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Credit Card Applications » News » Other » California Law Comes With Considerable Loophole

California Law Comes With Considerable Loophole

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California Law Comes With Considerable Loophole

A law by Californian politicians comes with a serious oversight in its planning. This proposed law will attach charges when a person opts to pay for their bills with their plastic, instead of either cash or check.

It just depends on where they pay at. Many institutions, according to an article appearing in the Los Angeles Times, “exploit” this loophole to their advantage, creating what are called “convenience fees” that are only all too convenient for them. The loophole exists in the state law of the California Civil Code, Section 1748.1 and calls out “retailers” in particular.

Public agencies and utilities are exempt from this regulation, however; which is precisely where the problem stems from.

The definition of a retailer then, if following the law’s logic “every person other than a card issuer who furnishes money, goods, services or anything else of value upon presentation of a credit card by a cardholder.” Which would be, then, most private sector entities, such as universities like UCLA, as the law further states does not pertain to “the state, a county, city, city and county, or any other public agency.”

UCLA has come under fire for its decision, effective last August, to add a 2.75% fee for students using their credit and debit cards to pay for tuition, among other things.

Utility companies, like those that provide gas and electricity for millions of people, often charge extra fees to credit or debit-using customers as well. They have another set of guidelines to adhere to, courtesy of the California Public Utilities Code.

Those guidelines try to enforce that utility companies “an electrical, gas or water corporation that offers customers credit card or debit card payment options may recover the reasonable expenses incurred by the electrical, gas or water corporation for providing the customers the option of paying their bills by credit card or debit card.”

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