N.Y. judge sides with merchants on card surcharge
Oct. 7, 2013 – A federal judge in New York, siding with merchants, issued a preliminary injunction to block penalties applied under state law for assessing customers a surcharge for using credit cards.
According to Reuters, U.S. District Judge Jed Rakoff agreed with retailers who alleged, among other things, that the law “violated their free speech rights by prohibiting them from alerting customers to the extra costs of paying with credit cards.” Rakoff said the law “perpetuates consumer confusion by preventing sellers from using the most effective means at their disposal to educate consumers about the true costs of credit-card usage.”
The New York state attorney and Manhattan district attorney, Reuters reported, argued that it was unfair to consumers to have a surprise surcharge in addition to the advertised price of an item. According to the article, the potential penalties under the law include a one-year prison term and a $500 fine.