Banks Exploiting Extra Credit/Debit Card Fee Loophole

simple123 | 23.07.2009 22:18 | Other Press | Social Struggles

BANKS EXPLOITING EXTRA CREDIT/DEBIT CARD FEE LOOPHOLE, Ryanair credit / debit card charges / fees

I DO NOT NEED A VISA ELECTRON CARD or other currently advertised accounts and credit cards to avoid Ryanair’s extra credit card charges/fees, IF I had the facility to pay for the product by cash or another option without paying extra fees on the credit card. Changing accounts, waiting for approval, passing on all my personal information again, costs money, time and is just forcing! me into another deal.
But Ryanair and now MORE AND MORE other companies (maybe even the banks owned by the governments who bailed out these banks?) do not offer the cash or other facilities to pay without extra charges anymore. It is not negative for the consumer to have no cash payment option (via internet), but it’s not fair, only to be able to buy the product with added extra charges!!!
This is not JUST about internet transparency, we as a consumer should have the right to pay for the product we are buying without the extra charges if no other facility offered.
Lets introduce an online payment facility to our employers, where they can only pay us via credit card, and find a deal with a credit card company and make extra money on our income!
This is why Ryanair has been taken to court by the German VZBV, where the judge ruled, that the praxis of adding these charges is illegal. The consumer should have the right of buying a product without paying extra charges. This should be published around the world. Read more on the website of the Federation of German Consumer Organization including PUPLIC COURT ORDER:

http://www.vzbv.de/start/index.php?page=themen&bereichs_id=7&themen_id=59&klag_id=604&subthemen_id=&task=klagen
And also see some samples what the: ryanair beeing banned.. article sparked across the world:

http://news.cheapflights.co.uk/2009/07/german-court-case-an-end-to-creditcard-fees.html

http://www.themovechannel.com/news/7809747b-fb15/

http://gospain.about.com/b/2009/07/13/ryanair-fees-court-case.htm

http://www.comparecarhire.co.uk/news/ryanair-loses-case-over-handling-charges-5385999.html

http://www.telegraph.co.uk/travel/travelnews/5796025/Ryanair-loses-handling-charges-case.html
The OFT wants to make it clear to the consumer, but does not seem to be interested of protecting the consumer from extra charges:

http://www.compareandsave.com/news/OFT-reacts-to-rising-credit-card-charges/

BBC Breakfast has mentioned the credit/debit card fee/charges discussion on friday the 17/th of july (about 8am), without telling the whole story about us being forced into changing acounts to avoid extra charges. They mentioned, loads of people commenting about ryanair,and finally advertised credit card companies and banks through Thomas Cook, to avoid these extra charges:

http://news.bbc.co.uk/1/hi/business/8156085.stm

We are now forced to pay extra for the products we are buying over the internet via credid card, and we have no other option ! FAIR???????????

simple123

Comments

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simple maths

23.07.2009 22:52

you arnt really paying extra. Its just a way of reducing the headline prices.

Its like when you buy a car and trade your old one in.
- Garage A might sell you a car for £4000 and give you £500 for your old one.
- Garage B might offer you the same car for £3700 but give you £200 for you old one.

You are paying the same amount, its just a way of packaging the finances up so it looks more attractive.

Ryanair can reduce their flights by £7.50 if they charge £7.50 on the credit card payment.
Its not rocket science. I cant believe you find it so complex......

max

Take business elsewhere

24.07.2009 00:22

If they wont accept cash or your payment method without levying extra fees, just take your business elsewhere. They will soon get the message.

gergv

Just another way of making easy money

24.07.2009 07:04

Odeon cinemas online/telephone booking use a company called Bookit ld, who charge a "card handling fee for processing".

This is 75p a ticket.... approx 12% of the price.

A bit of a trawl of Odeons setup and reports tells me that Bookit is a "wholly owned subsidary of Odeon cinemas".

Online and telephone sales account for 30% of Odeon ticket sales.

By my reckoning Odeon / bookit make around £9 million a year from this.

They can keep their headline prices down, pass off 12% of your price as 'security' (as in 'run for the hills, terrorists, danger, fraud etc) and all they have to do is attach a piece of software to their online / telephone booking system.
It would be interesting to see what proit margin Bookit ltd run, as well as any other 'in house' online card handling charges that the like of Ryanair et al use.

Bob

The Business Expense

24.07.2009 11:36

The increasing use of forced credit card transactions do two things for a business. First, they minimise the risk of payment failure. Second they reduce physical cash handling charges. This is a recommended strategy, by banks and the Big Four consulting firms to secure cashflow. In addition to the security of cashflow, there is a frequent recommendation that the banking transaction fee should be exposed and passed to the customer. This practice monetised the transaction process and ensures that costs of transaction are accounted for separately to profits. This has been recommended for about a decade as a way to maximise profits on "cash handling".

The fact that cash handling is your business expense and none of my concern does not worry Businesses that force credit card transactions. For the last decade there has been a bouyant economy and so businesses could afford to lose the few cash paying customers that existed. It is a failed business model, as many people are finding out, because it relies on technological mediations that do not respond to physical transactions.

The solution is very simple: complain to the Office of Fair Trading every time a company offers this kind of "service". It is not a service if it is forced.

Morlock

@ Max

24.07.2009 11:39

It is not a way of reducing the headline price. That is part of the German court finding. It is in addition to the price. Its not just Ryanair that does it. Try IKEA who actually admit it is a charge that they pass on from the bank. Its a way of increasing profit by shifting the transaction payment onto the punter.

A capitalist

Are people really this stupid ?

24.07.2009 12:40

All of the costs of doing business with an organisation are somehow and in someway passed to the buyer, this is how commerce works. Just because you can see this cost doesn't make it something you can argue against. If I was to detail the wages of the pilot as a percentage of the flight cost would you object to that as well ?

Capitalism is very simple, something is worth what enough people are prepared to pay for it, if your view is not that of the majority (and it's not) then hard luck. If enough people refuse to pay the cost of flying with these people then they will have to drop their prices or offer more for the same price.

I wonder of Indy should have some sort of intelligence test before allowing people to post ?

For heavens sake educate before posting

@ For heavens sake educate before posting

25.07.2009 14:17

The argument being put is that a capitalist business has a charge on credit and debit transactions. This charge can come from profits or this charge can be passed to the customer as a variable amount hypothecated to the payment of credit or debit charges.

Now: if your electricity company goes to the bank to deposit cash and the bank charges them £10, that is entirely their own affair. The company then passing that charge on to you - and telling you that they are - is placing you into an unsustainable and unfair contract. Yet it is common practice.

It is nothing to do with an ideological objection to capitalism. Even a capitalist can see that the enforced, hypothecated charges for financial transactions from businesses are a form of fraud. Even in capitalist terms these are fraud. There is no need to raise an ideological argument at all.

It is not about education but about theft, collusion and the lack of control people have over their own finances.

A Capitalist

max has it right - capitalism will screw you no matter what

26.07.2009 12:00

max has it right when he says it is just psychology, about reducing the headline price. All those adverts you see about flights to Australia for £1 or whatever are basically just bullshit. They may have one flight a year for that price, and even then they stack all the extra charges on top of it so it doesn't work out much cheaper than usual anyway. But by then they have you hooked in and you are less likely to go elsewhere. It's a standard "hustle".

The whole point of capitalism is to screw money out of you. They have to make a profit so if they stopped this charge they would just add it somewhere else. It's especially prevalent in the travel industry because there is so much competition and profit margins are so slender.

Worrying about things like this is pointless reformism. Not to mention all the destruction of our environment done by the airlines...

@n@rcho