Resident angry over municipal credit card fee

Derek Montague
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Town of Happy Valley-Goose Bay used surcharge on credit card payments

A resident of Happy Valley-Goose Bay claims that he was charged an illegal fee when he paid his municipal property tax with his credit card.

For more than a month, the Town of Happy Valley-Goose Bay charged residents a two per cent fee when paying property tax with a credit card. After receiving a notification from their service provider, the town stopped charging the fee.

Malcolm Wells went into the town office on April 15 and paid with his Visa card. He was surprised to find out that there would be a two per cent surcharge for paying with a credit card, which amounted to $75.40.

“I explained that I was aware the extra charge was illegal and did not wish to pay it,” wrote Wells to The Labradorian. “The answer was to use alternative means to pay, something I was not prepared to do. I complained to Visa and they have now confirmed the extra charging was against their ‘terms for Visa use’ and I have also been informed the extra charge will be credited to my Visa account.”

“I encourage all town residents who have paid the extra service charge to complain to their Visa credit card company …  and by doing so also, hopefully, receive a credit for this totally illegal abuse of your credit card.”

According to Happy Valley-Goose Bay’s town clerk, Hayward Broomfield, the town stopped charging the fee in May, after the town council implemented it at its March 25 meeting.

According to Broomfield, the credit card/debit card service provider informed the town that charging a usage fee was not allowed.

“We had it for roughly a month or a month-and-a-half,” said Broomfield.

“Our provider said we had to get rid of it, we’re not allowed to do that. The only way we’re allowed to do that, they told us, is we couldn’t distinguish between credit card, debit card, or someone who came in paying by cash.”

The town council was hoping to help recover the user fees incurred by the municipality when someone pays through credit card. According to Broomfield, the town is charged a three per cent fee for every transaction. Taking away the option of paying with credit card was considered a possibility as well.

“Council felt that … we’re paying way too much for people using credit cards,” said Broomfield.

“But the reality is we have … people from outside of town, who would like to pay … by credit card when they call in. So that’s why we really had to keep it for convenience for those people.”

The Labradorian got in contact with Mayor Jamie Snook, to ask if there would be refunds given to those who were charged a fee. Snook said council is currently gathering information on the subject and referred the newspaper to town manager Wyman Jacque.

Jacque said the issue of having a surcharge is not clear at the moment. The notification the town received from their service provider, said the town manager, was very vague.

“What the town is doing, is currently reviewing those options, because what we have is a communiqué from (the company) who provides our debit and Visa machines,” said Jacque.

“According the them, they have received some notice from Visa/MasterCard. And it’s not to say that we couldn’t do it, what they were saying is there was a concern of us being non-compliant and that there would be a penalty charged.

“So what we’re currently doing is reviewing what that actually means.”

Right now, the town is considering all options, pending their research into the issue. It’s even possible that the surcharge may come back, if it turns out to be a legal fee.

“We’ve not received any official correspondence from either Visa or MasterCard,” said Jacque.

“We need to have a communiqué with the company or companies who may have concerns.”

Jacque said he currently doesn’t know how much money the town pays in surcharges for allowing credit card transactions, but it’s easily in the thousands.

“That’s a fee as a cost of service, but it’s borne by all the taxpayers in town.”

derek.montague@thelabradorian.ca

Organizations: Visa, MasterCard

Geographic location: Happy Valley, Goose Bay

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