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chants – and enforcing that prohibition with criminal pen- While credit card surcharges were not mentioned in the
alties on those merchants' ISOs – Visa's surcharge rules original proposal, the FTC said the issue was raised in
violate First Amendment rights, as applied to the states several comment letters. So, it's on the agency's radar. The
through the Fourteenth Amendment" to the Constitution, FTC suggested, for example, that "If a business includes a
the lawsuit alleges. fee the consumer cannot reasonably avoid to process the
payment for any good or service, such as payment pro-
The suit was brought against Visa specifically, Huber ex- cessing, [that] would be a mandatory ancillary service."
plained, because competing networks (American Express,
Discover and Mastercard) either do not have or do not en- Jonathan Razi, an attorney and expert on credit card sur-
force policies as stringent as Visa's requirements. charging, characterized the notion of the FTC going after
Huber bristles at mention of Visa's secret shopper pro- merchants for surcharging as "a big if" under the proposed
gram. "Visa's use of paid employees, or as Visa has coined rule—especially since the existence of surcharges must be
them, 'secret shoppers,' to audit merchants and enforce its clearly posted at the checkout under Visa rules. Razi also
surcharge rules, is akin to utilizing privately paid police said that he expects "a lot of push back" if the FTC moves
officers to effectuate its goal of continuing to assess quasi- forward with such language.
criminal penalties on ISOs," he said.
Eye on DC Patti Murphy, self-described payments maven of the fourth estate, is
senior editor at the Green Sheet. She also co-hosts the Merchant Sales
There are indications that these fees could get caught up in Podcast, and is president of ProScribes Ink. You can reach her at patti@
the Biden Administration's declared war on junk fees. In proscribes.net.
November 2023, the Federal Trade Commission proposed
a new rule on "unfair or deceptive fees," for the non-bank
financial services providers it oversees. The commission
said it was specifically interested in add-on fees that in-
flate the total cost of goods and services.

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