Credit surcharges illegal!!

[Babydamulag]

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Published on ABS-CBN News | Latest Philippine Headlines, Breaking News, Video, Analysis, Features (http://www.abs-cbnnews.com)

Home > Business > Credit card surcharges are unlawful, says DTI
Credit card surcharges are unlawful, says DTI [1]

abs-cbnNEWS.com | 10/17/2010 4:44 PM
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MANILA, Philippines- Credit cards give consumers the advantage of purchasing goods and services without carrying any money since they are a convenient substitute for cash or check.
But do you know that unscrupulous business establishments are taking advantage of credit card holders by imposing 5-10% surcharges? Most of the consumers are not aware that these surcharges are illegal.
In an interview with "Mornings@ANC," Trade Undersecretary Zenaida Maglaya revealed the illicit tactics of some business establishments that are imposing additional charges on items purchased through credit cards.
“Surcharges are illegal. There is such a thing as one price tag policy. What you see on the actual price tag is the only cost that you must pay, no more, no less,” said Maglaya.
Under Article 81, or the “Price Tag Requirement,” of Republic Act 7394, otherwise known as “Consumer Act of the Philippines,” goods and services must have only an appropriate price tag or label. It must not be sold at a higher price that what is stated and without discrimination to all buyers.
Maglaya also noted that some merchandisers, mostly of appliances and gadgets, trick consumers by giving in-store promos of discounts for cash basis to discourage credit card payments.
Maglaya also advised consumers who were tricked into paying the surcharges to ask for a refund and report the incident to the Department of Trade and Industry (DTI).
“They (merchandisers) should not pass 5-10% surcharges to the consumers for they are already paying annual membership fee for using credit cards,” said Maglaya.
In ensuring consumers’ rights, Maglaya said the DTI is monitoring business establishments through secret marshalling. She also disclosed that DTI is closely working with retailers association.
Maglaya warned violators that they will be fined as much as P 300,000, depending on the gravity, and/or revocation of their business permit and license.
For complaints and questions, you may reach DTI’s hotline number 7513330 or visit www.dti.gov.ph [12]
Maglaya, meantime, gave the following tips to credit card holders:
1. Know your budget- Once you use your credit cards, you cannot track down the expenses and how much you have spent.
2. Do not be tempted, do not let yourself be trapped- Unless it is really important, do not use credit cards. Paying through cash is better than paying through credits
3. Be a wise consumer. Know your rights.

as of 10/17/2010 4:47 PM

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[13] Mumbai attackers stole credit cards, money: police | ABS-CBN News | Latest Philippine Headlines, Breaking News, Video, Analysis, Features
[14] More consumers using credit cards this Xmas season | ABS-CBN News | Latest Philippine Headlines, Breaking News, Video, Analysis, Features

 

[chip104]

Thanks babyD, I'm wondering if this still applies if businesses just hide the 5-10% surcharge in their prices, then say "but we will offer you a 5-10% discount if you pay in CASH".

 

[ScubaSteve]

I also (even though I am not from PI) wonder what would happen if the price tag says one thing but if the extra charges are clearly noted everywhere in the store and not hidden. I would think as long as the charges are obvious, that they would be legal.....but who knows.


Edit.....in theory Chip's idea and mine are rigidly covered from the looks of it. Good for PI for standing up to this sort of unscrupulous behaviour.

 

[kwhkg]

sadly no one will enforce this. its common practice in all transactions ,except malls and dept stores

 

[eagerbeaver]

unfortunately the end result is higher prices for everyone as the % gets added into the standard price.

 

[Joe Cool]

I was actually turned off by the fact that the dive ops I used charges me a fee to use my credit card. The card fee is a business expense. If they (Owners) don't want to pay for it, they can build it in their prices. One establishes the selling price of goods or services by factoring in cost (of doing business including estimated expenses) and profit margin. Credit Card fees are an expense so they should be factored into the cost of doing service. Technically, card companies prohibit this but who can stop a business owner from establishing the cost of his/her service?

Say, I am a business owner and somone pays using his credit card, I happily accept it and charge his/her bill on it. If he or she decides to pay cash, I give him/her an instant discount as a goodwill gift. It won't be an advertised discount.

Just an idea.

 

[jlevine]

These surcharges are often illegal in many countries. In some countries they are not allowed by the card brands (e.g. Visa). However, telling them a merchant that they are not allowed is often ineffective. When it comes down to it, if you are in a remote area with limited banking services, you either have to pay the fee or have enough cash. This isn't really great for tourists. When I was researching a trip to the Philippines a few months ago, almost every resort mentioned that they add a surcharge for credit cards.

 

[Babydamulag]

The surcharge is something that has bothered a lot of us for some time. It is important to note that "CASH IS KING". There are so many ways to pre-pay your dive trip via the Internet that this is not an issue <shouldn't be anyway>.