Abu Dhabi cracks down on illegal credit card fees

Businesses and government entities will face legal repercussions for charging extra fees to customers paying with credit cards.

The Abu Dhabi Department of Economic Development said yesterday that any trade licensed company across the emirate caught collecting extra fees when customers use credit cards could be prosecuted and fined up to Dh100,000.

The latest circular enforces a previous resolution passed by the Supreme Committee for Consumer Protection, according to Mohammed Al Mansouri, the executive director of the department’s Abu Dhabi Business Centre.

Numerous complaints from consumers throughout the UAE, who had been charged up to 5 per cent of the purchase price when paying by credit card, caught the attention of the country’s consumer protection division.

This compares to the fee a merchant pays its bank for point-of-sale services, which can be up to 3 per cent of the purchase price for Visa and MasterCard transactions.

The fees are a reason why some businesses do not accept credit cards, said J J Vidal, the general manager of Barbacoa. The Mexican restaurant in Abu Dhabi absorbs credit card transaction fees charged by banks rather than passing them on to the customer.

“We have the responsibility and commitment toward the bank [to pay any additional fees], but other than that, it’s a simple transaction for the customer,” he said.

The DED has set up a toll-free number to address consumer complaints about extra charges at 800 555. “The Abu Dhabi Department of Economic Development is ready to respond to consumers’ complaints on this issue through the toll-free number and to be strict in dealing with such violations and prosecute whoever violates this resolution in the emirate of Abu Dhabi,” said the department.

Mr Al Mansouri said that the resolution issued by the Supreme Committee for Consumer Protection cancelled all credit card surcharges – typically Dh2 to Dh5 – collected in the sectors of services, transactions, goods in addition to the sectors of health, education and the airline industry.

The Ministry of Economy will work with the Department of Economic Development to create awareness to all service providers and points of sale, instructing them to place visible signs indicating that no additional fees are collected for credit card payments.

A monitoring and inspection team will follow up with the companies, while conducting random site visits to ensure compliance with the new resolution.

The property consultancy CBRE said the move is likely to have very little direct impact on the local economy, but will boost consumer confidence.

“It paints a better picture of the market in terms of its maturity,” said Matt Green, the head of research and consultancy at CBRE. “I think that people assume that when using their credit cards, they don’t have additional charges and when they do, they’re often unaware.”

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