Surcharge Exception for Public Utilities
Compromises Consumers

Washington, D.C. (Aug. 19, 2005) – Californians are used to being trendsetters in the areas of food, fashion and certainly politics. But a little known bill that has already passed the Assembly and is due to sail through the Senate any day now could set a dangerous trend for Californians and consumers across the nation.

Presently, California law prohibits any retailer in sales, service or lease transaction with a consumer, from imposing a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means. Several other states adhere to similar statute in that merchants are prohibited from imposing a "check out fee" - that is to charge consumers more at the point of sale who pay with plastic. Plenty of research indicates that merchants who accept major credit cards increase the volume of their sales in addition to the amount of each sale. Merchants pay a fee for the vast global network in place that conducts millions of transactions a day and provides security to credit card users. However, credit card taking retailers would rather pass that cost onto consumers by charging higher prices for their goods rather than pay for the privilege of engendering more business and higher sales.

It appears that Southern Cal Edison, who has successfully persuaded some state legislators to move this anti-consumer bill through the usually lively processes of legislative debate without much comment, prefer to go the way of merchants - except that the bill effectively keeps merchants out of the issue entirely and makes the exception for surcharging exclusively for public utilities. It is difficult to point to a more egregious attempt to penalize consumers with blatant special interest legislation that no one seems to be aware of - least of all, consumers.

There is a cost incurred with check transactions and any other acceptable transaction whereby bills are paid. It is simply illogical to target consumers who pay their utility bill with a credit card, the amount of which is immediately credited to their account and paid in full to the public utility.

What's equally perplexing is how this legislation has come as far as the Senate floor and is on the verge of passing. Fair minded legislators representing the concerns and interests of their constituents must take heed - immediately. And consumers need to contact their legislators to let them know this bill is unacceptable and will not be tolerated by the citizens of the largest state in the union. Gone are the days of backdoor deals that benefit the few and harm the many. And if those days aren't gone, then it should be lights out for the dealmakers who have lost sight of what's best for their constituents.

Susan Molinari, National Chairperson
Americans for Consumer Education & Competition