Bailiffs and Credit or Debit Card Fees

Under the law, bailiffs are prohibited from imposing fees for Credit or Debit Card transactions.

The permissible charges that bailiffs can levy are outlined within the Schedule of the Taking Control of Goods (Fees) Regulations 2014.

Instances occur where bailiffs decline card payments due to the suspension of their card services, typically stemming from a high incidence of chargebacks.

To reinstate these services, they are compelled to deposit funds with the bank or incur substantial transaction fees to safeguard the bank's interests against chargeback claims. However, these obligations cannot be transferred to debtors, as Merchant Service fees represent a contractual obligation between the bank and the bailiff firm.

Recouping any card fees is feasible through avenues such as a small claim, initiating a chargeback, or seeking a detailed assessment hearing as there exists no contractual relationship between debtors and bailiffs.

The Law:

Regulation 4 of the Consumer Rights (Payment Surcharges) Regulations 2012 states:

Excessive charges prohibited

4. A trader must not charge consumers, in respect of the use of a given means of payment, fees that exceed the cost borne by the trader for the use of that means.

Regulation 5 of the Consumer Rights (Payment Surcharges) Regulations 2012 states:

Contracts where prohibition applies

5.—(1) Regulation 4 applies only if the use is as a means for the consumer to make payments for the purposes of a contract with the trader, and only to the extent that that contract—

(a)is a sales or service contract, or a contract (other than a sales or service contract) for the supply of water, gas, electricity, district heating or digital content, and

(b)is not an excluded contract.

(2) An excluded contract is a contract—

(a)for social services, including social housing, childcare and support of families and persons permanently or temporarily in need, including long-term care;

(b)for health services provided, whether or not via healthcare facilities, by health professionals to patients to assess, maintain or restore their state of health, including the prescription, dispensation and provision of medicinal products and medical devices (and “health professionals” has the meaning given by Article 3(f) of Directive 2011/24/EU of the European Parliament and of the Council on the application of patients’ rights in cross-border healthcare)(1);

(c)for gambling within the meaning of the Gambling Act 2005(2) (which includes gaming, betting and participating in a lottery);

(d)for services of a banking, credit, insurance, personal pension, investment or payment nature;

(e)for the creation of immovable property or of rights in immovable property;

(f)for rental of accommodation for residential purposes;

(g)for the construction of new buildings, or the construction of substantially new buildings by the conversion of existing buildings;

(h)which falls within the scope of Directive 2008/122/EC of the European Parliament and of the Council on the protection of consumers in respect of certain aspects of timeshare, long–term holiday product, resale and exchange contracts(3);

(i)for the supply of foodstuffs, beverages or other goods intended for current consumption in the household, and which are supplied by a trader on frequent and regular rounds to the consumer’s home, residence or workplace;

(j)concluded by means of automatic vending machines or automated commercial premises;

(k)concluded with a telecommunications operator through a public telephone for the use of the telephone;

(l)concluded for the use of one single connection, by telephone, internet or fax, established by a consumer;

(m)under which goods are sold by way of execution or otherwise by authority of law.

Regulation 10 of the Consumer Rights (Payment Surcharges) Regulations 2012 states:

Consumer’s right of redress

10. Where a trader charges a fee in contravention of regulation 4—

(a)any provision of a contract requiring the consumer to pay the fee is unenforceable to the extent of the excess charged, and

(b)the contract for the purposes of which the payment is made is to be treated as providing for the excess to be repaid to the consumer.