ACCC Taking Europcar To Court Over Alleged Excessive Credit Card Surcharges [Updated]

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Today it was announced that the ACCC has instituted proceedings against CLA Trading Pty Ltd, better known as Europcar, for allegedly charging customers excessive credit and debit card payment surcharges. If true, Europcar will be in breach of the Competition and Consumer Act 2010.


This story originally published at 1pm on July 25. It has now been updated with a statement from Europcar, which can be read below.


This is the first time that the ACCC has entered into litigation under the excessive surcharging provisions. This law came into effect for large businesses, which Europcar is classified as, on September 1 2016 and states that businesses can only charge customers what it costs them to process a payment.

The ACCC is alleging that the car rental company charged customers fees above what it costs them to accept payments for Visa and Mastercard credit cards used during July and August 2017. It is also alleging similar for customers who used Visa and Mastercard debit cards between July and November 5 2017.

"It is alleged that Europcar charged surcharges of up to 1.43 per cent, although the rates varied over time and by the type of card. The ACCC alleges that the amount overcharged ranged from at least 0.18 percentage points to as much as 0.65 percentage points for different cards and time periods," the ACCC website states.

The site also says that despite being notified by its bank of the cost for accepting payments from these cards in July 2017, Europcar didn't reduce the surcharges.

"The alleged conduct by Europcar in relation to its surcharge rates is particularly concerning, given we will allege that it was well aware of its own cost of acceptance from at least July 2017," ACCC Chair Rod Sims said.

"Businesses must not charge customers more than it costs them to process a card payment."

"The ACCC’s action serves as a warning that the ACCC is paying close attention to those businesses who seek to overcharge customers making payments by credit or debit cards," Mr Sims said.

This isn't the first time that Europcar has faced Federal Court. In 2016 it found a number of terms in Europcar Australia's 2013 standard rental agreement unfair and ordered the company to pay a $100,000 penalty for "making false or misleading representations about consumers’ liability in the event of vehicle damage."

The current proceedings will not affect Europcar franchisees — only the 96 outlets that are directly operated by Europcar.

Update: Since publication Europcar has issued the following statement:

Europcar Australia acknowledges the Australian Competition and Consumer Commission’s (ACCC) announcement today to institute civil court proceedings against Europcar Australia relating to allegations that Europcar contravened the Competition and Consumer Act 2010 by unintentional overcharging of debit card fees in the period between July 2017 and 5 November 2017.

Europcar can confirm that customers who paid by debit card in the two month period from 1 September 2017 to 5 November 2017 were unintentionally overcharged and were fully refunded the difference in credit and debit card fees as soon as the data was available to identify and correct this issue.

This impacted 22,602 customers who were overcharged by a total of $20,294. The amounts refunded ranged from $0.01 to $18.33, with an average of 89 cents per customer.

With regards to the ACCC allegations relating to the period July to August 2017, we believe that we complied with the Reserve Bank Standard in relation to that period and will be taking this into account as part of our review of the claims made against Europcar.

We have fully co-operated with the ACCC since it commenced its investigation in October 2017. At every step we have sought to not only do the right thing by our customers but to also work openly, cooperatively and transparently with the ACCC to identify and correct this issue and to ensure the best possible outcome for all of our customers.

Europcar has worked closely with its financial institution and the regulator to ensure that its systems are compliant with changes to the rules relating to surcharge rates on debit and credit card transactions and that any modifications were fully implemented. We conducted our own thorough analysis to assist in ensuring compliance with these changed rules.

Unfortunately, the data available to us at the time and the global reservations system we had in place meant we unintentionally overcharged customers who paid via debit cards in the two month period from 1 September 2017 to 5 November 2017. Once this issue was identified and the data from our financial institution was available, we were able to identify and correct instances where this had occurred, Europcar immediately refunded those customers impacted.

While this action by the ACCC is disappointing given we have been transparent with the ACCC on this issue and promptly refunded all impacted customers, we remain absolutely committed to delivering the best value experience for our customers and as such, we look forward to presenting our defence in this case.

It is also available to view on the Europcar website.

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