Majority Prevents Unfair Costs On Debit Card Purchases

June 30, 2010

The Senate Democratic Majority has extended an important safeguard to consumers, approving legislation protecting shoppers from paying an extra and unfair charge when they use debit cards to make purchases.
Since 1984, state law has barred merchants from imposing extra fees on credit card users, but that law did not anticipate the now widespread use of debit cards. Today’s action by the Senate (S7267C/Schneiderman), closes this loophole and gives debit card users the same protection.  The legislation also allows merchants to offer discounts to customers who pay by cash or check, and a permits surcharges if a consumer receives cash back after making a debit card purchase – but only on the cash received, not the entire purchase.
The bill passed 60-1.
Senator Eric Schneiderman, lead sponsor of this legislation said, “Today, the Senate reaffirmed a fundamental principle of consumer protection: merchants can’t advertise one price and then charge a higher price at the checkout counter. Seniors and other consumers are under enough economic stress already - they shouldn’t have to pay another tax just to buy the everyday goods they need to get by.  State law doesn’t allow surcharges on credit card purchases, and it shouldn’t allow them for debit cards either.”
Senator José Peralta (D-Queens), Chair of the Senate’s Consumer Protection Committee said, “Many New Yorkers receive unemployment insurance, food assistance, Social Security and other benefits through debit cards.  It is unfair that those who can least afford it be forced to pay extra.  This consumer protection legislation is particularly important and I urge the Assembly to pass it quickly.”
Senator Suzi Oppenheimer (D-Mamaroneck) said, "Debit cards are a convenient way for consumers to avoid credit card debt and better manage their finances.  They should not be an excuse for retailers to impose additional costs at the cash register.  This legislation closes a loophole in existing law and extends protections to the growing numbers of New Yorkers who use this convenient form of payment."
Senator Brian X. Foley (D-Blue Point) said, "In the tough economic times we are facing, it is more important than ever that we ensure consumers have access to debit cards without fear of penalties.  These cards are often utilized by seniors and others on fixed incomes as an alternative to carrying cash or accumulating credit card debt.  By passing this legislation, we are ensuring fairness in the marketplace for consumers, while still protecting small businesses by allowing them to offer cash discounts.  I urge the assembly to pass this legislation sooner rather than later and hope that once it is delivered to the governor he will move swiftly to sign it into law.”
Senator Shirley L. Huntley (D-Jamaica) said, “For many seniors, young people, those who receive government benefits and others on fixed incomes, using a debit card is not a choice – it’s a necessity.  They deserve to be treated the same as any other customer – the price that is advertised is the same price they will pay at the cash register. Ensuring fair play in the marketplace is more important than ever in these trying times.”
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