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Florida Supreme Court Opens The Doorway To Excessive Credit Card Convenience Fees

In February (2022), the Florida Supreme Court issued an opinion allowing third party, red light, traffic ticket processors to charge credit card convenience fees.  See Pincus v. American Traffic Solutions, Inc. (2022).

Incredulously, the Supreme Court found that a 5% credit card fee was not a commission (which would be prohibited by Florida Statutes), but rather, according to the Court, the ticket processor was providing a service.  

Please understand that the fee percentage at issue is not what the card card companies are charging the ticket processors to accept credit card payments (which may be passed along to the citizen), but rather, the actual profit the ticket processor itself is making on top of what the government pays the processor to preform its services on behalf of the tax payer when accepting credit card payments.

The Supreme Court is provided great respect, but the reasoning used to justify its opinion seems to lack an understanding of basic ecommerce and online payment systems.  “Commission” is defined by webster as follows: an amount of money paid to an employee for selling something.

F.S. 316.(1)(b)(4) prohibits a “commission from any revenue collected from violations detected through the use of a traffic infraction detector”.

The Court subjectively reasons that because one receives value by using a credit card instead of check or money order, that the fee is not a commission but rather one is paying for a service.  Seriously?

The Court lists the services provided to justify the the 5% fee.

  1. One doesn’t have to pay postage.
  2. One could pay the balance over time (even though this scenario does align with the facts of the case).
  3. Avoids the risk of the payment being delayed, lost or stolen.
  4.  Instantaneous payment (redundant?).
  5. Confirmation number after payment is received.

The above stated “services” are not services but standard when it comes to paying for anything, especially in todays digital world.

Working backwards. 1.  A confirmation of receipt of payment is literally just a receipt.  You go to any store and they provide a receipt.  You buy anything online and you get an email confirming the purchase.  This is not a service, but what is standard and necessary for every payment.

2. Instantaneous payments help the processor more than the person making the payment.  When a payment is made digitally, the ticket processor does not have to spend time, looking up an account, linking payment to the account, cashing a check or money order, but rather the money is transfer immediately and directly to the processor’s bank account and likely to the accounting system automatically requiring little to no employee resources.

Delayed, stolen or lost mail:  Pursuant to Florida Statute, mail by USPS is presumed delivered, not the other way around. 

Balance over time: this is not even applicable to the present case.

Postage: relating a .53 cent savings to a $7.90 fee just to pay your ticket is not a fair comparison.  Moreover, as stated above, the ticket processor saves time and money when receiving credit card payments because it does not have to use personnel to open, review, associate the payment with an account number and deposit the funds as would be required with a check or money order.

This opinion by the Supreme Court opens the doorway to more and more nonsensical fees.  How much is now too much?  Is a 10% fee ok.  Sure, because you don’t have to pay postage right?  

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