Australia: Regs, credit card firms play the blame game for surcharges

As concern mounts over spikes in fees charged to credit card users, reports say a mix of low competition and overlapping regulatory action are contributing factors to the problem.

The Australian Securities and Investments Commission has reportedly blamed the problem of overcharged card transactions on the fact that two regulators are responsible for monitoring the problem, leading to cases falling through the cracks. In a filing to the Financial System Inquiry, the Commission reportedly wrote that “a co-regulatory approach to limit an activity appears to have failed because the limitation imposed by payment schemes is not sufficient clear, and is not being enforced by a regulator with sufficient powers and resources to carry out the enforcement,” adding that the body “does not have any direct power to restrict the amount of a surcharge to the reasonable costs incurred by a merchant in accepting a card.”

The ASIC, along with the Australian Competition and Consumer Commissioner, are both given powers to restrict such surcharges, but those powers carry exceptions in certain cases. Now, say reports, merchants are calling upon a single regulator to have the power to monitor the fees.

The Reserve Bank of Australia amended guidelines last year to allow for such a regulator, say reports, but card companies and banks must enforce those rules.

Top card companies Visa and MasterCard, meanwhile, blame such overcharges on a lack of competition in certain industries, like airlines and utilities.

Full Content: Brisbane Times

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