On Monday, February 22nd, 2016 the Federal Senate passed the new law legislation forbidding surcharges on credit card usage. This is to counter the current practice, where we already have corporations charging more for the usage. Some are even advocating for the fees to rise up to 10 times the current charge.
According to the Senate, the law is already under scrutiny as The Australian Competition and Consumer Commission (ACCC) is monitoring it closely. Any company found to engage in such practices may face a fine of up to $108,000. Consumers have been under tough credit card processing costs. Jetstar charging $8.50 on an $85 fare, believed to cost just 66 cents to process.
The Laws of the Credit Card
The national treasury believes this would come as a sigh of relief because not every consumer is able to afford the current costs. The treasurer Scott Morrison added, many merchants do pass on costs fairly, while some merchants engage in this practice abusively. The call to have the surcharge banned outright has had over 500 petitions submitted on the website change.org administered by Queensland businessman Klaus Bartosch on the Murray financial system inquiry.
In 2014, MasterCard conducted the research on surcharges in Australia. The research showed that Australians were, in fact, being charged about $1.6 billion a year in surcharges. This has been done by the big businesses. While the small ones tread carefully as they are mostly under scrutiny by the legislature. Bartosch predicted if the new law does not fully ban the surcharges. The annual charges will escalate to about $6 billion to $7 billion.
Choice, the consumer advocacy group, found out the Qantas and Jetstar were charging surcharges of $7 and $8.50 respectively for cheap flights. Hence, the federal senate insisted together with Choice to pass this law. The law will come into effect later this year.
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