Millions of dollars are being shelled out in fees under a West Australian government scheme that is supposed to help pensioners in regional areas deal with the high price of fuel.
Amid skyrocketing oil prices that have sent the cost of petrol and diesel to record highs this year, it has emerged that surcharge levies of up to 3.75 per cent apply to Country Age Pensioner Fuel Card transactions.
The card was introduced in 2009 as part of efforts to ease cost-of-living pressures for elderly people in regional areas where cars were often the only mode of transport available.
Under the scheme, which is budgeted to cost $122 million over four years, eligible pensioners are entitled to a fuel card worth $575 a year.
WA Opposition Leader Mia Davies, whose National Party established the fuel card, said excessive fees were unacceptable.
Fuel merchants said they were only passing on the surcharges imposed by fuel card operator WEX Motorpass.
But WEX said it did not believe in merchant surcharging, saying fuel outlets were setting fees at their own discretion based on what it cost them to install a WEX processing terminal.
Problem to worsen
Former Australian Competition and Consumer Commission deputy chairman Michael Schaper said retailers were bound by law in how much they could charge customers for using cards to make payments.
He said it was illegal to charge an unreasonable amount.
"We don't see it when we swipe our cards to get our coffee," Dr Schaper said.
"But there is a whole infrastructure … required to process that payment right through to the point at which it gets debited from your bank account and transferred to the business you bought the coffee from."
Dr Schaper said businesses such as service stations were "price takers" when it came to card surcharges, which were set by the banks and financial institutions such as Visa and Mastercard that processed payments.
Retailers also had to tell consumers if a surcharge applied to cards, as well as the rate.
However, he said the imposition of card surcharges was a big problem for vulnerable groups on fixed incomes such as pensioners.
He said it was a problem that was only likely to get worse as tap-and-go services and cards increasingly pushed out cash as a way of making payments.
"When you're on a fixed income such as a pension or any other welfare benefit, a couple of percentage points here, a couple of percentage points there … it certainly adds up," he said.
"And when you've got a limited income but potential unlimited opportunity in which you're going to have to pay a few points here and there, that really does crimp the living cycle."
In answer to questions from the ABC, the government said it was retendering the fuel card service and the "value of the card" would be a focus of those efforts.
The surcharges are a 'rort'
Albany retired taxi driver Darryl May said the fuel card was a lifeline.
The 73-year-old said he grew his own vegetables to offset the high cost of living, but depended on the fuel card to further ease the pressure.
He said the surcharges applied to the fuel card were a rort that could add five cents or more to the cost of a litre of fuel.
"Why should they take a percentage? You only swipe your card, if it was a dollar you might say OK, but it should be nothing," Mr May said.
"Seems to be a bit of a rort and just ripping off the pensioners, plus the price of fuel how it is, is high enough without paying more."
Mr May also said increasing the value of the card would mean people wouldn't have to choose between filling up their car or putting food on the table.
"When that come out [the fuel card], fuel was about 80 cents a litre," he said
"Now it's bloody $2.30 a litre [for diesel] and it hasn't gone up.
"It should be indexed every year."
The Reserve Bank of Australia emphasises that merchants have the right to recover costs of card acceptance through a surcharge, but experts have warned that it doesn't mean it's fair or ethical.
Investigations show surcharges vary significantly across the state, where dozens of participating outlets impose levies ranging from 1.5 per cent to 3.75 per cent.
Others were unaware of whether a surcharge applied, while some wrongly suggested none was in place.
Consumer Protection, part of WA's Department of Mines, Industry Regulation and Safety, said monitoring surcharges was not part of its remit.
The Department of Transport facilitates the scheme with the Department of Primary Industry and Regional Development and said it was up to the Reserve Bank of Australia to keep track of surcharges and monitor whether any outlets had breached the rules in setting their fees.
Regional Economic Development Minister Alannah MacTiernan said the contract for future delivery of the scheme and associated services had been put to tender.
"The tender process assessment process is in progress, the outcomes of which will influence delivery of the card," Ms MacTiernan said.
She said the outcome of the process and value of the card would be considered in the 2023 bilateral budget.
