Wednesday, September 14, 2005

"Bank Fees Are Tax on All Consumers" (Fair Investment Company, U.K.)

Consumer group welcomes MasterCard fee decision

A national consumer group has welcomed the decision by the Office of Fair Trading (OFT) to fine MasterCard for 'taxing' its customers. According to the National Consumer Council (NCC), the OFT's ruling that Mastercard and the banks issuing its credit cards have been deliberately overcharging their customers brings good news for credit card holders.

In an announcement made yesterday, the OFT revealed that purchases made on MasterCard between March 2000 and November 2004 were subject to an 'interchange fee', which had been deliberately set too high to enable banks to recoup costs.

Commenting on the announcement, Alena Kozokova, competition expert at the NCC, said: "Card interchange fee agreements between banks are a tax on all consumers whether or not they use credit cards, because they push up shop prices as well as card charges."

So, this is extremely welcome news for consumers, and the harbinger of a similar OFT crackdown on Visa's interchange fee arrangements."

The OFT has yet to reveal whether MasterCard will face a mammoth fine for the overcharging practice.

(source: Fair Investment Community)