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The Australian Competition and Consumer Commission (ACCC) has reminded businesses to be transparent with consumers regarding card payment surcharges.
According to a statement from the government body, the coming financial year will see consumer law and compliance regarding “misleading surcharging practices” take top priority.
“Businesses need to ensure their customers know about any card payment surcharges upfront, and that they are only charging what it costs them to accept those card payments,” said ACCC deputy chair Mick Keogh.
“We understand that small businesses need to be across a lot of information to comply with all of the laws that apply to their business, however, charging excessive surcharges and not being upfront with customers about pricing can result in small businesses losing customers.
“It is important for small businesses to ensure they understand their obligations and check their costs of acceptance to know what amounts they can legally charge their customers as a payment surcharge, as well as reviewing how they inform customers of their prices, including any applicable surcharges.”
Australian Consumer Law prohibits businesses from misleading customers about pricing.
Additionally, under the Competition and Consumer Act, businesses cannot impose excessive card payment surcharges.
A surcharge is considered excessive if it exceeds the business’s actual ‘cost of acceptance’ for that payment method.
For example, if a business’s cost of accepting Visa credit card payments (including merchant fees and other allowable costs) is 1 per cent, any surcharge applied to Visa credit card transactions must not exceed 1 per cent.
It’s important for finance brokers to be aware of changes to compliance.
Small-business owners may not realise they’re breaking the law by adding a flat 2 per cent surcharge when their actual processing cost is only 1 per cent.
Clients rely on brokers for more than just loans – they expect guidance on financial compliance. By understanding surcharging laws, you can:
- Prevent costly mistakes before clients face ACCC scrutiny.
- Differentiate your services by offering compliance checks as part of your advisory role.
- Build long-term trust, ensuring clients see you as a strategic partner.
By understanding these rules, finance brokers can minimise risks, enhance compliance, and provide better advisory services, ultimately protecting both their clients and their own business reputation.
The importance of remaining engaged with compliance and the benefit this knowledge can bring to both the broker and the client are often discussed in Broker Daily’s Finance Specialist podcast.
To hear more, listen to ‘The best brokers work in collaboration with their clients’.
