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The Association of Independent Tours Operators has issued a statement to ‘set the record straight’ on misreporting of the new credit card rules that came into force over the weekend.
It has become frustrated by accusations in the consumer media that the new rules, which stop retailers from charging card fees, are aimed at the ‘rip off travel industry’, saying journalists have been misled.
"The accusations in the media are totally unwarranted and sensationalist," said AITO.
"The consumer media has been misled both by Government and bankers in this connection – and the media, in turn, has misinformed the public.
AITO said the Government claims the new rules will save consumers money, by preventing the companies which accept credit cards and debit cards in payment for their goods or services from charging consumers for the privilege.
"While saving consumers money was certainly the EU’s intention, the opposite has happened due to lack of regulatory control over the banks’ credit card charges," it said.
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AITO and the wider travel industry have argued that the move will only serve to increase holiday prices across the board, not only for those paying by credit card but also for those paying in cash, plus those booking direct via the web.~
"The travel industry typically works on very low margins – 1.5% profit before tax is not unusual.~ Absorbing the 2% bank charge on credit cards while operating at such tiny margins is thus impossible; it will force holiday prices to be increased – an own goal for the Government," said AITO’s statement.
"Making credit cards free to use is bound to encourage many more consumers to pay by credit card and thus, potentially, to get into debt.~ This is something that the Government purports to be concerned about, as of course it should be."
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It said the travel industry has typically charged 2% for accepting payment by card.
"This is not profiteering – it is simply recharging the cost charged to travel companies by the card companies, ie the banks.
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"It is erroneous to blame the travel industry, including AITO members, for passing on such charges to the consumer.~ The villain is actually the banking sector, which should be called to account by Government and required to lower its fees and to curb its super profits."
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AITO Chairman Derek Moore added: "There is no doubt that this a dog’s dinner of a mess – all totally avoidable had the Government listened to the travel industry and concluded that control of the UK’s wayward, profiteering bankers was an essential part of the scenario.
"The solution is for the Government to address this unfair state of affairs – of which they are fully aware – quickly, to avoid lasting damage to the SMEs of the travel industry.~ Government needs to freeze bank charges at the 0.3% level originally required by the EU.
"I urge Mrs May and her Treasury colleagues to pay careful attention to this parlous state of affairs and to take action, both to protect the consumer from the misery of unnecessary debt and also to protect the specialist agents and specialist tour operators in the UK from having to incur such nonsensical costs courtesy of our Fat Cat banking industry.
"Voters will doubtless thank her, too, for preventing a totally unnecessary increase in their holiday prices."
