On Wednesday (14 August), the ACCC announced that CLA Trading Pty Ltd — which trades as Europcar — had been hit with the penalty by the Federal Court for overcharging customers a payment surcharge for both credit and debit card transactions in 2017.
According to the ACCC, Europcar had admitted that its Visa and Mastercard surcharges made in July and August of 2017 were higher than its costs to accept the card payments — in breach of the Competition and Consumer Act 2010.
Furthermore, the watchdog said excessive fees had also been charged on Visa and Mastercard debit cards between June and 5 November 2017.
“Europcar imposed excessive surcharges on transactions affecting 63,012 customers and overcharged more than $67,000,” said ACCC deputy chair Mick Keogh.
“As a large and sophisticated business, Europcar was well aware of its obligations to comply with the law prohibiting excessive surcharges.
“Europcar also knew its actual cost to accept payments by these cards from at least July 2017, when it was notified by its bank. Despite this, Europcar continued to impose excessive surcharges.”
Mr Keogh said that while the amount of overcharging was small per customer — averaging just over $1 — the amount quickly added up.
“This decision is a warning to businesses that choose to impose surcharges,” he said.
“The onus is on them to get it right. A failure to comply with these laws may result in significant penalties.”
The ACCC’s legal action was flagged in July 2018, accompanied with a warning from chair Rod Sims that “businesses must not charge customers more than it costs them to process a card payment”.
“The ACCC is paying close attention to those businesses who seek to overcharge customers making payments by credit or debit cards,” he said at the time.
Company blames ‘system limitation’
Europcar released its own statement, stating that the penalty was “a joint resolution” with the competition regulator.
“Europcar Australia has reached a joint resolution with the Australian Competition and Consumer Commission (ACCC) to a case relating to allegations that the Europcar network in Australia contravened the credit and debit card surcharge rules in the Competition and Consumer Act 2010 by unintentionally overcharging debit card fees and some credit card fees between 19 July 2017 and 5 November 2017,” it said.
“Although Europcar in Australia had received relevant data from its financial services provider in mid-July 2017, a system limitation delayed implementation of the new rules.
“The company acknowledges that between 19 July 2017 and 5 November 2017, some customers were unintentionally overcharged an average of $1.07 per customer. All 63,012 customers affected by this error were fully refunded the amount unintentionally overcharged resulting in a total payment of $67,215.59.
“We have accepted a penalty of $350,000 as part of the settlement with the ACCC in recognition of the limitations in our rental system during this period.”
Europcar added: “The company has fully cooperated with the ACCC since it commenced its investigation in October 2017. At every step, we have sought to be open and transparent with the ACCC to identify and correct this issue and to ensure the best possible outcome for all of our customers.”