April 19, 2006

Attorney General Corbett takes legal action against Lebanon County convenience store owner accused of overcharging customers who used debit or credit cards

HARRISBURG - Attorney General Tom Corbett today announced that a Lebanon County businesswoman will pay civil penalties and investigation costs to resolve claims that she applied surcharges to debit and credit card purchases without consumers' knowledge.

Corbett said that the Attorney General's Bureau of Consumer Protection entered into an "Assurance of Voluntary Compliance" agreement with Davinder Singh, and her business J.M. Mart and Convenience Store, 102 East Main St., Palmyra, Lebanon County. Singh is accused of violating Pennsylvania's Consumer Protection Law and the federal Truth in Lending Regulation.

The assurance alleges that Singh applied an undisclosed .50 cent surcharge to all credit or debit card purchases of gasoline or convenience store items. Singh allegedly did not post a notice of the surcharge on any of the gas pumps or at the cash register. 

Agents with the Attorney General's Bureau of Consumer Protection said that Singh signed merchant agreements with several major credit card companies including: MasterCard, Visa, Discover and American Express.  Under the terms of those agreements, Singh is charged a fee by the credit card companies for each credit card purchase made at her store.

Singh allegedly added that additional surcharge to customers' purchases in order to reimburse herself for the fees imposed by the credit card companies.  The merchant agreements specifically prohibit passing that fee along to consumers.

In one case, a consumer purchased a soda and a bag of chips in the convenience store with her debit card.  In order to offset the credit card company's charge, Singh allegedly added the unauthorized surcharge to the customer's bill. 
 
"In today's seemingly cashless society, it is not uncommon for consumers to use a debit or credit card at a convenience store, even for small purchases," Corbett said.  "It appears that this particular business owner wanted to accept major credit cards from consumers, but did not want to pay the fees to the credit card companies and chose instead to illegally pass that cost along to consumers."

Under the terms of the assurance, Singh admits no wrongdoing and agrees to:

• Immediately and permanently cease imposing a surcharge on consumers' credit or debit cards.
• Permanently cease violating the Consumer Protection Law and the federal Truth in Lending Regulation.
• Pay $2,000 in civil penalties and the Commonwealth's investigation costs.

Corbett urged consumers to inspect their debit and credit card receipts for possible illegal surcharges whenever they use that method of payment for purchases of goods or services. 

Consumers who suspect that they have been charged an illegal fee for credit or debit card purchases in this case or any other are asked to file a complaint with the Attorney General's Bureau of Consumer Protection by calling 1-800-441-2555 or by visiting the Attorney General's website www.attorneygeneral.gov. Additionally, consumers are asked to alert their credit card company directly.

The assurance was filed in Lebanon County Court of Common Pleas by Deputy Attorney General Kathryn H. Silcox of the Attorney General's Bureau of Consumer Protection in Harrisburg.

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