FEES CHARGED ON EFTPOS CASH BACK TRANSACTIONS IS ILLEGAL; ICCC

THE Independent Consumer and Competition Commission (‘ICCC’) has warned that shops are not permitted to charge customers any fees for cash back transactions conducted using EFTPOS machines.

ICCC confirmed that this practice is illegal and has issued this warning after receiving consumer complaints and preliminary investigations that some shops in the urban centres and rural areas of Papua New Guinea have been charging customers fees for cash back transactions through EFTPOS transactions. This practice is unfair to consumers and is not allowed.

In a statement, recent inquiries conducted by the ICCC with respective banking institutions confirmed that banks do not impose any fees on EFTPOS cash back transactions and any additional charges applied by shops for customers seeking cash back are not authorised by the banks. Customers are encouraged to report any such practices immediately to the concerned bank and/or ICCC.

The ICCC has met with Bank South Pacific Limited (BSP) and Kina Bank Limited, who have confirmed that charging customers for cash back is illegal and is a breach of the Merchant Agreement that exists between the bank and the Merchant.

Both banks have agreed to work closely with the ICCC to ensure all shops comply with the merchant agreements.

The ICCC is also collaborating and consulting with the Bank of Papua New Guinea (BPNG), as the mandated Regulator for the financial services, to ensure and consider introducing appropriate regulatory measures to address this consumer concern and to prevent unfair trading practices by merchants.

Meantime, the public is advised to remain vigilant and report any shop that continues to charge fees for EFTPOS cash back transactions immediately, so that the matter can be investigated and necessary action taken against non-compliant businesses.  

All merchants are strongly advised to cease such illegal practice.