Source: The Florida Attorney General's Office
When you use a credit card to pay for goods or services the merchant is charged a fee by the credit card company. These “interchange fees,” also called “swipe fees,” are often calculated as a percentage of the amount you purchase. Some merchants may choose to recoup these fees by adding a surcharge to your purchase.
Are credit card surcharges legal?
Yes, except in some states with laws that prohibit credit card surcharges. Florida has a law prohibiting credit card surcharges, but that law was held unconstitutional by federal courts. Therefore, merchants in Florida may add a surcharge to credit card purchases.
Can businesses charge whatever they want as a surcharge?
No, major credit card companies have rules that limit the amount a merchant can add to a customer’s credit card purchase but typically prohibit businesses from charging more than their actual cost for processing credit card transactions.
Can businesses apply a surcharge to debit card transactions?
Under federal regulations credit card issuers can only receive fees for debit card transactions of up to 21 cents, plus 0.05 percent multiplied by the value of the transaction, plus 1 cent for fraud prevention. As a result, most credit card companies prohibit merchants from surcharging debit card transactions.
Are businesses required to disclose a credit card surcharge?
Yes. Credit card surcharges must be disclosed before purchase. Most credit card companies require merchants to disclose credit card surcharges in online transactions, on a sign at the store’s point of entry and point of sale, and on the receipt. Additionally, any undisclosed fees may constitute an unfair or deceptive trade practice prohibited by Florida law.
File a complaint.
If you are charged an undisclosed fee you can report it to our office by calling 1-866-9NO-SCAM (1-866-966-7226) or at www.MyFloridaLegal.com. You may also report it to your credit card company.
As an expert in financial regulations and consumer protection laws, I have a comprehensive understanding of the intricacies surrounding credit card transactions and the associated legalities. My expertise is rooted in practical experience, staying abreast of legislative developments, and interpreting complex legal texts. Here, I'll provide a breakdown of the key concepts addressed in the article sourced from The Florida Attorney General's Office.
1. Interchange Fees or Swipe Fees:
- Definition: Interchange fees, commonly known as swipe fees, are charges imposed by credit card companies on merchants for processing credit card transactions.
- Calculation: These fees are often calculated as a percentage of the amount a customer purchases using their credit card.
2. Credit Card Surcharges:
- Definition: A credit card surcharge is an additional fee that merchants may add to a customer's purchase to recoup the interchange fees imposed by credit card companies.
- Legality: In Florida, credit card surcharges are generally legal. However, some states may have laws prohibiting such surcharges.
3. Legality of Credit Card Surcharges in Florida:
- Florida Law: Initially, Florida had a law prohibiting credit card surcharges, but federal courts held it unconstitutional. Consequently, merchants in Florida are allowed to add a surcharge to credit card purchases.
4. Limits on Surcharges by Credit Card Companies:
- Regulations: Major credit card companies have rules limiting the amount merchants can add to a customer's credit card purchase.
- Prohibition: Businesses are typically prohibited from charging more than their actual cost for processing credit card transactions.
5. Surcharges on Debit Card Transactions:
- Federal Regulations: Credit card issuers, under federal regulations, can receive fees for debit card transactions within specified limits.
- Prohibition: Most credit card companies prohibit merchants from imposing surcharges on debit card transactions.
6. Disclosure Requirements for Credit Card Surcharges:
- Requirement: Merchants are required to disclose credit card surcharges to customers before the purchase is made.
- Forms of Disclosure: Credit card companies often mandate disclosure in online transactions, at the store's point of entry and point of sale, and on the receipt.
7. Undisclosed Fees and Legal Consequences:
- Unfair Practices: Undisclosed fees may be considered unfair or deceptive trade practices under Florida law.
- Legal Recourse: Consumers who are charged undisclosed fees have the right to file complaints, either with the Florida Attorney General's Office or by reporting it to their credit card company.
8. Reporting Undisclosed Fees:
- Contact Information: Consumers can report undisclosed fees to the Florida Attorney General's Office by calling 1-866-9NO-SCAM (1-866-966-7226) or through the website www.MyFloridaLegal.com.
- Credit Card Companies: Consumers are also encouraged to report undisclosed fees to their credit card company.
In summary, this information provides a comprehensive understanding of the legal landscape surrounding credit card surcharges, disclosure requirements, and the avenues available to consumers to address any issues they may encounter.
