Articles by Sean Murray

A Business Charged Me a Fee for Paying By Credit Card

A Business Charged Me a Fee for Paying By Credit Card!
Posted on May 4, 2011 at 1:00 AM

We received an e-mail from one of our readers today. It seems consumers are already being bit by the Government’s crusade against the electronic payment industry.

To: the merchant processing resource

Today I was charged a surcharge of 2% extra on a $2,099 purchase. I complained because I thought this was against the Mastercard rules but to no avail. How may I go about lodging a complaint regarding this merchant?

– Doug

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Hi Doug,

We understand your frustration. However, the Wall Street Reform and Consumer Protection Act that passed in July 2010, in addition to the Justice Department’s antitrust lawsuits nullified the payment network rules about surcharging. As we understand it, a business can now charge extra to customers that pay by credit card. This is allowed so long as they apply it to all their customers in a uniform manner (to avoid discrimination), they don’t selectively base it on card issuing bank, and don’t selectively apply it to a particular payment network.

That means if they do it to MasterCard customers, they have to do it for customers that have a Visa, Discover, and any other network. Banks that issue cards must be accepted equally as well. They can’t apply a surcharge to a customer with a Wells Fargo MasterCard, and fail to apply it to a customer with a HSBC MasterCard.

Although they can selectively surcharge customers with rewards, sky miles, or cash back. A customer with no rewards can legally be charged a lower price than a customer with a sky miles credit card. There are higher interchange fees associated with accepting a card with rewards and thus businesses now have the option to pass that cost on to the consumer.

It’s unfortunate the business charged you a fee, but they can do it if they want. Next time threaten to make the purchase with a direct competitor and see if that fee goes away.

We touched a bit on this topic in this article here: https://debanked.com/apps/blog/show/5603447-take-your-rewards-card-and-get-out-of-my-store-

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– deBanked

www.merchantprocessingresource.com

Sony Unlikely to Face Criminal Negligence Charges in Breach

In light of Sony’s data breach, many people are making the case that their weak security constitutes criminal negligence. It may be appropriate considering Sony is an electronics company who should be held to a higher standard. Had they been an international supplier of lumber, we might be willing to give them more leeway. But let us not forget that Sony is the victim here. If a man walks into a bad neighborhood holding handfuls of cash and is robbed, it may very well be his own fault, but to argue his negligence was downright criminal will be a tough sell.

Sony is even less likely to be pursued criminally considering it’s already difficult enough to even convict perpetrators these days. Examine the financial crisis of 2008 and you’ll quickly realize that misdeeds were rarely handled outside of civil court. A shining example is the U.S. v. Deutsche Bank in a recent mortgage fraud case. In an excerpt about it by Fox:

by choosing to bring a civil case, instead of a criminal one, the feds have assured that more alleged fraud on Wall Street during the housing bubble will be met with fines rather than more serious sanctions. The reasons for the reluctance to charge Deutsche Bank or its employees with criminal charges are diverse, but likely come down to the higher burden of proof and collateral damage that go hand-in-hand with criminal charges. “Firms can do significant damage to themselves, to taxpayers and their customers without committing crimes. Negligence, recklessness and stupidity can go a long way,” said Dan Richman, a law professor at Columbia.

 You hear that Sony? Stupidity isn’t criminal, even though many would like it to be. This doesn’t mean they’re off the hook completely since they are already liable for over $2 Billion as a result of customers (as calculated by the Ponemon Institute) canceling their current credit cards and having new ones issued. If card numbers have in fact been stolen, customers have no choice but to take this precaution at Sony’s expense.

Sony will have their day in court but no one will be going to jail…

– deBanked

https://debanked.com

Our Related Articles:

5/9/11 Sony Security Breach Reaches Our Doorstep

5/4/11 Customer Credit Card Information Stolen From Sony

4/30/11 Sony Breach A Result of PCI Compliance Failure

Mega Banks Enter Alternative Payments Market

The banks are losing the fight against the Durbin Amendment but don’t count them out yet. The threat of billions dollars losses from interchange fees revenue has inspired them to innovate. So much so that alternative payment processors such as PayPal will soon face the wrath of a sleeping giant.

Banks launch clearXchange

Bank of America, JP Morgan and Wells Fargo have teamed up to form clearXchange, a payment system for simple bank to bank transfers. In what they have dubbed a ‘coopetition’ (cooperative competition), there’s no new bank or merchant account needed. “PayPal and other systems require you to create an account separate from your bank account to transfer money, this new service will let customers simply log in to their existing bank account and enter the recipient’s name and e-mail address or phone number. The person they’re paying will then instantaneously receive an alert that money is being sent their way.”

And this doesn’t just compete against PayPal, it threatens cash and check payments as well. No longer will you be able to tell your friend that you don’t have any cash on you when they ask for the $20 you owe. D’oh!

Major retailers like Walmart stand to win big as a result of the Durbin Amendment, a triumph that will ultimately come to haunt them. With no interchange fees to earn, banks will get bored of debit cards and eventually phase them out. clearXchange is the new dawn of electronic payments and revenue for the big banks. And guess what? Durbin’s laws aren’t applicable to it. What have we done?

– deBanked

https://debanked.com