The Government is to ban retailers from levying extra charges on consumers for paying by credit card or failing to pay by direct debit.
Under legislation expected to pass through the Oireachtas within weeks, traders will be prohibited from imposing extra charges on consumers based on their method of payment - be it cash, credit card, direct debit or any other prescribed method.
The change unveiled by Minister for Enterprise, Trade and Employment Micheál Martin yesterday follows controversy over the decision by cable firm NTL to impose a €2 per bill charge from next month on customers who do not pay by direct debit.
New regulations will also force traders to provide information on the full price of goods and services. This measure will require airlines and concert promoters, for example, to include all charges and fees when listing prices.
Industry group Ibec last night condemned the surcharge ban, saying it would have the "perverse" effect of increasing costs for the consumer by preventing businesses from passing on discounts to consumers who paid by more cost-effective means such as direct debit.
However, Labour and Fine Gael warmly welcomed the proposal, which Mr Martin introduced yesterday during committee-stage consideration of the Consumer Protection Bill. As a result, the Bill is likely to pass all stages in the Oireachtas in time before the election is called.
Mr Martin told TDs he was satisfied there was no reason to discriminate against consumers on the basis of method of payment. Surcharges could become hidden and built into higher prices. Most forms of payment involved some form of cost, he pointed out. The use of cash, for example, incurred bank charges and security costs.
NTL's decision to penalise customers who don't use direct debit provoked a furious public response but was likely to be copied by other traders. Under pressure, NTL has agreed to exempt pensioners from the charge.
Some retail outlets also impose a surcharge on customers who pay by credit card because they, in turn, have to pay charges to the credit card companies. Ryanair, for example, charges €2.50 per passenger per flight for Visa card-holders.
Mr Martin said current regulations on the display of prices had to be examined to ensure transparency for the consumer. The stated prices of concert and air tickets were often "meaningless" because other charges were not included.
The Telecommunications and Internet Federation (TIF), an Ibec subgroup, said the Minister's amendments would force prices to be artificially the same, even when the costs of alternative methods of payment were different.
"The proposed amendments will prevent businesses from passing on discounts to consumers who choose to pay by more cost-effective means, such as a direct debit, even though the cost of providing the goods or service is lower," said TIF director Tommy McCabe.
"Cashless transactions such as direct debits are far more efficient for most businesses: they lower security costs, staff costs and the risk of bad debts. If the proposals are accepted, businesses will be prevented from passing on these savings to customers. That is unfair and inefficient," he said.
"These amendments to the Bill have come at a very late stage in the process, with no opportunity for consultation with industry. They have not arisen from the Consumer Strategy Report that was the intended basis of the Bill and certain amendments create more problems than they solve."
The Bill provides a statutory basis for the new National Consumer Agency (NCA) and imposes stiff fines and jail terms on rogue traders. The Minister undertook to examine the composition of the NCA board following discussion of a Labour amendment to give a nominated consumer group the power to appoint three of its 12 members.
Fine Gael's Phil Hogan pointed out that the Consumers' Association of Ireland, which had made a major contribution to consumer issues, had no statutory input. "Paddy the Plasterer has a better chance of getting on this body than the Consumers' Association."