An Australian consumer watchdog is taking airlines Virgin Australia and Jetstar to court over excessive card fees.
The Australian Competition and Consumer Commission (ACCC) is taking action against the airlines on the basis that fees for paying with cards only become obvious after a customer has already begun a purchase.
ACCC chairman Rod Sims said: "If we are successful it will send a message out to other sectors: we might also have more action launched before we have the outcome to these cases.
"We all want the market to be working effectively but it is not working as well as it should with business, and especially big business, pushing the boundaries and pushing them too far."
Currently, the airlines’ fees for card purchases can add as much as 20% to a budget fare.
Jetstar charges a "booking and service fee" of AUD8.50 ($8) per passenger per flight for credit card payments, unless a Jetstar card is used.
Virgin charges a booking and service fee of AUD7.70 per passenger per booking if credit cards or debit cards are used.
Excessive card fees are a well-known problem in Australia and the Reserve Bank of Australia introduced new rules last March limiting a merchant’s surcharge to "the reasonable cost of acceptance" in a bid to clamp down on excessive card surcharges.
The problem also affects banks and a court ruled in February that some late fees on credit cards charged by Australia and New Zealand Bank (ANZ) were "extravagant, exorbitant and unconscionable."
Law firm Maurice Blackburn represented 43,000 ANZ customers in the class action, which first began in September 2010 and is only one of a series of class actions brought against a total of eight banks by Australian consumers.
Lawyers for the consumers claimed that banks charged as much as AUD45 on charges that sometimes cost them as little as 50 cents to administer.
Maurice Blackburn also issued proceedings against Citibank, Commonwealth Bank, National Australia Bank, Westpac, St George, Bank SA and BankWest.