I-TEAM: It’s illegal to charge a fee for using a credit card in CT, but how often is it happening?

Have you ever been charged more money for using a credit card instead of cash?
Published: Oct. 12, 2022 at 6:06 PM EDT|Updated: Oct. 12, 2022 at 7:08 PM EDT
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(WFSB) - Have you ever been charged more money for using a credit card instead of cash?

Well, that’s illegal in Connecticut.

Bob Harrigan would say he’s just an ordinary guy from Meriden.

But he’s also become an expert at speaking up when he’s charged for using a credit card.

It’s illegal, and it’s still happening, despite the law being on the books for more than three decades.

“It’s still dollars coming out of your pocket that’s coming out of your pocket illegally,” says Bob Harrigan. “It started with a local garage where I went in for a brake job and it was 600 dollars and change and when I picked it up, it was an extra 24 dollars on top of that. I said, wait a minute, what is this? I looked it up and it was not on the up and up.”

In the State of Connecticut, a business cannot charge you a fee for using a credit card. These fees are known as surcharges.

Sometimes the surcharges are not obvious.  Businesses might call them transaction fees, processing fees or convenience fees.

Those fees are still not allowed despite what a business calls them, unless you’re a city, town, government agency or court. But we’ve also learned that the Lamont administration asked state agencies not to charge the fee for now, beginning June 2022, to help ease the financial burden on customers.

“I went back to the guy, and he didn’t know anything about it,” says Harrigan. “He refunded me the 24 dollars and changed his policy.”

The Department of Consumer Protection is in charge of enforcing the surcharge law.

A spokesperson for the agency tells the I-Team they’ve handled 203 surcharge complaints from customers, since 2018, the most recent data available.

The most recent investigations happening at a Danbury Auto Collison Center, a pizza place in Norwalk and an Asian restaurant in New Hartford.

The Paperback Cafe was one of the places Consumer Protection received a complaint about.

“We do breakfast and lunch, a lot of healthy options,” says Kate Connolly, the owner.

Connolly bought the cafe in May and said she didn’t know it was illegal.

“When I bought the business, the previous owners had a system that automatically charged the surcharge to the customer,” says Connolly.

When the state called her, Connolly says she stopped.

Consumer Protection says most businesses comply after they get involved and give refunds if the original complaint is submitted with the customer’s name.

The agency says they have never had to give a fine. Until May 2022, they were not able to under the law. They now have the authority to issue fines but have not had to do so yet.

Connolly was ready and willing to follow the law but adds it can be hard on her cafe, when she’s charged an average fee of 4% per credit card transaction. She says municipalities and courts shouldn’t be allowed to, if she can’t.

“We encourage folks to pay in cash just so we don’t have to pay those fees,” says Connolly.

That encouragement is a 4% discount for customers who use cash.

Under state laws, that is allowed as long as the discount for using cash is prominently advertised, like on Paperback Cafe’s menus.

“I’ve considered being cash only and that is incredibly inconvenient for a lot of people. I’ve considered putting an ATM in. But I mean, in this world, that’s just how it is,” says Connolly.

As for gas stations, which Consumer Protection says many people bring up, they can’t add a surcharge, but they have to show you the cash price and credit price, if they differ.

Remember, debit cards are often used as credit cards, not cash, in most places.

If you think you’re being charged illegally, file a complaint with Consumer Protection. You can do so here: https://portal.ct.gov/DCP/Complaint-Center/Complaint-Forms-and-Procedures