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June 06, 2011

  • News:  UAE; Stop Card Surcharge 

    In February, major credit card companies operating in the United Arab Emirates (UAE) sent a warning out to retailers that levying surcharges on card purchases was prohibited. Jewelry dealers were the biggest offenders and defended the added surcharge as a protective measure against increased risk from fluctuating gold prices. Many of them were charging a 2 percent surcharge for every credit card purchase. However, Visa warned them that their contracts strictly prohibited them charging a surcharge unless it was expressly ordered by law. As noted by a Visa spokesperson, no such law exists. Eyad Al Kourdi, Vice President and Country Manager, UAE, MasterCard Worldwide (MC) added that they too had the same rules that apply to adding a surcharge to any MC brand credit card purchase.

    Despite warnings by both Visa and MasterCard, merchants continued to add a surcharge to any card purchase. After receiving a number of consumer complaints, the Supreme Committee for Consumer Protection decided to take matters into their own hands. The agency said that when a merchant chooses to accept credit card payment, they have agreed to the terms of the contract and must comply with the requirements. Sultan Bin Saeed Al Mansouri, Minister of Economy and Chairman of the Supreme Committee Consumer Protection, announced today that the committee passed a new ruling that prohibits retailers from imposing surcharges on credit card usage as commission.

    Beginning July 1, 2011, merchants in the UAE must stop charging any additional fee on credit card purchases or be subject to large fines and other consequences. Consumers are encouraged to notify their card issuing financial institution with the name and location of any merchant in violation of the ruling. Shoppers should also include a copy of the card sales slip. In other business, the committee also agreed on the free trade of several product categories including dairy products and juices, drinking water, and livestock which is expected to increase competition.

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