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Aust'n businesses face fines for charging excessive credit card fees to consumers

Xinhua, September 1, 2016 Adjust font size:

Australian companies which slug consumers excessive fees for using bank cards to pay for good and services will be fined under new laws which came into effect on Thursday.

Earlier this year, the Senate passed a bill which would allow the Australian Competition and Consumer Commission (ACCC) to investigate and fine large companies which charge consumers exorbitant charges for wanting to use a credit or debit card for payment.

Airlines, taxis and ticketing companies were found to be among the worst offenders, with some credit card fees being in excess of 1,000 percent above the cost of actually processing the payment.

On Thursday, ACCC Chairman Rod Sims said consumers now have the power to dob in large companies who continue to charge consumers for wanting to use a progressive, 21st-century method of payment, with businesses facing fines of up to 830,000 U.S. dollars for ignoring the new laws.

"The companies will only be able to charge roughly half a percent for a debit card, 1.5 percent roughly for a Visa or MasterCard, and say 2.5 to 3 percent for a bank-issued American Express card," Sims told the Australian Broadcasting Corporation (ABC).

"This is really irritating for consumers, they go right through a transaction be it booking a flight, booking a theater ticket, booking the footy finals, and only at the end do they find they're subject to another charge."

According to Sims, only companies with a gross revenue of 19 million U.S. dollars will be affected in the first year of the new laws being brought in, but will be applied to all companies on Sept. 1, 2017.

He said the new laws send a message to companies not to "push the limits" of what the consumer decides is "acceptable."

"Consumers have been complaining about this for some time, the government has listened to those complaints and changed the law," Sims said.

"I think when companies push the boundaries they've got to understand they can provoke this sort of government reaction.

"It's a big win for consumers, but it's also a lesson for companies not to push the limits." Endit