RYANAIR HAS rejected a ruling by the UK’s consumer and competition authority that it should stop imposing a £6 charge on flight bookings that appears only after customers log their credit and debit card details, even though the regulator has warned that it could take legal action.
Following a three-month investigation, the Office of Fair Trading described the fees as “hidden rip- off surcharges”, pointing out that British customers paid out £300 million in such charges to airlines, including Ryanair and other travel companies, every year.
Such fees should be included in the price from the beginning of the transaction, the authority said, although it urged the British government to pass legislation quickly to block the imposition of any charges on debit card payments.
Credit card surcharges, properly flagged, should be allowed because they were more expensive to handle, said the authority.
Ryanair imposes a £6 charge for each flight. It said yesterday it would not yield to the authority’s threat because the existence of the charge was made clear on its web page.
The charge was not a fee for using debit or credit cards, a spokesman told The Irish Times, but rather was an "administration fee" required "to defray the substantial costs associated with our booking system". In addition, the fee could be avoided entirely by using a Ryanair-approved debit card, he said.
Cavendish Elithorn, senior director of the authority’s goods and consumer group, warned that legal action would be taken against any company that failed to comply, adding that internet retailing had brought massive benefits, “but people are frustrated about being asked to pay for paying.
“Consumers find it harder to shop around and find the best deal if they have to invest time and effort in discovering surcharges,” he added. “This also weakens competition between retailers which is bad news for the UK economy.”
Monarch Airlines has already scrapped its debit card fee following the Office of Fair Trading inquiry, which was prompted by a complaint from consumer magazine Which?Its chief executive, Peter Vicary Smith, urged companies "to be upfront and fair" and not "drag their feet" before complying.
Responding to demands for speedy action, British consumer minister Edward Davey said it would work with the authority and the European Union to ensure that customers were not faced with “excessive surcharges”.