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Flat rates can mean being charged as much as an extra 50% on top of the cost of a car park (Image : Tina Tiller)
Flat rates can mean being charged as much as an extra 50% on top of the cost of a car park (Image : Tina Tiller)

SocietyFebruary 12, 2024

Commerce Commission wants answers over council car park surcharges

Flat rates can mean being charged as much as an extra 50% on top of the cost of a car park (Image : Tina Tiller)
Flat rates can mean being charged as much as an extra 50% on top of the cost of a car park (Image : Tina Tiller)

Wondering why you have to pay an extra 50c on top of your parking payment? So is ComCom.

The country’s two major consumer watchdogs have expressed concern over flat fee surcharges being charged by council car park operators up and down the country. 

In most areas, especially in main centres, you’ll be pinged an additional 50c when using a debit or credit card to pay for parking on the street or in a council-run complex. 

While it’s become routine to pay extra when using PayWave – an issue that itself has prompted recent concern from consumer advocates – it’s unusual to be charged simply for using a card, especially when most car parks no longer accept cash payments. 

And in contrast to PayWave fees, which vary based on how much you’re spending, and typically range from 1.5% to 3%, parking surcharges are maintained at a consistent amount regardless of how long you’re staying. 

That can mean being charged as much as an extra 50% on top of the cost of a car park if you’re only stopping for a short time – a $1 parking fee for half an hour turning into $1.50, for example. It’s an issue that has prompted questions from both Consumer NZ and the Commerce Commission. 

Abby Damen, a spokesperson for Consumer, told The Spinoff that the organisation had received “a lot of complaints” about council car park surcharging over the past year. “On the face of it, the fees appear to be excessive,” she said. “We recommend anyone concerned about the high surcharge makes a complaint to the Commerce Commission.”

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A spokesperson for the commission told The Spinoff they’re already looking into it. “We are looking at the ways in which different carparking fees are charged to consumers, including whether those fees are reasonable, an accurate reflection of cost and whether they amount to a surcharge or recovery of additional fees associated with facilitating the carpark service,” they said.

“We have contacted relevant businesses and associations involved to seek further information about how their fees are made up and if they can be better presented to consumers.”

The commission said it had an expectation that surcharges should be “no more than the cost to [the merchant] of accepting the particular payment method”. 

During its investigation, the commission said it had found that some charges to consumers included a “payment-related cost”, as well as other business costs. 

In the case of parking, the spokesperson said, additional fees could also include costs for the supply of services to the car park owner, such as the terminals where payments were made. “In our view, this is not transparent or consistent with our views on the make-up of a surcharge,” the commission told The Spinoff.

“We think consumers need to be better informed of what the flat fee relates to and whether it is reasonable in the circumstances, and we believe there needs to be a clearer distinction of the surcharge relating to the method of payment as opposed to the recovery of additional fees.”

Speaking to Newshub last week, Commerce Commission chair John Small said flat rates such as this were a “serious problem” for consumers. “We’ve seen also in taxis where they have a flat fee of $3 or $4 so if it’s a cheap ride, that’s a massive percentage,” Small said. “So, no, that’s not OK and those are the kinds of merchants we are getting onto directly.” 

While the issue has received renewed attention in light of a recent focus on exorbitant PayWave fees, it’s not new itself. On social media, The Spinoff has seen numerous posts dating back months from concerned drivers querying added fees on their car park charges. “Why is it a standard $0.50 and not scaling [sic] to the transaction amount like everywhere else that takes credit card,” questioned one customer on Reddit. 

Another said it was particularly unreasonable in areas where parking meters no longer accepted loose change. “They used to have machines that accept coins and then ‘upgraded them’ and now you have to pay with card, which they make you pay the fees for,” wrote one person in Wellington. 

Wellington City Council confirmed it had launched a review of surcharges as part of a wider look at its city car parking. “The user fee covers merchant and bank fees and the administration of transactions,” a spokesperson told The Spinoff. The council would not provide any further detail as to the substance of the review, nor tell us how long it may take to carry out.

In comments to the Herald, the council added that it had launched the review to ensure it was meeting obligations under the 2022 Retail Payment System Act, a piece of legislation that capped retailer fees.

Auckland Transport told The Spinoff that the surcharge had been in place since 2010 and helped cover “a number of additional” costs incurred by the agency. “AT provides 900+ parking payment terminals around the city and these terminals are required to be as up to date as possible,” a spokesperson said.

“In addition to this, payment terminals are required to be PCI DSS (Payment Card Industry Data Security Standards) compliant. The 50c fee covers merchant fees, future-proofing of the payment terminals for customer security and PCI DSS.”

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