RateCity, Australia’s leading financial comparison website, today welcomed the Federal Government’s pledge to ban excessive surcharges on credit card payments but warned its success would be dependent on the regulators’ ability to enforce such a ban.
RateCity chief executive officer Paul Marshall said that while most merchants do the right thing, some businesses continue to apply seemingly excessive fees at the point of sale, leaving customers feeling cheated.
“We welcome today’s announcement by the Federal Government as a step in the right direction but further details are needed to better understand how this ban might work,” he said.
“Changes introduced in 2013 largely failed to stop consumers getting unfairly charged at the point of sale because the system was difficult to regulate and enforce.
“It’s important this new ban is practical, otherwise customers will continue to be price gouged.
“Not every merchant is adding a little cream to the surcharge payments but a number of high-profile examples have attracted national attention and consumers are understandably angry.
“Today’s announcement that the ACCC will have the power to enforce the ban on excessive surcharging is essential to stamping this practice out.
“We also look forward to further details following on from the Reserve Bank’s review of card payments as to how reasonable costs will be determined.”
Marshall also welcomed the government moves to strengthen the stability of our banks but noted that consumers would be wary of any bank trying to use these measures to unfairly increase rates.
The RateCity site saw a 25 percent increase in traffic immediately following last Wednesday’s rate hike announcement by Westpac.
“This jump suggests that Westpac customers haven’t taken the news of the rate increase lying down.
“The take out from this is that customers are taking an active interest in their interest rate which is great to see.”
A 0.20 percentage point increase to the basic variable rates of the major banks represents an additional $429 a year for the typical home loan borrower, RateCity data shows.
Marshall said the Federal Government’s commitment to review the transparency and efficiency of the superannuation system was another win for consumers.
“Two of the biggest challenges in the superannuation sector are member engagement and a lack of awareness around fees,” he said.
“The Federal Government is right to have singled these out and we look forward to seeing what the Productivity Commission can develop to improve awareness and increase engagement.”
RateCity’s super tool is one of the most comprehensive of its kind in the Australian market, allowing consumers to analyse fees, performance, investment allocation, insurance cover, and other features from over 600 funds, based on underlying data supplied by SuperRatings.