Giving the Customer and the chosen Credit Card Company Advanced Written Notice of An Intent to Impose a Surcharge Within 30 days

Scott E. Blakeley, Esq.
October 22nd, 2012

If the settlement agreement in the Credit Card Companies case is approved by the court and agreed to by the class then vendors will be able to pass surcharges incurred in using a credit card for a transaction on to its customers.

However, prior to passing on any surcharge, the vendor must, within 30 days prior to the surcharge fee being passed to the customer, give advanced notice of intent to impose a surcharge to the Credit Card Company chosen for the transaction and to the customer.

The notice must show that the vendor intends to impose surcharges, which shall identify whether the merchant intends to impose surcharges at the brand level or the product level. The notice must also provide clear disclosure to the merchant’s customers of the merchant’s surcharging practices, at the point of interaction or sale with the customer, in a manner that does not disparage the brand, network, issuing bank, or the payment card product being used.

Also, the information on the merchant’s surcharging practices at the point of interaction must include: (i) the amount of any surcharge that the merchant imposes, (ii) a statement that the surcharge is being imposed by the merchant, and (iii) a statement that the surcharge that the merchant imposes is not greater than the applicable Visa or MasterCard Credit Card Cost of Acceptance, which is in effect a calculated average interchange rate.

Lastly, the vendor should provide clear disclosure of the dollar amount of the surcharge on the transaction receipt provided by the vendor to the customers.

While the contents of the notice may be simple enough, it is vital to give notice to the appropriate parties prior to engaging in any surcharging practices.

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