Micheál Martin (Cork South Central, Fianna Fail)

The Deputy will be aware that sections 48 and 49 of the Consumer Protection Act 2007 seek to restrict the manner in which traders impose additional charges on consumers solely by reason of the method of payment chosen by the consumer. This issue first arose in the course of the passage of the Consumer Protection Bill through the Oireachtas. An amendment was proposed in the Seanad which sought to prohibit traders from imposing charges solely related to the payment method chosen by the customer by way of an extra amount of money, commonly referred to as a credit or debit card surcharge, a different price depending on the payment being made in cash or by credit card or debit card, or a handling fee for purchases made on the Internet depending on the method of payment.

The Deputy will also be aware that on the commencement of the Consumer Protection Act 2007 in May last year I did not commence sections 48 and 49 as I advised that it was my intention to conduct a public consultation on these provisions. In the course of that consultation my Department received almost 50 submissions on the impact of sections 48 and 49. The submissions gave rise to a number of complex matters which required legal advice, particularly regarding the compatibility of sections 48 and 49 with provisions of EU law.

These responses raised a number of specific issues upon which the Department sought the advice of the Attorney General. These issues related to the compatibility of sections 48 and 49 with EU law, specifically with the EU directive on unfair commercial practices and the EU payment services directive. The Attorney General's advice is that sections 48 and 49 are not compatible with the maximum harmonisation nature of the unfair commercial practices directive in that the sections seek to legislate within the field of consumer protection approximated by the directive. He argues that by going beyond what is permitted by the directive, the sections are not compatible with the maximum harmonisation nature of the directive.

As the Attorney General has advised that sections 48 and 49 are not compatible with EU law, I have decided not to commence these provisions. I am, however, committed to the importance of consumers being made aware of the fact that a trader imposes an additional charge based on the method of payment before transacting with that trader. My Department is currently examining the possibility of making regulations under the Consumer Protection Act obliging traders who impose payment method charges to include information on those charges in any advertisements for their goods and services.

In the course of the public consultation process retailers, in opposing the introduction of section 48, maintained that they were merely passing on to the cardholder the cost imposed on the retailer by the card companies for facilitating card transactions. The Deputy may be aware of the recent decision of the competition directorate of the EU banning Mastercard from requiring retailers to pay its multilateral interchange fee for facilitating Mastercard transactions. It is understood that the competition directorate has recently commenced similar proceedings against the other major payment card scheme Visa. In that context, I have sought the advice of the Competition Authority as to the implications of this decision and its effects in Ireland, particularly in terms of the likely impact on the costs to retailers of accepting payment by particular payment methods.

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