By Dave Lucas
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Albany, NY – With just days remaining in the current legislative session, pro-consumer organizations and groups representing seniors and credit unions are calling for passage this week of a bill that would ban surcharges on debit cards. Capital District Bureau Chief Dave Lucas reports.
In 1984, New York State banned surcharges on credit cards: debit cards were overlooked, as they were not in common use at the time. Unemployment and Public Assistance are already distributed by debit cards in New York State. Advocates argue that with changes coming to the way federal benefits, particularly social security, are distributed, legislation is necessary to close the debit card loophole. Senator Eric Schneiderman is the bill's lead sponsor.
"It is a fundmental principle of consumer protection that merchants can't advertise one price and then charge a higher price at the checkout counter," said Senator Schneiderman. "But that's exactly what's happening when consumers are stuck with a fee just for using a debit card. State law doesn't allow surcharges on credit card purchases, and it shouldn't allow them for debit cards either. Seniors and other consumers are under enough economic stress already: they shouldn't have to pay another tax just to access their benefits or buy the everyday goods they need to get by."
"Both houses of the Legislature have a great opportunity to nip in the bud nuisance fees on debit cards that threaten the wallets of seniors, those on fixed incomes, young people, and those who receive government benefits," said Karen Scharff, Executive Director of Citizen Action of New York, a multi-issue consumer and social justice organization. "We urge both houses to pass common legislation to ban debit card surcharges before the end of session."
All Social Security is scheduled to be distributed via debit card by 2013. Chuck Bell, programs director for Consumers Union, the non-profit publisher of Consumer Reports, says debit cards often carry additional charges like monthly and activation fees. "The use of debit cards is increasing, because they provide a direct, effective way for households to pay bills off right away, and avoid accumulating household debt," said Bell. "This legislation will ensure that consumers who choose to use debit and prepaid cards will not be penalized with retailer surcharges."
The measure is currently before the Senate and Assembly. Advocates of the measure are hopeful the Senate will pass the bill this week and that a final agreement will lead to Senate and Assembly passage.