RBA cracks down on credit card charges

12 Jun 2012, 5:15 pm   -   Source: AAP

The Reserve Bank of Australia will crack down on businesses who charge customers excessive fees for using their credit card

Businesses will be banned from charging customers excessive credit card fees under new regulations announced by the Reserve Bank of Australia (RBA).

The RBA's Payment Systems Board on Tuesday announced changes to its surcharging standards which will prevent merchants from charging customers exorbitant fees to use their credit cards.

Instead, they will now only be able to charge enough to cover the cost of the transaction to the business.

Under the new regulations credit card providers like Visa and Mastercard will be able to take action against those who over-charge.

The new standards will come into force on January 1, 2013.

In a statement, the RBA said there was evidence many businesses were overcharging customers.

"The Bank believes that there is sufficient evidence to suggest that such practices are now relatively widespread and that the use of the freedoms provided to merchants by the (previous) surcharging reforms is no longer entirely in line with the original intent of the reforms," the RBA said.

"The Bank intends that its variation will improve price signals by enabling a card scheme to address cases where merchants are clearly surcharging at a higher level than is justified for acceptance of its card products."

The RBA has also launched a review of regulations governing EFTPOS transactions.

It expects to have a new regulatory framework in place by January 2014.

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