Million Dollar Fines Looming Sept 1

THOUSANDS of unsuspecting NSW businesses and body corporates could be in breach of new ACCC guidelines on credit card surcharges which come into effect September 1, potentially facing pecuniary penalties of up to $1.1mllion.

The new laws, which officially came into effect in 2016 for ‘large’ merchants, are designed to stop payment surcharges that are more than the actual cost of accepting that payment method.

Until recently, credit card surcharges had been limited to ‘reasonable cost’ to the business of processing the transaction – with the worst offenders notably being the airlines, which brazenly bankrolled as much as 17% in some cases on card payment fees.

The legislation also helped stem the lexicon of euphemisms including ‘booking fees’ and ‘service fees’ as big business looked for ways around the law.

However, while roundly applauded, there are claims by one of NSW’s leading business advisory firms that many small and medium business owners will fall foul of the changes, unaware of amendments to the Bill and their obligations.

Alan McGillivray, who has served on numerous State and National tax committees, is widely regarded as one of NSW’s most experienced small to medium business authorities.

Having also been called on to provide expert advice to national courts, Mr McGillivray says the practice among many small/medium businesses in passing on excessive credit card charges to customers will soon be a thing of the past as the new regulations roll out – however it is becoming increasingly apparent that very few merchants are aware of the Bill and the tough penalties for breaches.

“ In some cases banks have started to provide businesses with annual statements showing ‘average percentage cost’ over the year for each type of card they accept, “ says Mr McGillivray

“ That amount is what you will be able to pass on to customers.

“Unfortunately, many small to medium sized businesses, including those may not use English as their first language are blissfully unaware of what is about to become law or the penalties.”

According to the ACCC website, listed corporations could be hit with infringement notices of up to $108,000 while incorporated businesses can be fined up to $10,800.

If court action is required, pecuniary penalties can be as high as $1.1m for body corporates.

Mr McGillivray said that while the September 1 ban did not prevent businesses from imposing a payment surcharge as a flat or fixed fee there was absolutely no absolutely no obligation to pass the surcharge on.