CabCharge gets off lightly in credit card scam
If you elect to pay by non cash means in a cab in Australia, you goy stung 10%.Well now the 10 per cent surcharge on taxi fares for non-cash payments could be lifted after CabCharge admitted breaching the Trade Practices Act by abusing its market dominance.
Credit cards business closed to competition by CabCharge unlawful
CabCharge admitted it had taken advantage of its position in the market to refuse requests from competitors to process Cabcharge cards on their electronic payments systems.The company also admitted to predatory pricing by installing its fare meters free or below cost, squeezing rivals out further.
CabCharge agrees to pay $15 million in fines
It will pay penalties and costs of $15 million after agreeing to a settlement with the Australian Competition and Consumer Commission [ACCC] yesterday in the Federal Court, avoiding a lengthy court battle that was due to begin next month.The ACCC chairman, Graeme Samuel, said the settlement was a ''clear message to Cabcharge it had gone too far'' and would lead to greater scope for competition in the industry - and lower prices for taxi customers.
''Generally where you can get some competition in the marketplace you tend to find service levels increase and prices reduce for consumers,'' Mr Samuel said.
''You could see potentially service providers saying to cab drivers and cab owners 'We can offer you a better deal than Cabcharge can offer', and Cabcharge will have to meet that competition.''
CabCharge slugs 10% on every credit card transaction
Cabcharge levies a 10 per cent surcharge on every fare processed on its systems paid by credit card, bank debit card or through its proprietary charge card and vouchers.
Its long-standing and popular charge account has helped it become the dominant player in the industry. It has its machines installed in 96 per cent of taxis across the country, though its rivals have increasingly encouraged operators and drivers to install their machines additionally, offering them a cut of the 10 per cent surcharge.
CabCharge forced to agree to Compliance of ACCC
The court ordered Cabcharge to comply with a compliance program involving beefing up its internal controls and training to ensure it did not contravene the act again. It will also be subject to external audits.Mr Samuel said the penalty would deter CabCharge from repeating its behaviour.
''They now know what constitutes a breach of the act and misuse of market power.''
In a joint submission with the ACCC tendered to the court, Cabcharge said it had been unaware it was breaching the act but now accepted its actions were ''serious in nature and extent''.
The submission said the contravening conduct was undertaken at ''the most senior level of the corporation'', including its prominent executive chairman, Reg Kermode.
Mr Samuel said the settlement had reaped the highest penalty imposed by the commission for the misuse of market power.
Were CabCharge rewarded for bad behaviour?
Based on the amount ripped off from the public, many are saying that CabCharge out out of jail in that the fine was tiny compared to the money made from the scam and this was reflected in CabCharge's share price surging over 10% higher.You will need to claim losses yourself
The ACCC did not quantify any loss or damage to consumers or competitors, saying it was ''not likely to be readily ascertainable''.Whilst CabCharge denied its behaviour had contributed to any such loss or damage if you paid the amount you would have suffered.
Any individual, business or Government Department who has suffered a loss or damage, or who wants to get a refund on the 10% surcharge should contact CabCharge now.
Source: Mr Mortgage
