State sends warning letters about credit card fees to 14 NJ businesses

More and more consumers have been surprised in recent months when restaurants started charging a fee to use a credit or debit card without telling consumers ahead of time.

While the charges are legal, failing to disclose them is not.

In response to complaints, the Attorney General and the Division of Consumer Affairs has sent out cease and desist warning letters to more than a dozen restaurants, retailers and service providers, alerting the merchants that they must disclose the total selling price, including credit and debit surcharges, to consumers.

Fourteen letters were sent to New Jersey businesses in all, cautioning them to “cease and desist from failing to disclose the total selling price of merchandise and not notifying consumers of card surcharges, the agencies said.

“Consumers deserve to know exactly how much they are paying for a product or a service, acting Attorney General Matthew Platkin said. “Any card surcharges need to be communicated clearly and in advance.”

As business are facing higher costs, they’re starting to pass on the fees they are charged from financial institutions to process credit and debit cards.

The lack of disclosure is especially important at restaurants, where if the charge is not posted on a menu or with clear signage, patrons may finish a meal before seeing the charge on a check. Compare that to a clothing retailer, where it’s easier to change your mind about a purchase when you see a sign by the register.

“We are putting merchants on notice that the Division is receiving complaints and that we are focused on their practices,” said Cari Fais, acting director of Consumer Affairs. “We urge merchants to immediately ensure that they are complying with the law and not hitting consumers with surprise surcharges.”

A new bill would require notification by all merchants, but it specifically addresses restaurants, saying the notification must be “in the customer entry area or on a printed menu.” It will also prohibit businesses from charging consumers a fee that’s larger than what it pays to the credit card processor.

“A person dining out at a restaurant must be notified of the existence of a credit surcharge before they order a meal,” bill sponsor Deputy Assembly Speaker Paul Moriarty, D-Gloucester, said when the bill was introduced in June. “A reasonable consumer may choose to dine elsewhere or stop at an ATM rather than pay the additional fee.”

Violations would fall under the Consumer Fraud Act and lead to a fine of not more than $ 10,000 for a first offense and not more than $ 20,000 for any subsequent offense, the bill says.

If you think a merchant is improperly charging customers or failing to disclose charges in advance, you can file a complaint at njconsumeraffairs.gov or call (800) 242-5846.

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Karin Price Mueller may be reached at KPriceMueller@NJAdvanceMedia.com. Follow her on Twitter at @KPMueller.

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