New York Bill Against Credit Card Fees

On December 13, 2023, New York Governor Kathy Hochul signed Senate Bill S1048A into law requiring sellers that impose credit card surcharges to post the total price, inclusive of the surcharge. In addition, the surcharge to customers may not exceed the amount of the surcharge charged to the business by the credit card company for such credit card use. Per the legislative history, “This bill is necessary to prevent consumers from being misled when making a purchase using their credits cards.”

New York’s law, which goes into effect in mid-February, builds on efforts by the FTC and other states (which we have reported about here and here) to combat so-called “junk” or “hidden” fees imposed by merchants. Under the New York law, merchants may offer multi-tiered pricing consisting of (1) the cash price and (2) the total cost if paying by credit card. However, they must clearly and conspicuously post the credit card price inclusive of the surcharge, and the final price of the transaction, including the surcharge, cannot amount to a price that is higher than the purchase price. And, per the bill, it is not sufficient merely to indicate to consumers that they will be paying a particular surcharge percentage (e.g., adding a 3% charge for a credit transaction); again, the seller must indicate the total price, in a dollar amount, inclusive of the surcharge.

The law will be enforced by the NY Attorney General and by municipal consumer affairs offices or local governments. Sellers who violate the law may be subject to $500 in civil penalties for each such violation.