LEGAL NEWSLINE

PROVIDENCE, R.I. (Legal Newsline) - Rhode Island Attorney General Peter Kilmartin announced his support on Thursday for a bill that would prohibit retailers from imposing a surcharge on consumers who pay using a credit card.

An Act Relating to Commercial Law - General Regulatory Provisions - Surcharges on Credit Card Transactions, or 2014 H7007, would still allow retailers to provide a discount for individuals paying with cash or checks during transactions. A hearing was scheduled on Thursday before the House Committee on Corporations.

"Credit card fees are big business for Visa and MasterCard," Kilmartin said. "Rhode Island consumers should not be penalized with a four percent surcharge simply for paying with credit cards. It is imperative that we take steps to protect our consumers from that possibility."

In November 2012, a national settlement removed restrictions that prevented retailers from passing on credit card processing fees to consumers. On January 27, 2013, retailers were allowed to impose a four percent surcharge on transactions paid by a credit card. Nine states already had statutes that prohibited the practice, including Connecticut and Massachusetts, and Utah passed a prohibition on the practice last year.

Kilmartin said the proposed legislation would level the playing field and protect Rhode Island consumers from fees.

"We have collectively worked to improve the business climate in Rhode Island and make the state competitive with its neighbors," Kilmartin said. "In this instance, combined with lower sales tax and a prohibition on such credit card surcharges, Connecticut and Massachusetts retailers have a big advantage in attracting consumers from Rhode Island. Passage of this act would help level the playing field and protect consumers from unnecessary and costly fees."

Kilmartin proposed an amendment to the legislation that would make a violation of the law a civil penalty instead of a criminal penalty.