On the 11th February, “Which?” the consumer magazine launched a super complaint into the practise of levying surcharges on transactions using debit or credit cards to complete a purchase. The basis of Which’s complaint is that this practise “results in distortionary effects on competition, primarily through reducing the clarity of advertised prices…”
Which’s key argument is that the practise of surcharging itself is in some circumstances harmful to the customers’ interests and that often the surcharge is not levied to pay for the specific payment method but is actually part of the price of the underlying good or service, and as such it should be incorporated into the headline advertised price.
At iCarhireinsurance we couldn’t agree more. This practise of applying a surcharge to the advertised price is endemic within the travel sector and it often leads customers to make a decision based on price or value when they are not in possession of the full range of charges which will apply to the product or service that they are considering buying.
We’ve all had the experience of paying for a flight which was advertised at a low rate, and then just as you are about to pay for the ticket you have additional fees for checking in, checking baggage, taking hand baggage, flying on a day with a “y” in it – it all adds up. This practise is common in travel, but unfortunately it is becoming more widespread in travel insurance products, including car hire insurance.
With iCarhireinsurance.com, the price that we advertise for our car hire excess insurance products is the price you pay at the check-out. You won’t find any extras added to our advertised cost such as Insurance Premium Tax, or credit card fees – these costs are all rolled into our advertised price so you know what you’re going to pay before you even reach the check-out. When we advertise our Annual European Excess at £39.99, if you want to buy it that’s the price you’ll pay!
However, when we launched our products in the UK we sparked a bit of a price war and many other providers scrambled to try to work out if it was possible for them to offer a product with the same excellent levels of cover at the same great price. Unfortunately some of them responded by reducing their headline sales prices just to hit you with additional levies when you try to actually buy the product. For example, there’s one provider in the market place who advertises to sell you a product at one rate, only to add a whopping 5.26% to your total bill when you try to pay for it by credit card, and they are not alone.
We believe in transparency. One of the main problems with buying this type of insurance at the rental desk is that it’s not a transparent process for customers, many of whom report to not understand what they are buying and have no way of comparing the value or the cover offered. We firmly believe that providing a clear and simple product with exceptional levels of cover at an unbeatable, transparent price is the only way to give customers what they deserve. We’re disappointed that the practise of levying additional stealth charges has found its way into this market, particularly when in some instances it is adding over one twentieth to the advertised price of the insurance the customer is trying to buy.
We wish “Which?” well with their super complaint and hope that this leads to a more transparent environment in which customers can research and buy their products. In the meantime, we remain committed to waving the flag for transparency within our industry and will continue to advertise the same headline price as customers end up paying when they buy our insurance.
For more information on the “Which?” Super complaint, please visit the Which? website