, the ban may have done. Despite yesterday’s announcement, Mr Martin insisted that he was “committed to the importance of consumers being aware of the fact that a trader imposes an additional charge based on the method of payment.” He said the department was currently examining the possibility of making regulations under the CPA which would oblige retailers who imposed payment method charges to include information in relation to those charges in any advertisements.

Mr Varadkar accused the Minster of hiding behind the Attorney General in order to renege on his prior commitment to ban the surcharges and called for the ban to be introduced “and let someone challenge it in the courts”.

“This is pretty shoddy and a real cock-up on the part of the Minister,” he said. “How did he not know that the ban was not in compliance with EU legislation before he introduced the Act last May? Surely one of the basic functions of Government is to make sure that the laws it brings before the Dáil are compliant with existing laws.”

Consumers’ Association of Ireland chief executive Dermott Jewell said it was an insult to consumers to suggest that the Minister had not been made aware of potential legal problems with the proposed ban before the legislation was introduced last May.

He said the association had contacted the Department of Enterprise in 2006 and made it aware that introducing a simple ban on surcharges would be legally problematic. “It is wrong to suggest that the Minster has only just been made aware of this. We now have wasted two years going absolutely nowhere,” Mr Jewell said.

He described the Minister’s announcement as “very frustrating” and said it was “insulting to consumers to suggest that it will be sufficient for traders to make consumers aware that surcharges existed before they commit to a purchase.”