Ryanair and Easyjet’s credit card charges have dropped considerably, but British Airways’ haven’t

Not strictly a post about points or miles, but still worthy news, if a little belated.

The European Union has long agreed that excessive credit card surcharges and fees must be reined in, with low cost carriers (LCC) being the worst serial culprits. The EU Directive on Consumer Rights 2014 states that purchases with credit cards must no longer carry surcharges more than the actual cost to process the payment. Implementation across all European Union member states must come into force by June 2014.

Well the UK's government decided to act quicker than usual and last week, 6th April 2013, nearly all companies had to comply with the EU directive. Easyjet had to comply because of their UK registered address, but Ryanair's registered office is in Dublin (which for the uninformed is NOT in the UK!). I can't find a link to state what the Republic of Ireland's implementation date. In any case, if you try to book a ticket you will notice that the credit card fees have dropped to around 3%.

To be honest I'm surprised that the LCCs haven't made a positive headline out of it because it'd be music to the (gullible) consumer's ears.

Why does this matter? Well because under a different law, Section 75 of the Consumer Credit Act 1974 in the UK, for the purchase of goods over ?100 which involve a credit card, the credit card company is equally liable for the purchase of goods as the company that provides it. (Even if you pay ?1 by credit card, and ?99 by debit card, the Section 75 protection still applies. Remember this next time you buy a second hand car!). Consumers can claim directly from the credit card company if there's a breach of contract…for instance a big delay and requires you to buy another flight to meet connecting flights. (Don't forget that you are still protected under European Union Air Passengers' Rights too.)

This means that you can activate this Section 75 protection at a much-reduced cost compared to Ryanair and Easyjet's previous charges. I don't remember the exact number it was before, but something in the region of “?6.95 per person per flight/itinerary or 5% whichever was greater”. Now buying two ?50 tickets will cost ?3 in surcharges compare to the ?14 before (assuming ?6.95 was the right number!). The Financial Ombudsman Service provides an interesting example, number 86/05, of the level of coverage afforded by Section 75. I'd read number 86/06 for a laugh too!

Perhaps more interesting is British Airways' refusal to conform to new rules. They are still charging a flat ?4.50 per person for credit cards and PayPal, even for tickets that cost less than ?50. This number doesn't change even for a ticket that cost ?800. If ever there's evidence of a clear breach of the rules set by the Office of Fair Trading, this is it.

Sooner or later BA will have to drop it because such a large company won't go unnoticed. I'd like to see what penalties they receive if any. Perhaps they'll add an extra few pounds to the dreaded fuel surcharge to reclaim revenue?

Do you have any information to add to the above? Please feel free to leave a comment below.