Thursday, October 26, 2006

Gov't bans surcharges on credit card transactions

THE Department of Trade and Industry has ordered a ban on surcharges on retail transactions using credit cards, debit cards and automated teller machine cards, starting Nov. 5.

The new policy is part of a campaign to protect consumers from unfair trade practices, Trade and Industry Secretary Peter Favila said.

Favila has issued Department Administrative Order No. 10, which prohibits any surcharge, extra or additional charge over and above the price tag on items purchased using cards for payment.

"A number of retailers have been charging differently on specific items, depending on the client's mode of payment," Favila said. "Usually, purchases using credit card are priced higher than those paid with cash, and this discriminates against the cardholders," he said.

He said that under DAO 10, all modes of payment available to consumers must always comply with the Price Tag Law.

"When the consumer opts to pay either through cash or card, he or she should pay only what is stated on the price tag," he said. "There should only be a single price tag indicating the cost of each item."

The order also requires that the option to pay in cash, card or installment be disclosed to the consumer if the information is not indicated in the price tag.

The price tag should be inclusive of the value-added tax for items covered by the tax. "It is unlawful to charge an additional tax over the price tag," Favila said.

DAO 10 specifies the proper format of an official receipt. It says the price opposite each item should already incorporate the amount of tax to be paid. The total cost that the consumer should pay is stated and the sum of the tax is shown as a separate item in the receipt. With

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