Anyone who uses a credit card has likely been charged a credit card fee at some point. Businesses of all types have learned how to work these fees into their products or services and the general public has all but gotten used to them. While most agree that these fees are unfair, everyone ultimately pays them.
While credit card surcharge fees date back at least a half a century, they first began being passed on to consumers in 2013 following a class action lawsuit. Illegal credit card fees emerged almost immediately despite laws regulating such fees in the industry. Consumers who have been charged illegal credit card fees should seek the counsel of an experienced financial services attorney who can help them recover damages.
Here’s what you need to know about the difference between legal and illegal credit card fees.
Legal Credit Card Fees
Whenever a merchant, such as a dentist or convenience store, accepts a credit card from a consumer as payment for a transaction, they must pay a processing fee to the appropriate financial services institution. For instance, when the merchant accepts a Visa credit card, they must pay Visa a correlating processing fee. If the merchant accepts a Mastercard credit card for payment, they must pay MasterCard a correlating processing fee and so on.
These processing fees are often passed on to consumers by the merchant. Consumers must be made aware of the credit card surcharge fees beforehand and given the option to use another form of payment. Credit card surcharge fees may be passed on to consumers in the form of a flat fee or a percentage of the sale. Percentages are the most popular option, but merchants may use either.
Illegal Credit Card Fees
Most illegal credit card fees are credit card surcharges charged on non-credit transactions. Many times, consumers will pay retailers with a debit card that is linked to their checking account. Most point-of-sale systems allow consumers to choose whether to run the transaction as a debit where they must enter a pin number or a credit where they must sign for their purchase.
Unfortunately, many retail and service businesses have gotten comfortable charging credit card surcharge fees on their transactions. Some argue that their point-of-sale system automatically charges these fees, but these systems can be easily programmed not to automatically charge credit card surcharge fees.
Illegal credit card fees occur when retailers and service companies charge credit card surcharge fees on transactions that are paid using debit cards, cash, checks, or any form of payment that is not a credit card. In most states it is legal to pass on credit card processing fees to the consumer but only when that consumer is paying with a credit card. If that consumer is using another form of payment, then these fees are illegal credit card fees.
Speak to a financial services attorney today.
If you feel you’ve been charged illegal credit card fees for some of your transactions, speak to a financial services attorney today. An experienced financial services attorney may be able to help you recover damages through a class action lawsuit if multiple people have been charged these illegal credit card fees. Credit card processing fees are legal in most states but only if you pay for your transactions using a credit card, not a debit card or other form of payment. Don’t go away quietly if you feel you’ve been victimized by illegal credit card fees, speak to a skilled financial services attorney today.
