ACCC Takes Action Against Europcar For Excessive Card Payment Surcharges

Friday 3 August 2018 @ 11.43 a.m. | Legal Research | Trade & Commerce

A recent Media Release from the Australian Competition and Consumer Commission (the “ACCC”) has revealed that the consumer watchdog has begun proceedings in the Federal Court of Australia against CLA Trading Pty Ltd (t/a as “Europcar”) for allegedly charging excessive credit and debit card payment surcharges, in breach of the Competition and Consumer Act 2010 (Cth).

This is the first legal action under laws banning companies from imposing excessive surcharges on customers paying with credit and debit cards.


Europcar is classified as a large business under the Excessive Surcharging Provisions, with the ban on excessive credit and debit card payment surcharges for large businesses taking effect from 1 September 2016 and from 1 September 2017 for other businesses.

According to the ACCC:

"The excessive payment surcharges law provides that businesses can only pass on to customers what it costs them to process a payment (cost of acceptance). For example, if the cost of acceptance for Visa credit is 1 per cent, a business can only add a surcharge of 1 per cent for customers who pay by Visa credit card.

Banks and other payment processors are required to provide businesses with Merchant Statements which clearly set out the business’ cost of acceptance for each payment scheme. This requirement was introduced to assist businesses to easily determine their costs of accepting card payments."

The Current Allegations

The media release outlines the allegations made by the ACCC:

"The ACCC alleges that Europcar customers who used Visa or MasterCard credit cards during July and August 2017 were charged fees above what it cost Europcar to accept those payments.

The ACCC also alleges excessive payment surcharges were imposed by Europcar on customers using Visa or MasterCard debit cards between July and 5 November 2017.

It is alleged that Europcar charged surcharges of up to 1.43 per cent, although the rates varied over time and by the type of card. The ACCC alleges that the amount overcharged ranged from at least 0.18 percentage points to as much as 0.65 percentage points for different cards and time periods.

Europcar also did not reduce its surcharges despite being notified by its bank in July 2017 of the actual cost to accept payments by these cards. Instead, it is alleged Europcar continued to charge customers in excess of this amount, in breach of the law."

Comment from the ACCC

Commenting on the current action, ACCC Chair Rod Sims said:

“The alleged conduct by Europcar in relation to its surcharge rates is particularly concerning, given we will allege that it was well aware of its own cost of acceptance from at least July 2017. Businesses must not charge customers more than it costs them to process a card payment. The ACCC’s action serves as a warning that the ACCC is paying close attention to those businesses who seek to overcharge customers making payments by credit or debit cards.”

The ACCC’s proceedings only relate to outlets which are owned and operated by Europcar and not those run by franchisees. This is the first litigation the ACCC has commenced under the excessive surcharging provisions.

Statement from Europcar

On 25 July 2018, Europcar issued a Media Statement (which can be viewed in full on the company’s website), but in part it states:

“Europcar Australia acknowledges the Australian Competition and Consumer Commission’s (ACCC) announcement today to institute civil proceedings against Europcar Australia relating to allegations that Europcar contravened the Competition and Consumer Act 2010 (Cth) by unintentional overcharging of debit card fees in the period between July 2017 and 5 November 2017. Europcar can confirm that customers who paid by debit card in the two month period from 1 September 2017 to 5 November 2017 were unintentionally overcharged and were fully refunded the difference in credit and debit card fees as soon as the data was available to identify and correct this issue … With regards to the ACCC allegations relating to the period July to August 2017, we believe that we complied with the Reserve Bank Standard in relation to that period and will be taking this into account as part of our review of the claims made against Europcar.”

Previous Action against Europcar

Europcar has had previous history with the ACCC.  According to an ABC News report:

"In April 2016, the Federal Court found that several terms in the company's standard rental agreement were "unfair".

In particular, Europcar held consumers responsible for vehicle loss or damage — even if it was not the consumer's fault.

Another unfair term dictated that consumers would be liable for vehicle loss or damage when they breached the rental agreement, regardless of how trivial the breach, even if it had no connection to the loss or damage that eventuated.

The court declared these terms "void", and therefore unenforceable by the company.

Europcar also had to pay a $100,000 penalty for making false or misleading representations about consumers' liability in the event of vehicle damage."

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