Labour challenges regulator on credit card surcharges

Thursday 11th February 2016

Labour Party MPs challenged the chair and senior managers of the Commerce Commission to be "more proactive" in their pursuit of consumer issues, with MP Clayton Cosgrove highlighting what he said were uncompetitive surcharges on credit transactions.

In a select committee hearing to review the competition regulator's annual report, Cosgrove claimed a range of businesses, including airlines, hotels, taxis, communications service providers and travel agents, as well as local authorities, were charging "over the odds" and recovering far more than the cost of the transaction.

"I can't understand why you aren't being proactive," he said to commission chair Mark Berry, claiming that he was approached regularly by businesspeople who wanted to see the commission "dance around with a cattle prod" to deter unjustifiably high transaction surcharges.

The issue didn't rest with the banks or credit card companies themselves, but with retailers and local authorities who felt able to charge high fees.

"No one's scared of you," he said.

However, Berry said it was unclear what legislation the commission could use to attack such charges, since the industries given as examples were all in competitive sectors.

By far the largest part of the commission's "litigation docket" was court action under the Fair Trading Act, but action under that law could only be pursued on credit card transaction surcharges if they were not being clearly and accurately disclosed to customers.

"I'm not aware that there are any complaints that we have received," said Berry. "These people are operating in a competitive market. I just wonder under what laws we can actually attack it."

BusinessDesk.co.nz

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