'Rip-off' credit card booking fees may end
The days could be numbered for 'fake fees' - excessive card charges applied on low-cost airline flights and other tickets.
Taken for a ride: Flybe refused to refund Sanjay Gunatra's card fees after a cancelled flight
The Office of Fair Trading is due to report the findings of its inquiry into the practice within weeks.
It follows a 'super complaint' by consumer lobby group Which? about the charges, which in some cases are as high as £12 per person for each booking.
Which? wants to see the regulator crack down on the charges, which in many cases bear no resemblance to the cost to the airline or other businesses of processing the payment.
Pressure is growing on the low-cost airline sector to change its charging structures and become more transparent.
Monarch this month scrapped the 3.5% charge it had applied on debit card payments. Chief executive Conrad Clifford said there was no justification for such charges.
But it is not only the transaction fees that anger consumers. The refusal of most airlines to refund card charges when a flight is cancelled, for example due to scheduling problems or bad weather, is a growing annoyance.
Management consultant Sanjay Ganatra, 45, from Southampton, has been fighting Flybe for almost a year over the airline's refusal to refund his transaction fees.
He was due to fly from Leeds to Southampton with Flybe last September, but the airline cancelled the flight due to a technical problem and he was forced to take the train, a four-and-a-half-hour journey.
But while Flybe refunded his £150 ticket cost within two weeks, it held back £13 in card transaction fees. This was for two £6.50 charges because Sanjay had rebooked his ticket once to change the original departure time.
Top tip: How to beat Ryanair fees
Flybe charges all passengers a £4.50 transaction fee. This is for each person for a one-way journey unless they pay using a Visa Electron card.
Electron is a rarely used debit card issued with some basic bank accounts. But there is a minimum transaction fee of £5.50 per booking so those travelling alone, like Sanjay, must pay £5.50.
And if you want to pay by credit card, as Sanjay did, there is a further charge of 50p per person per one-way journey, subject to a minimum fee of £1 for each booking.
'I immediately phoned Flybe to query why the £13 had not been returned,' says Sanjay, who lives with wife Lynn, 48, and their three children, Jayesh, 14, Asha, 11, and Rajesh, 8.
'How it could justify withholding the payment for a service it had not delivered?'
But Flybe refused to refund Sanjay, even though he is a frequent traveller. Flybe says it is charged by the banks to process card transactions and as such cannot return the fee.
Sanjay says: 'Flybe is hiding behind its small print. It cancelled my flight. I had to pay a fee to buy the ticket. If I couldn't travel, why should I be penalised by that fee?'
James Daley, editor of Which? Money, says this is a complaint he hears increasingly. 'Any good business should refund card fees if it does not deliver the service,' he says.
'I cannot understand why so many low-cost airlines treat customers with contempt. We hope the OFT will come back with recommendations that will see an end to unfair card charges, which can be scandalously high.' On Friday, Flybe said it would refund Sanjay's £13 payment. It blamed an administrative error and said the cash should not have been withheld.
Cancellations: Your refund rights
ABTA, the trade body for travel operators, says under EU law if an airline cancels a flight passengers are entitled to a full refund. But this does not have to extend to 'transaction fees'.
And policies vary. EasyJet and Ryanair refund card charges as well as the ticket price where a flight has been cancelled by the airline. Flybe's policy is the same, but fees are not always refunded.
The situation is different if the passenger cancels. In this situation, most low-cost airlines generally do not give refunds, apart from execeptional circumstances.
Many airlines charge a fee to cancel or change a booking. Some will refund Air Passenger Duty, but then levy a cancellation fee that far exceeds any refund.
Good travel insurance will protect customers over cancelled flights, but people travelling in Britain, such as Sanjay Ganatra, often have no cover. And many policies cover only the cost of the goods themselves - the flight - not any associated fees or charges.
Mike Powell of financial analyst Defaqto says some policies may also include cover for payment fees, but you must read the small print. 'Some providers state that cover includes other pre-paid charges, which you have paid or are contracted to pay,' he says.
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