The Australian Competition & Consumer Commission has chosen a big target as the first company to be litigated under new excessive surcharging rules.
The ACCC has instituted proceedings in the Federal Court against CLA Trading (trading as Europcar) for allegedly charging excessive credit card and debit card payment surcharges.
Europcar is alleged to have imposed excessive surcharges on customers who used:
- Visa or Mastercard credit cards during July and August 2017
- Visa or Mastercard debit cards between July and 5 November 2017
“The ACCC alleges that the amount overcharged ranged from at least 0.18 percentage points to as much as 0.65 percentage points for different cards and time periods,” according to an ACCC statement.
“Europcar also did not reduce its surcharges despite being notified by its bank in July 2017 of the actual cost to accept payments by these cards. Instead, it is alleged Europcar continued to charge customers in excess of this amount, in breach of the law.”
The ACCC’s proceedings relate only to the 96 Europcar outlets that are owned and operated by Europcar, not the 30 run by franchisees.
“The ACCC’s action serves as a warning”
ACCC chair Rod Sims said he was concerned by Europcar’s alleged behaviour, given that the company would’ve known from at least July 2017 what surcharges to impose.
“Businesses must not charge customers more than it costs them to process a card payment,” he said.
“The ACCC’s action serves as a warning that the ACCC is paying close attention to those businesses who seek to overcharge customers making payments by credit or debit cards.”
The new rules around excessive surcharging took effect on 1 September 2016 for large businesses like Europcar and from 1 September 2017 for other businesses.
Banks and other payment processors are required to provide businesses with statements that clearly set out the business’ cost of acceptance for each payment scheme. This requirement was introduced to help businesses easily determine their costs of accepting card payments.