man with a mo

Retirees are paying millions in fees for a fuel card designed to help them save

Millions of dollars are being spent in fees under a Western Australian government program designed to help retirees in regional areas cope with high fuel prices.

Amid skyrocketing oil prices that have pushed the cost of gasoline and diesel to record highs this year, country age pensioner fuel card transactions have emerged as being subject to surcharges of up to 3.75 percent.

The card was introduced in 2009 to ease the pressure on the cost of living for older people in regional areas where cars were often the only mode of transport available.

Under the program, which is expected to cost $122 million over four years, eligible retirees are eligible for a $575 fuel card per year.

Pensioners are being slapped with surcharges into a system designed to help them save money. (ABC Great Southern: Briana Fiore)

WA Opposition Leader Mia Davies, whose national party introduced the fuel card, said excessive charges were unacceptable.

Fuel dealers stated that they only pass on the surcharges of the fuel card operator WEX Motorpass.

However, WEX said it does not believe in dealer surcharges and said service stations set the fees at their discretion based on the cost it would have cost them to install a WEX processing terminal.

to aggravate problem

Former deputy chairman of Australia’s Competition and Consumer Commission, Michael Schaper, said retailers are bound by law on how much they can charge customers for using cards for 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,” said Dr. Schaper.

“But there’s a whole infrastructure … required to process that payment up to the point where it’s withdrawn from your bank account and sent to the company where you bought the coffee.”

A man in a suit is interviewed in a television studio.
Michael Schaper says overloads can add up.(News Online Brisbane)

dr Schaper said businesses like gas stations are “price takers” when it comes to card surcharges set by the banks and financial institutions like Visa and Mastercard that process payments.

Retailers were also required to tell consumers whether a card surcharge applied, as well as the tariff.

But he said card surcharge collection is a big problem for vulnerable fixed-income groups like retirees.

He said it’s a problem likely only to get worse as tap-and-go services and cards increasingly displace cash as a means of payment.

“If you have a fixed income like a pension or some other benefit, a few percentage points here, a few percentage points there … it certainly adds up,” he said.

“And when you have limited income but potentially unlimited opportunities where you have to pay a few points here and there, that really limits the life cycle.”

Answering questions from the ABC, the government said it was relaunching the fuel card service and that the “value of the card” would be at the heart of that effort.

The overloads are a ‘rort’

Retired Albany cab driver Darryl May said the fuel card is a lifeline.

Man staring out over the garden
Darryl May is doing what he can to combat the rising cost of living.(ABC Great Southern: Briana Fiore )

The 73-year-old said he grew his own vegetables to offset the high cost of living but relied on the fuel card to further ease the pressure.

He said the surcharges levied on the fuel card are an ordeal that could add five cents or more to the cost of a liter of fuel.

“Why would they take a percentage? You just swipe your card, if it was a dollar you might say OK, but it shouldn’t be anything,” Mr May said.

“Seems a bit rort and just rip off the pensioners, plus the gas price as 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 topping up their car or putting food on the table.

“If that comes out [the fuel card]Fuel was about 80 cents a liter,” he said

“Now it’s a damn $2.30 a liter [for diesel] and it has not increased.

“It should be indexed every year.”

elderly man in chair
Darryl May says fuel card value should be increased.(ABC Great Southern: Briana Fiore)

The Reserve Bank of Australia stresses that merchants have the right to reimburse the cost of card acceptance through a surcharge, but experts have warned this doesn’t mean it’s fair or ethical.

Research shows that surcharges vary significantly across the state, where dozens of participating outlets charge between 1.5 percent and 3.75 percent.

Others were unaware if an overload was present, while some incorrectly assumed there was none.

Consumer Protection, part of WA’s Department of Mines, Industry Regulation and Safety, said monitoring overloads is not part of its remit.

The Department for Transport is facilitating the program with the Department for Primary Industry and Regional Development, saying it is up to the Reserve Bank of Australia to track surcharges and monitor whether outlets have breached the rules when setting their fees.

Regional Economic Development Minister Alannah MacTiernan said the contract for future delivery of the program and related services had been put out to tender.

“The evaluation process of the tender process is ongoing, the results of which will affect the delivery of the map,” said Ms. MacTiernan.

She said the outcome of the process and the value of the card would be reflected in the 2023 bilateral budget.

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