New Law to Penalize Consumers Who Pay with Plastic

There’s an anti-Consumer bill in Texas that, if passed, would water down the current state law by Penalizing Consumers Who Pay with Plastic. Americans for Consumer Education and Competition (ACEC) is warning Texas consumers that proposed “Check Out Fees” would threaten their consumer choice.

Americans for Consumer Education and Competition (ACEC) is alerting its Texas members that a new anti- consumer bill, HB 1236, being heard before the Financial Institutions Committee in the Texas State House of Representatives today, would allow Texas retailers to pass the cost of electronic transactions onto consumers who choose to pay with plastic. HB 1236 would amend current Texas statute which prevents merchants from surcharging customers who choose to pay for their purchases with credit cards.

“Legislation similar to HB 1236 in Texas was popping up in state legislatures around the country last year and we are seeing a similar pattern emerge as the 2007 sessions begin, said Rebecca Reid, Executive Director of ACEC, a consumer rights and financial literacy advocacy organization. “Consumers need to be aware of this national campaign filtering down into the states and should take heed from Australian consumers who are now feeling the brunt of promises broken by merchants who claimed that with increased regulation they would lower prices. Aussie consumers are paying the same prices and in some cases, getting surcharged on top of it.”

While HB 1236 calls for merchants to notify consumers prior to adding a surcharge fee to a purchase made using a credit card, there are no provisions for enforcement of that requirement. Several states, including Texas, have No Surcharge language in statute that protects consumer choice and most credit card companies prohibit merchants from passing the cost of electronic payment processing onto the consumer.

HB 1236 would allow merchants to surcharge consumers who choose to pay with credit cards for purchases not exceeding $10, yet a study conducted by the Association of Motor Vehicle Administrators shows check processing costs more than the processing of electronic transactions. Reid noted that a quick run for goods into a convenience store where prices are already drastically marked up could end up costing more than the convenience is worth.

ACEC recently launched a microsite,, dedicated to educating consumers about the threat of check out fees. The site provides a function for sending letters that urge elected officials to protect consumer rights and to preserve consumer choice.

Americans for Consumer Education & Competition advocates for financial literacy and consumer rights initiatives. ACEC communicates with more than 90 thousand consumers interested in issues from financial literacy to budgeting for retirement to cardholder benefits and rights. In addition, ACEC serves as a clearing-house for information on financial issues, as the organization monitors, tracks and provides analysis of financial legislation and litigation that has a direct impact on consumers.

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