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South Lakeland District Council (20 007 197)

Category : Transport and highways > Other

Decision : Not upheld

Decision date : 23 Feb 2021

The Ombudsman's final decision:

Summary: Mr X complained the Council charged him an added fee to pay for parking using his bank card. He said this was an unlawful surcharge. The Ombudsman has discontinued his investigation. This is because it is unlikely we would find fault, the injustice to Mr X is not significant, and we cannot achieve the outcome Mr X wants.

The complaint

  1. Mr X complained the Council charged him an added fee to pay for parking using his bank card. He said this was an unlawful surcharge.
  2. Mr X wants the Council to stop the surcharges and issue him and other affected motorists a refund.

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The Ombudsman’s role and powers

  1. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word ‘fault’ to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. We provide a free service, but must use public money carefully. We may decide not to start or continue with an investigation if we believe:
  • it is unlikely we would find fault, or
  • the injustice is not significant enough to justify our involvement, or
  • we cannot achieve the outcome someone wants.

(Local Government Act 1974, section 24A(6), as amended)

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How I considered this complaint

  1. As part of the investigation, I have considered the following:
    • The complaint and the documents provided by the complainant.
    • Documents provided by the Council.
    • The Consumer Rights (Payment Surcharges) Regulations 2012 guidance (June 2018).
  2. Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

  1. The Council’s website confirms that motorists can pay for their parking by phone using a bank card. This enables them to extend their parking session by telephone and they can also opt to receive text message reminders before their parking session expires.
  2. A service charge of 10p or 20p is added, depending on the normal parking fee.
  3. The Council’s pay by phone service is operated by a third-party company. I will refer to them as Company Y.
  4. Company Y can take bank card payments by telephone, or the motorist can use Company Y’s mobile phone application.
  5. Company Y’s website confirms there may be a separate service fee and charges added to the parking tariff amount. This is stated in its parking application before a transaction is completed.

What happened

  1. Mr X parked in a Council car park on 15 September 2019. He did not have cash for the payment meter so instead used the option to pay by bank card using Company Y’s mobile phone application.
  2. Company Y charged Mr X an extra 20p on top of the Council’s parking charges.
  3. Mr X complained to the Council on 26 September. He said the European Union (EU) Payment Services Directive banned surcharges for paying by bank card and the added charge was unlawful.
  4. The Council investigated the complaint at stages one, two, and three of its procedure but did not agree it charged Mr X a surcharge.
  5. The Council sent its stage one response on 26 November. It said the service charge is an extra cost to allow motorists to view their transaction and increase their parking time remotely without having to return to their vehicle. It said this is not the same as a surcharge.
  6. Mr X was unhappy with the Council’s response. He said the Council had not resolved the issue.
  7. The Council sent its stage two complaint response on 30 January 2020. It said that in car parks with cash only machines the Council has contracted a pay by phone service as an alternative option to allow motorists to pay by card if they wish to do so. Company Y collects motorists bank card payments and retains the service charge as their income. This is not a hidden charge and is mentioned on parking meters. The Council said it manages the car park but does not own it. It said it would discuss installing a payment card machine with the car park’s owner.
  8. Mr X remained unhappy and asked the Council to consider his complaint at stage three.
  9. The Council sent its final complaint response on 20 August. It said the service provided by Company Y is not merely a card transaction. It is a greater service which allows remote payments, updates, and driver convenience. Motorists who use Company Y must agree to their terms and conditions and the extra charge before payment is made. The 20p charged by Company Y is for the added service it provides. It is not a card surcharge.
  10. Mr X remained dissatisfied and brought his complaint to the Ombudsman on 29 October 2020.

Analysis

  1. The Council’s website provides details of its parking services. This includes information about Company Y and the added charges for using this service. This information is also available on Company Y’s website, and on the payment meter at the car park Mr X used. I therefore agree with the Council the charges were not hidden.
  2. Using the pay by phone service operated by Company Y also meant added functionality and convenience. The Council said that is what the extra charge is for.
  3. Based on the above two points, I do not consider there is evidence of fault by the Council about transparency or the information it provides.
  4. The main basis of Mr X’s complaint is that it was unlawful for the Council to charge him more for paying for parking by bank card rather than in cash. He said this was contrary to an EU Directive.
  5. I have considered the relevant legislation, but I do not consider the Ombudsman can make a finding. Mr X and the Council disagree about whether the added charge was a fee for an extra service or an unlawful surcharge. I consider this is a technical legal point which only the Courts can decide. I therefore cannot achieve the outcome Mr X wants.
  6. The Council also said it would look at installing a card machine at the parking meter, so motorists do not have to pay by phone if they have no cash. This is in line with what the Ombudsman may recommend.
  7. Regardless of any findings on fault, I do not consider Mr X suffered a significant personal injustice by being charged an extra 20p to pay for parking by bank card.

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Final decision

  1. I have discontinued my investigation. This is because it is unlikely I would find fault, the injustice to Mr X is not significant, and I cannot achieve the outcome Mr X wants.

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Investigator's decision on behalf of the Ombudsman

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