Consumer protection: Credit cards and shop fees

Nawara Fattahova

It’s not very common in Kuwait that a store will ask for an additional fee if an invoice is paid by credit card. According to the ministry of commerce, this is illegal and the store will be penalized if the customer files a complaint. Recently, the consumer protection department of the ministry of commerce urged customers not to agree to pay any additional fee for using credit cards for payment.

Many consumers have fallen victim to this illegal act, as they don’t know the seller is violating the law. These cases are most common at travel agencies, vehicle spare parts shops, schools and some small businesses. Customers almost never have issues with big companies or popular brands.

Small businesses demand fees for using a credit card because they have to pay for each transaction to the bank. So in this way, they want the customer to pay this fee, although the customer is already paying an annual fee to the bank that issued the credit card, in addition to interest if the billing is spread in installments instead of a full payment. This makes it unjustified for the consumer to pay twice.

Ali from the consumer protection department’s call center noted that the customer can protect himself in two ways. “He can refuse to pay the additional fee and file a complaint at our department. Our inspectors will then go to the violating store and issue a fine,” he told Kuwait Times. If the consumer has already paid the illegal fee when using the credit card, he can still file a complaint. “The affected consumer should visit the consumer protection department in the same governorate where the store is located. In Shuwaikh for instance, it is near the Friday Market and nurseries. In Hawally governorate, there is one in Jabriya and another in Salmiya, and so on,” said Ali.

“The consumer should bring the receipt of payment, which usually doesn’t show the additional fee, and the bank receipt that comes from the machine when paying – this will show the difference in the amount paid. Our inspector will accompany the customer to that store and force the seller to return the additional fee to the customer. In addition, the inspector will issue a fine to this seller for violating the law,” he explained.

There are cases when the seller refuses to accept a payment with a credit card, or claims that he does not provide for this kind of payment. “It may be true that he doesn’t have the proper machine which can accept the credit card and only has one for debit cards (K-Net). But some sellers may not be telling the truth. In this case, if our inspectors find out he is lying, then he will get a fine as well,” Ali explained.

Many consumers have also complained of double swiping of their debit cards – before and after paying. Some reports warn details of the customer may be stolen due to this or his personal data may be illegally used for commercial and advertising purposes. The Central Bank of Kuwait recently issued a circular to the Kuwait Banking Association asking banks to prevent stores from swiping debit or credit cards twice.

According to a source at the Central Bank, double swiping does not seriously threaten the security of the customer’s accounts, but the procedure is against the payment Card Industry Data Security Standard (PCI DSS), according to which local banks and K-Net operate. “Payment through point of sale (POS) machines at the stores to the electronic system at the bank should be made according to these standards,” the source said.

Ali noted that the customer protection department hasn’t received any instructions from the ministry to curb this activity or issue fines to stores that double swipe cards. “By swiping the card, the seller only gets access to the data of the cardholder, which the store usually uses for accounting or marketing purposes. They can’t make any false transactions or purchases with the card unless they know the passcode. Also, our department hasn’t received any complaints of theft from bank accounts due to swiping credit or debit cards,” he concluded.

By Nawara Fattahova
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