In brief: The ACCC has instituted Federal Court proceedings against Europcar for allegedly imposing excessive payment surcharges on customers. This is the first court proceeding commenced by the ACCC under the new prohibition, and serves as a reminder to businesses that card payment surcharges must be limited to the amount that it costs them to process that type of payment. This is a priority area for the ACCC, and follows a string of recent enforcement actions.


On 25 July 2018, the ACCC announced it had instituted proceedings against CLA Trading Pty Ltd (trading as Europcar) for allegedly charging excessive credit and debit card payment surcharges when customers purchased car rental services. Under the Competition and Consumer Act 2010 (Cth), a payment surcharge is 'excessive' if it exceeds the 'Cost of Acceptance' as defined by the Reserve Bank of Australia's Standard. Put simply, the surcharge passed on to customers using credit or debit cards should not exceed the amount that it costs the business to process the payment.

See our detailed discussion of the excessive surcharge regime introduced in 2016.

The ACCC alleges that between 19 July 2017 and 5 November 2017, Europcar charged customers excessive payment surcharges when using Visa or MasterCard credit or debit cards to pay for car rental services.

Europcar's Cost of Acceptance according to merchant statements provided by its bank was between 0.78% and 1.24%, depending on the type of card used. The ACCC alleges that Europcar charged surcharge amounts of up to 1.43%. While these figures varied over time and by the type of card being used, the extent to which customers were overcharged is alleged to range from 0.18 percentage points to 0.65 percentage points.

Key takeaways

  • The ACCC is paying close attention to businesses that overcharge customers paying by credit or debit card. This court proceeding follows infringement notices issued against Red Balloon Pty Ltd and Cruisin Motorhomes Pty Ltd, which were fined $43,200 and $12,600, respectively. The ACCC has stated that it continues to closely monitor surcharge complaints it receives.
  • Contravention of the prohibition against excessive surcharges can result in a maximum penalty of $1.35 million for each contravention. Given that multiple contraventions are possible, businesses need to pay close attention to the amounts that they are charging on a regular basis.
  • Merchant statements provided by banks and other payment processors are critical to compliance. Businesses should ensure that these statements are regularly reviewed and that any costs passed on to customers do not exceed the Cost of Acceptance.

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