Red Balloon has paid $43,200 in penalties following alleged breaches of the excessive payment surcharges provisions in the Competition and Consumer Act 2010 (the Surcharge Laws). This follows the issue of four infringement notices by the ACCC for alleged breaches.
Under the Surcharge Laws, businesses can only pass on to consumers the payment processing costs that they incur, including merchant service fees, terminal rental fees and maintenance fees.
Red Balloon allegedly charged consumers surcharges that were in excess of the caps set out in the Surcharge Laws for payments by credit and debit cards on 31 March 2017 and 30 June 2017. Red Balloon cooperated with the ACCC's investigation and has since ensured that its payment surcharges are in compliance with the Surcharge Law.
While large businesses have been subject to the Surcharge Laws for more than a year, the new ban recently extended to all Australian businesses on 1 September 2017.
It is the responsibility of the business to ascertain the cost of card payments before imposing any surcharge on consumers for card transactions. Businesses should contact their financial institutions and obtain a copy of their annual statements to determine the cost of acceptance for card payments.
The ACCC media release is available here.