CTWatchdog: Credit Card Issuers Oppose Minimum Purchase Requirements

Posted on: Wednesday, July 21st, 2010
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By George Gombossy, CTwatchdog.com

Marcus Patten is a consumer advocate. A full-time associate television producer from Bristol, Patten has been carrying on a small battle on behalf of consumers like himself for the past year.

Patten was upset about signs he saw in stores – especially gas stations – saying that in order to charge a purchase, customers needed to spend at least $10. He decided to find out if that requirement was permitted.

He called Visa, which told him to call the bank that issued his Visa card – Webster Bank in Connecticut. The bank customer service representative told him correctly that Visa – along with MasterCard and Discover Card – did not allow a minimum-purchase requirement.

Knowing that he was on solid footing, Patten began his crusade.

Whenever he went to a store and saw such a sign he explained to the clerk that it was improper and that the major credit card companies had rules prohibiting minimum purchase requirements.

If he could not convince the clerk to waive the store's policy, Patten said he called Webster Bank and reported the offending store.

"It’s an economic hardship to make me buy $10 worth of stuff when I simply want to buy a bottle of Gatorade," the Bristol native told me.

He said he understood the position of store owners that they had a pay a minimum fee to the credit card companies for each charge, and said he had no problem in paying an extra 50 cents to use his credit card for a small purchase.

After reporting at least four stores and having debates at many others, Patten contacted the Bristol Press to tell them that everyone should know their rights about using their credit cards. The Bristol Press is one of 11 newspapers that carry my weekly column, and its editor – James Smith – was kind enough to send Patten's suggestion to me.

Frequently, Patten said, he was able to convince clerks that the policy was wrong and they waived it.

"It was probably just to get me out of the store," he quipped.

In other cases, he said he was able to educate the teller about the rule. In general, he said, his sense was that clerks were given the wrong information by the store owners.

Too many people allow stores, businesses, and politicians to take advantage of them because they either don't want to get into a conflict or don't have the time, so I find it refreshing when I hear of people like Patten who stand up for their rights in a legal, diplomatic, and nonviolent fashion.

With that being said, Patten may have to find another cause. The 2,000-plus pages in the financial "reform" bill that passed Congress last week include language that may permit stores to require a minimum $10 purchase for credit card sales.

Webster Bank and other banking sources say that while they have not had a chance to digest every word in the legislation, it appears that it does authorize regulations that would permit stores to give discounts when people pay cash, and permit minimum credit card purchase requirements.

CHECK YOUR CREDIT CARD STATEMENTS CAREFULLY
Two recent incidents serve as a reminder that everyone should closely examine every credit card statement to make sure improper charges are not included.

The Federal Trade Commission busted up what appears to be a four-year scam in which more than $10 million in small, bogus charges were added to about a million credit card accounts.

Phony companies were used to add $10 or less in small charges.

A second, smaller scam involved the popular Apple iTunes program.

Hackers were able to charge scores of customers for unwanted or unordered applications.

I’ve heard from two iTunes users who said they were victims.

Jason wrote me that he discovered three unauthorized purchases through his iTunes account, adding up to more than $100.

"Apple is terrible, their customer service is pathetic, no live support for iTunes store," Jason posted on CtWatchdog.com. "And luckily my bank will recover" the money.

You can reach The Watchdog at George@connecticutwatchdog.com and he will answer as many emails as he can. Please check out his site, www.ctwatchdog.com for comprehensive consumer, health, finance, media, internet, computer, travel and education tips.

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George Gombossy can be reached at george@connecticutwatchdog.com or you can send him a letter at Connecticut Watchdog, PO Box 23, East Longmeadow, Ma., 01028.

He will respond to as many inquiries and complaints as time permits. Please check out ctWatchdog.com for other consumer, health and finance tips.