Magazine article American Banker

Group Says Banks Pretend Retailers Assess PIN Fees

Magazine article American Banker

Group Says Banks Pretend Retailers Assess PIN Fees

Article excerpt

In a last-minute protest against PIN debit fees, the National Retail Federation accuses banks of misrepresenting them as merchant charges.

The country's largest retailer trade group wrote in a letter to the Federal Reserve Board that cardholders blame merchants for banks' unfair surcharges. The Fed's comment period on the issue closed Friday, the day the letter was sent.

The NRF, which was a plaintiff in the Wal-Mart class action against Visa U.S.A. and MasterCard International over debit fees and policies, said banks' PIN fee disclosures "make it appear that the bank did not impose the charge."

Surcharged customers often return to stores to complain after learning about PIN penalties on their monthly bank statements, according to the group, whose members generate $3.8 trillion of annual U.S. sales.

"Retailers often see firsthand the calculated inadequacy with which these fees are disclosed," Mallory Duncan, a senior vice president and the general counsel of the group, wrote in the letter. "We see it because many customers come to us with their bank statements and express their surprise (to put it mildly) that they have been charged for entering their PIN, oftentimes at the retailer's urging."

Merchants are then called upon to convince irate customers that the fees came from their bank, he wrote. "But this job should not be retailers' responsibility."

Many if not most U.S. banks apply a fee to PIN debit transactions, which are less lucrative than signature ones. …

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