The Government of New South Wales has initiated a research investigation into credit card fees and surcharges, with particular attention for airlines and taxi services, according to Virginia Judge, Fair Trade Minister.

“Businesses should be entitled to recover costs,” she said, speaking with The Daily Telegraph. “But I don’t think it is fair for consumers to be slugged with charges just for using a credit card.”

Debit and credit cards, as well as EFTPOS transactions, all fall within the purview of the Reserve Bank of Australia. In 2003, rules prohibiting businesses from passing credit card fees along to their clients, as surcharges, were struck down by the central bank. This permitted businesses to charge a “fee for service,” said Christopher Zinn, a spokesman with consumer group Choice, intended to stimulate competition and reduce the costs associated with paying by plastic.

But amongst industries that had only a few large corporations dominating the market, such as airlines and taxi services, the companies in question didn’t race competitively toward lower fees—but higher ones, as much as 10% of the total cost.

Choice last year awarded Qantas and Tiger Airways backhanded “Shonky” awards for their $7.70 surcharge per flight for passengers paying by credit card. The actual cost to the airlines was closer to 1.0%, according to Choice’s research.

A representative for Qantas denied the additional surcharge flowed to the airline’s bottom line.

The NSW Government hopes to use the results of their study to encourage the RBA and the Federal Government to find a better method of regulating such surcharges.

Source: http://www.news.com.au/