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Did the DMV violate their agreement?

B

blinblue

Senior member
So I read that topic about the guy who was required to meet a minimum amount to charge his card at a bar. That's the first I heard that both Visa and MasterCard do not allow a minimum charge or a percentage fee.
So I was at the DMV today in Illinois, and what do I see, but a sign on the wall saying they now accept MasterCard, Discover and American Express (no mention of Visa, maybe they already accepted it and they recently added the rest, not sure), and right below it it said they will charge a 2.8% surcharge or 65 cents, whichever is higher, to any payment made by card.

In the mastercard rules (see here) in section 5.9.2 (page 90 on the PDF) it states that these charges are not allowed.

We all hate the DMV, and I believe each one of us has some desire to give them the taste of their bureaucratic medicine. So I want to report this violation.

So what's the best way to do this. I think it would be fun to contact MasterCard, and then contact some local newspaper and see if they will run a story on it. Any other thoughts?
 
They can offer a cash discount, but not charge extra for plastic. So their wording definitely sounds like you have a case.
 
Originally posted by: OCguy
I'm going to guess they have a different agreement for government entities.
Click to expand...

That's what I was thinking too. In the PDF it does state something about exceptions, but it is vague

"
A Merchant is permitted to charge a fee (such as a bona fide commission, postage, expedited service or convenience fees, and the like) if the fee is imposed on all like transactions regardless of the form of payment used, or as the Corporation has expressly
permitted in writing.
"
 
Now that you mention it, the County of Sacramento was trying to charge me a $20 surcharge if I paid a parking ticket by Visa/MC as well. But really, what are you gonna do about it? You can't take on City Hall.
 
Originally posted by: waffleironhead
is this any different than charging more for gas when using a cc?
Click to expand...

In my experience you will see CASH $X.XX CREDIT ($X.XX +.10). In this case they are giving you a cash discount.
 
I work for a gov't entity, and we charge some fee to anyone that is using a credit card, because we don't process those transactions... we pass those transactions on to a third party, and they process them. The fee is the fee that our processing company charges us, rather than any fee that the credit card companies charge the processing company. That is to say, we have no agreement directly with any credit card company (so their rules don't apply).
 
Originally posted by: TheKub
Originally posted by: waffleironhead
is this any different than charging more for gas when using a cc?
Click to expand...

In my experience you will see CASH $X.XX CREDIT ($X.XX +.10). In this case they are giving you a cash discount.
Click to expand...

If they were giving a cash discount wouldn't it read. GAS $x.xx(cash x.xx -10)
 
Originally posted by: waffleironhead
Originally posted by: TheKub
Originally posted by: waffleironhead
is this any different than charging more for gas when using a cc?
Click to expand...

In my experience you will see CASH $X.XX CREDIT ($X.XX +.10). In this case they are giving you a cash discount.
Click to expand...

If they were giving a cash discount wouldn't it read. GAS $x.xx(cash x.xx -10)
Click to expand...

Except the prices on the sign are 5x the size of the text and the lowest price is always on the top. Its the same game that some gas stations with car washes play.
 
Originally posted by: GeekDrew
I work for a gov't entity, and we charge some fee to anyone that is using a credit card, because we don't process those transactions... we pass those transactions on to a third party, and they process them. The fee is the fee that our processing company charges us, rather than any fee that the credit card companies charge the processing company. That is to say, we have no agreement directly with any credit card company (so their rules don't apply).
Click to expand...

Still doesn't make it legal in any sense.
 
Originally posted by: ScottFern
Originally posted by: GeekDrew
I work for a gov't entity, and we charge some fee to anyone that is using a credit card, because we don't process those transactions... we pass those transactions on to a third party, and they process them. The fee is the fee that our processing company charges us, rather than any fee that the credit card companies charge the processing company. That is to say, we have no agreement directly with any credit card company (so their rules don't apply).
Click to expand...

Still doesn't make it legal in any sense.
Click to expand...

How is it illegal?
 
Having worked with CC systems in the past, I cna tell you that NO they cannot charge more for a CC transaction. They CAN however offer a "cash discount"
 
Certain entities are allowed to charge a convenience surcharge for credit cards. Government stuff comes to mind, as well as the place that would process my rent payments if I wanted to pay by credit card.
 
Originally posted by: blinblue
Originally posted by: OCguy
I'm going to guess they have a different agreement for government entities.
Click to expand...

That's what I was thinking too. In the PDF it does state something about exceptions, but it is vague

"
A Merchant is permitted to charge a fee (such as a bona fide commission, postage, expedited service or convenience fees, and the like) if the fee is imposed on all like transactions regardless of the form of payment used, or as the Corporation has expressly
permitted in writing.
"
Click to expand...

might be considered a convenience fee
 
Originally posted by: zerocool1
Originally posted by: blinblue
Originally posted by: OCguy
I'm going to guess they have a different agreement for government entities.
Click to expand...

That's what I was thinking too. In the PDF it does state something about exceptions, but it is vague

"
A Merchant is permitted to charge a fee (such as a bona fide commission, postage, expedited service or convenience fees, and the like) if the fee is imposed on all like transactions regardless of the form of payment used, or as the Corporation has expressly
permitted in writing.
"
Click to expand...

might be considered a convenience fee
Click to expand...

Unless every single person has to pay the fee (IE, cash, debit, or credit), they are breaking the rules unless they happen to have a different merchant agreement than other companies.
 
Originally posted by: GeekDrew
Originally posted by: ScottFern
Originally posted by: GeekDrew
I work for a gov't entity, and we charge some fee to anyone that is using a credit card, because we don't process those transactions... we pass those transactions on to a third party, and they process them. The fee is the fee that our processing company charges us, rather than any fee that the credit card companies charge the processing company. That is to say, we have no agreement directly with any credit card company (so their rules don't apply).
Click to expand...

Still doesn't make it legal in any sense.
Click to expand...

How is it illegal?
Click to expand...

If you do charge this extra fee you are violating the Mastercard agreement you signed when you accepted their services plain and simple. That's why that form exists.
 
Originally posted by: ScottFern
Originally posted by: GeekDrew
Originally posted by: ScottFern
Originally posted by: GeekDrew
I work for a gov't entity, and we charge some fee to anyone that is using a credit card, because we don't process those transactions... we pass those transactions on to a third party, and they process them. The fee is the fee that our processing company charges us, rather than any fee that the credit card companies charge the processing company. That is to say, we have no agreement directly with any credit card company (so their rules don't apply).
Click to expand...

Still doesn't make it legal in any sense.
Click to expand...

How is it illegal?
Click to expand...

If you do charge this extra fee you are violating the Mastercard agreement you signed when you accepted their services plain and simple. That's why that form exists.
Click to expand...

But they did not sign an agreement with Mastercard if I understand correctly.
 
Originally posted by: ScottFern
Originally posted by: GeekDrew
I work for a gov't entity, and we charge some fee to anyone that is using a credit card, because we don't process those transactions... we pass those transactions on to a third party, and they process them. The fee is the fee that our processing company charges us, rather than any fee that the credit card companies charge the processing company. That is to say, we have no agreement directly with any credit card company (so their rules don't apply).
Click to expand...

Still doesn't make it legal in any sense.
Click to expand...

WTF does legal have to do with it. There are no laws that say you can't charge more for a credit card transaction.
 
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