||| FROM BOB DISTLER |||
Washington State Ferries has announced that, beginning March 1, it will add a 3% surcharge to “all card transactions.”
The so-called Durbin amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010 specifically bars surcharges on debit card transactions, whether processed as debit or credit by a merchant.
I wonder whether either the state legislature or WSF are aware of this provision of federal law, and if not, why not. We need to contact our lawmakers now to protest this illegal action before it goes into effect.
This is a copy of the message sent to Senator Liz Lovelett through the Legislature Website.
HOUSE INTERNET E-MAIL DELIVERY SERVICE
SENATE INTERNET E-MAIL DELIVERY SERVICE
TO: Senator Liz Lovelett
CC: Representative Debra Lekanoff,
Representative Alex Ramel
SUBJECT: Washington State Ferries Surcharge on Card Transctions
MESSAGE:
Relating to the enactment of RCW 47.60.860, Washington State Ferries has announced that, beginning March 1, it will add a 3% surcharge to “all card transactions.”
The so-called Durbin amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010 specifically bars surcharges on debit card transactions, whether processed as debit or credit by a merchant.
It appears that, following legisdative direction, WSF is proceeding to take this action in contravention of federal law.
At this late date, what should be done to preclude such surcharges on debit card usage from going into effect?
RESPONSE REQUESTED: Robert S. has requested a response to this message.
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Thank you Bob for bringing this illegitimate fare increase to everyone’s attention. For many of us, a 3% increase in ferry fares may not be that painful, a fact that WSF is apparently counting on, but note that that 3% is being added on top of all the legal rate increases to which we’ve been subjected! WSF needs to balance their budget but but it should not be done this way. There are mechanisms in place for legally increasing rates; this sneaky card “fee” is unethical and almost certainly illegal, at least in terms of debit cards. I know for a fact that banks charge a minimal amount for processing debit cards, so this is plainly and purely a rate increase. A friend has suggested we all pay with cash to let WSF we don’t appreciate the sneaky fee!
The rule that prohibits surcharges on debit cards is in the US Code of Federal Regulations (CFR) , placed there by the Federal Reserve. The Durbin amendment was the legislation that amended the Electronic Fund Transfer Act (EFTA) of 1978 by adding Section 920.
To implement EFTA’s Section 920, the Federal Reserve Board issued Regulation II (12 CFR Part 235). That regulation reinforces that merchants cannot add a surcharge to debit card transactions, even if the card is processed as “credit” (signature-based) rather than using a PIN.
WSF cannot simply ignore the CFR. There are no excuses for not doing this correctly – the legislature’s requirement for WSF to collect 3 percent on credit cards has been in for 11 months.
WSF’s tollbooth terminals can automatically identify a card as debit or credit by reading the Bank Identification Number (BIN)—the first 4 to 9 digits of the card—and checking it against a database. The chip or magnetic stripe transmits this data to a processor that recognizes the card type, frequently using EMV tags to differentiate them.
Bank Identification Number (BIN): The first 6-8 digits of a card are unique to the issuing bank and card type, allowing the terminal to immediately distinguish between credit and debit.
EMV Chip Tags: For chip cards, the terminal reads specific tags (e.g., Tag 0x9F0A) that define the product type, including debit, credit, or prepaid.
Processing Networks: Debit cards are routed to specialized networks like Maestro or Interlink, while credit cards use credit network pathways, signaling the difference to the POS system.
Database Lookup: The terminal sends the card information to a processor, which compares the BIN against a database to determine if it is debit or credit.
There is no excuse for WSF not complying with federal regulations.
Debit card transactions should not be charge a SURCHARGE. We cannot use cash to pay for cards online and debit cards are attached to checking accounts.
Foul Play!