We received a call from a customer today about a surcharge from a local restaurant on her debit card for which she wanted the bank to reimburse her. The customer was adamant that she be reimbursed because the AARP stated in an article that it was illegal for her to be charged extra for using a debit card, and to "have the bank reverse the fee". I am trying to get a copy of the article, but it is subscription based.

The CSR involved advised the customer that since she had authorized the transaction that she could not dispute it. I am not familiar with surcharges. Does the bank have any obligation if a customer is charged a surcharge on a debit card? If yes, I would think a receipt showing the surcharge would have to be provided for reimbursement. Our cards are VISA, but I suspect the charge the customer referenced was on a pin network. If the merchant is not allowed to charge these fees, does the bank have any reporting requirements?

What is considered a surcharge - a charge just for using a debit card or if a merchant has added an amount for breakfast meals due to the cost of eggs?

Thanks.

All major card issuers prohibit surcharges for using a debit card. I think you need to get more information from the borrower regarding the actual surcharge, including a copy of the receipt. This would not be a Regulation E issue, as she authorized the charge.

If the amount on their receipt comes in for a different amount than the charge to their account, you may have a Reg E issue. Example, if they swiped/authorized for $10 and have a receipt showing that amount, but the debit came out of their account for $10+a surcharge then it could be a Reg E Error. But the dispute should be limited to the amount of the surcharge and not the $10 that was authorized.

If they authorized the $10 AND the surcharge, then no Reg E error.

I defer to Randy for the rest.

Thank you for the assistance.

Basically it all comes down to what did your customer authorize? We have a few restaurants around here that charge service fees for using a debit / credit card. A favorite restaurant of my wife and kids is a stand alone shop. They charge % fee to help cover their cost. It annoys me (why am I paying you so that I can pay you?) but I understand it. There is a very clear sign at the register and it shows on the final bill - so I authorize these charges. While annoying, I can't dispute these charges under Reg E. Is this a similar scenario to your customer? If so, the fee is authorized.

This is a completely different situation if I never see this charge until the bill settles against my account. My bill is presented to me for $100, no mention of a service fee, and I swipe and sign for $100 - but the charge settles for $105, there is a Reg E claim for $5. I authorized $100, had no knowledge of the extra $5, and it was not included on my bill. I can't dispute the $100, but the $5 is covered by Reg E.

I will repeat: Imposing surcharges on debit card transactions is a direct violation of both VISA and Mastercard rules regardless of how it is presented to the customers, what notices are posted at the business, or how the transaction is processed.

https://usa.visa.com/dam/VCOM/global/support-legal/documents/merchant-surcharging-qa-for-web.pdf

I'm not disputing that - I'm presenting the info only from a Reg E perspective.

If it's a Visa debit card, they (or I guess you on behalf of them) can file a report through Visa. As others said though, not a Reg E if they authorized it.

https://usa.visa.com/Forms/visa-rules.html