Consumers will lose another layer of protection after Brexit when dealing with EEA-based suppliers, as the UK government will no longer cap interchange fees where either the merchant's acquirer or the payment card issuer is based outside the UK. This follows the UK government's alert on the impact of a 'No Deal' Brexit on consumer rights.
The proposed changes to the UK Interchange Fee Regulations for Brexit purposes would take effect on 30 March or end December 2020 (depending on whether there is a Withdrawal Agreement and related transition period). Among other things, the proposed Regulations:
- Limit the scope of the UK Regs to transactions that take place only within the UK (both the acquirer and the card issuer are located in the UK), so cross-border card payments between the UK and the EEA will no longer be within scope of either the UK or EU interchange fee regs (i.e. payments made within the UK will continue to have caps on interchange fees, while payments where either the acquirer or the card issuer is based outside the UK (including in the EEA) will no longer be subject to the caps); and
- Allow for regulations setting lower caps on UK debit and credit card transactions, and a maximum cap for UK debit card transactions.
The UK government consumer rights alert in October warned that:
As the UK will no longer be a Member State, there may be an impact on the extent to which UK consumers are protected when buying goods and services in the remaining Member States. The laws of those states are similar but may differ in some areas to UK law both as respective laws evolve over time as well as due to differing levels of harmonisation between Member States in some areas. UK consumers will also no longer be able to use the UK courts effectively to seek redress from EU based traders, and if a UK court does make a [judgment], the enforcement of that [judgment] will be more difficult as we will no longer be part of the EU. In addition, there will no longer be reciprocal obligations on the UK or EU Member States to investigate breaches of consumer laws or take forward enforcement actions... UK consumers would need to seek redress through the courts of that state rather than UK courts.
That means UK consumers dealing with Irish retailers would need to enforce their consumer rights under Irish law in Ireland.
...UK consumers will also no longer be able to use the UK courts effectively to seek redress from EU based traders.