NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1370
SPONSOR: Zebrowski TITLE OF BILL:
An act to amend the general business law, in relation to credit card
surcharge or fee notice requirements; and to repeal section 518 of such
law relating thereto
PURPOSE OR GENERAL IDEA OF BILL:
This bill would prohibit merchants from imposing a fee or surcharge for
use of a credit card as payment unless they adhere to certain require-
ments.
SUMMARY OF PROVISIONS:
Section one of the bill repeals section 518 of the general business law
by replacing it with a new section 518 as it relates to requiring
merchants to post two prices where prices are displayed, one that credit
card customers are charged and the other to customers using other
accepted payments. The merchant must also post notice of the imposition
of a surcharge at entry, and at the point of sale. The section requires
such notice for online and phone sales. The section places a cap on the
surcharge of 4% or the amount charged to the seller to process the cred-
it card; whichever is lower. The section prohibits the imposition of a
credit card surcharge on debit cards.
Section two of the bill relates to the effective date.
JUSTIFICATION:
Recently, a court ruling (Expressions Hair Designs, Inc v. Schneider-
man) struck down the prior New York law prohibiting credit card
surcharges. This bill will ensure there are proper notice requirements
and other restrictions to protect consumers from hidden fees.
This bill seeks to regulate the imposition of credit card surcharges to
ensure that consumers are not subject to hidden fees. By displaying two
prices, it clearly and unambiguously informs the customers the price
they will be charged based on their form of payment. The notice require-
ment will expose consumers to multiple opportunities to be made aware
that the merchant will impose a fee for using a credit card prior to
purchase. This will allow the consumer to make an informed decision on
whether to shop at an establishment that utilizes a credit card
surcharge. The bill also caps the surcharge to no more than the amount
the seller is charged to prevent any profiting off of a surcharge.
PRIOR LEGISLATIVE HISTORY:
A.314 of 2021-22
A.8707 of 2020
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become law.
STATE OF NEW YORK
________________________________________________________________________
1370
2023-2024 Regular Sessions
IN ASSEMBLY
January 17, 2023
___________
Introduced by M. of A. ZEBROWSKI -- read once and referred to the
Committee on Consumer Affairs and Protection
AN ACT to amend the general business law, in relation to credit card
surcharge or fee notice requirements; and to repeal section 518 of
such law relating thereto
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 518 of the general business law is REPEALED and a
2 new section 518 is added to read as follows:
3 § 518. Credit card surcharge; notice requirements. No person, firm,
4 partnership, association or corporation who is engaged in a sales trans-
5 action may impose a surcharge or fee for use of a credit card as payment
6 for the sale of goods or services unless such seller complies with the
7 following requirements:
8 1. Displayed prices, including but not limited to advertisements,
9 shall include two prices, one of which is the price charged to consumers
10 using a credit card and the other is the price charged to consumers
11 using an accepted form of payment other than a credit card.
12 2. A notice shall be posted that explains the imposition of the
13 surcharge or fee, the amount of the surcharge and which credit cards are
14 subject to the surcharge or fee. Such notice shall be legible and posted
15 at the point of entry and the point of sale. If the sale of goods or
16 services is processed through a website, the seller must post such
17 notice on the home page and the point of sale webpage. If the sale of
18 goods or services is processed over the phone, such notice including all
19 required information shall be verbally disclosed to the customer. The
20 notice required by this section shall be prominently and conspicuously
21 posted at the required locations in a minimum size sixteen font.
22 3. No surcharge or fee shall exceed four percent of the total trans-
23 action or the actual amount to be charged to the seller to process the
24 credit card transaction, whichever is less.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00967-01-3
A. 1370 2
1 4. No seller shall impose a surcharge or fee for the use of a debit
2 card.
3 § 2. This act shall take effect on the ninetieth day after it shall
4 have become a law.
