Texas merchants can’t add surcharges for credit, debit cards

 The Lone Star State is one of only 10 in the nation that prohibit merchants from charging swipe fees for credit card sales. For the 40 other states, merchants can charge up to 4 percent in extra “convenience fees.”

The Legislature passed a law in 2013 giving real enforcement power to state regulators to go after rogue merchants who charge extra.

It gets even better. The Legislature also passed a law prohibiting the same kind of surcharges on debit cards, too.

All hail the mighty pro-consumer Texas Legislature. (I never got to write those words before.)

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As readers of The Dallas Morning News Dave Lieber Watchdog column first learned, these two obscure bills passed in 2013 will save Texans in overcharges. If you see a merchant charging extra for credit or debit use, take a photograph of a sign proving the illegal surcharge. Or use a receipt as evidence.

debit card

File a complaint with the Texas Office of Consumer Credit Commissioner, which, for the first time because of the new law, is able to use its field agents, investigators and legal staff to go after violators.

“If we receive a complaint, we’ll investigate,” promises Rudy Aguilar, director of the OCCC. Previously, his office sent warning letters because it wasn’t allowed do more.

The no-surcharge law has been on the books for almost 30 years, but no one can remember anyone getting fined. Now administrative financial penalties are on the table, too.

The law was sponsored by state Rep. Cindy Burkett, R-Sunnyvale. She told me state regulators asked for her help to strengthen their enforcement abilities.

A second bill by state Rep. Jose Menendez, D-San Antonio, places debit cards under protective cover, too.

“We worked our backsides off to make that pass,” says Steve Scurlock, executive vice president of Independent Bankers Association of Texas.

“I’m amazed watching the younger people that never have cash. Ever. So it’s really become the banking system of sorts.”

His group supported the changes because they allow consumers and regulators “to make sure people were doing what the law said.”

Merchants can still require a minimum purchase of $10 before a credit card can be used, according to a federal rule. But nobody is allowed to set a minimum purchase level for using a debit card. That comes directly out of the card owner’s account.

There is one exception to the ban on these surcharges. A certain class of “merchant” is allowed to place surcharges on its invoices for using a credit card.

That merchant? Government. Local, county, school district and state government can tack on charges for credit cards for taxes, fees, licenses and other government transactions. Nobody should be surprised by that.

For everybody else, it’s time to start complaining to the Office to Consumer Credit Commissioner.

Dave Lieber's Watchdog Nation won a 2013 writing award from the National Society of Newspaper Columnists

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Are you tired of fighting the bank, the credit card company, the electric company and the phone company? They can be worse than scammers the way they treat customers. A popular book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, shows you how to fight back — and win! The book is available at WatchdogNation.com as a hardcover, CD audio book, e-book and hey, what else do you need? The author is The Watchdog columnist for The Dallas Morning News. Visit our store. Now revised and expanded, the book won two national book awards for social change. Twitter @DaveLieber