Timeshare charging fee for using debit card - I thought this was illegal

[Barblich]

I recently received an owners newsletter from Falcon Point in Avon, Colorado informing owners that they are now going to be charging a 3% fee for credit cards. This is nothing new and now legal in Colorado however the newsletter also said the following:

One-Time eCheck – One-Time ACH direct debit. No fee.
• Recurring eCheck /ACH – Recurring direct debit withdrawal-allowing owners to determine the date of the debit; AAB will send a reminder email prior to the debit. No fee.
• Credit Card – All credit cards are accepted. 3% Service fee applies and is charged at the time of payment / Flat $5 Debit Card fee.

Its the $5.00 flat fee for the debit card that I believe is illegal. Not only does it go against federal law but both Mastercard and Visa also do not allow it in their contracts. Banks and third party processors can charge a fee for debit card use, its just that end users who accept debit cards can not pass the cost on to consumers.

My letters to the HOA basically said that they can do it. Does anyone know any different?

 

[davidvel]

I recently received an owners newsletter from Falcon Point in Avon, Colorado informing owners that they are now going to be charging a 3% fee for credit cards. This is nothing new and now legal in Colorado however the newsletter also said the following:

One-Time eCheck – One-Time ACH direct debit. No fee.
• Recurring eCheck /ACH – Recurring direct debit withdrawal-allowing owners to determine the date of the debit; AAB will send a reminder email prior to the debit. No fee.
• Credit Card – All credit cards are accepted. 3% Service fee applies and is charged at the time of payment / Flat $5 Debit Card fee.

Its the $5.00 flat fee for the debit card that I believe is illegal. Not only does it go against federal law but both Mastercard and Visa also do not allow it in their contracts. Banks and third party processors can charge a fee for debit card use, its just that end users who accept debit cards can not pass the cost on to consumers.

My letters to the HOA basically said that they can do it. Does anyone know any different?

Sounds very complicated, but you should cite to your claims that this is illegal under federal law.

I have dealt with lots of charges, many with the government that charge for any card transaction, but free for e-check.

 

[davidvel]

I recently received an owners newsletter from Falcon Point in Avon, Colorado informing owners that they are now going to be charging a 3% fee for credit cards. This is nothing new and now legal in Colorado however the newsletter also said the following:

One-Time eCheck – One-Time ACH direct debit. No fee.
• Recurring eCheck /ACH – Recurring direct debit withdrawal-allowing owners to determine the date of the debit; AAB will send a reminder email prior to the debit. No fee.
• Credit Card – All credit cards are accepted. 3% Service fee applies and is charged at the time of payment / Flat $5 Debit Card fee.

Its the $5.00 flat fee for the debit card that I believe is illegal. Not only does it go against federal law but both Mastercard and Visa also do not allow it in their contracts. Banks and third party processors can charge a fee for debit card use, its just that end users who accept debit cards can not pass the cost on to consumers.

My letters to the HOA basically said that they can do it. Does anyone know any different?

Sounds very complicated, but you should cite to your claims that this is illegal under federal law.

I have dealt with lots of charges, many with the government that charge for any card transaction, but free for e-check.

 

[RX8]

This government website on surcharges clearly states that surcharges cannot be added to debit and prepaid card transactions.

Surcharges | Smartpay

smartpay.gsa.gov

If you haven’t already, you could report this to Visa and/or Mastercard.

 

[tschwa2]

I have one that charges. They send out the MF's with the CC built into the MF and then state that if you pay by check or ACH you get a discount.
The HOA is a non profit so either they have to build the fees into what everyone pays or they have to charge more to the people who use cards.

 

[dioxide45]

I have one that charges. They send out the MF's with the CC built into the MF and then state that if you pay by check or ACH you get a discount.
The HOA is a non profit so either they have to build the fees into what everyone pays or they have to charge more to the people who use cards.

The issue in question is regarding debit card processing fees which are much lower than credit card merchant fees. I beleive the right way to charge any of these fees is either a fee to use the credit card or a line item in the budget for merchant processing fees. Thus making the MF a little higher overall. Someone has to pay the fees but it seems they can't tack an individual service fee for debit card transactions like they could for a credit card transaction.

 

[moonstone]

Our original timeshare (The Beach Club at St Augustine Beach) began charging an extra $25.00 for paying maintenance fees with a credit card quite a few years ago. There is no charge to pay with a cheque. Since we are Canadian owners it is difficult to pay by a cheque drawn on our Canadian bank but in US funds. Last fall when we were in town we asked if we could pay this years fees early (due by Aug.1st) and with cash but the office manager said no, it was much too early. It is a smallish resort so I guess they need to pay higher rates to the credit card companies due to the lower volume of folks using credit cards, but we feel $25. is a bit excessive for a $700. charge. The same extra fee applies if we want to book a bonus night(s) to attach to our stay.

They have also stopped mailing any notices to Canadian or other international owners due to the higher US Postal rates. We get everything via email now which we don't mind.



~Diane

 

[dioxide45]

They have also stopped mailing any notices to Canadian or other international owners due to the higher US Postal rates. We get everything via email now which we don't mind.

That almost seems like a violation of Florida law? I know we have to physically opt in for electronic delivery for our Florida timeshares. How many mailings do they make a year? Perhaps two? One for the Annual Meeting notice and proxy and another for the BOD meeting. Postage for a single first class letter to Canada is only $1.30 right now. So less than $3 in additinoal postage. I understand that can add up to a lot when you have a few thousand owners, but what percentage live in Canada?

 

[montygz]

I recently received an owners newsletter from Falcon Point in Avon, Colorado informing owners that they are now going to be charging a 3% fee for credit cards. This is nothing new and now legal in Colorado however the newsletter also said the following:

One-Time eCheck – One-Time ACH direct debit. No fee.
• Recurring eCheck /ACH – Recurring direct debit withdrawal-allowing owners to determine the date of the debit; AAB will send a reminder email prior to the debit. No fee.
• Credit Card – All credit cards are accepted. 3% Service fee applies and is charged at the time of payment / Flat $5 Debit Card fee.

Its the $5.00 flat fee for the debit card that I believe is illegal. Not only does it go against federal law but both Mastercard and Visa also do not allow it in their contracts. Banks and third party processors can charge a fee for debit card use, its just that end users who accept debit cards can not pass the cost on to consumers.

My letters to the HOA basically said that they can do it. Does anyone know any different?

Many businesses in Florida charge extra fees for using debit cards or credit cards.
In fact, if you want to renew your car tag in Florida using a credit or debit card, they charge a fee. No fee for using an echeck.
There is a cost to accepting debit and credit cards and the HOA doesn't want to bear that cost.
If the total of fees and other junk charges an HOA has to pay to accept credit card payment adds up to 3.5%, that would be about $25 on a $700 maintenance fee.

 

[dioxide45]

In fact, if you want to renew your car tag in Florida using a credit or debit card, they charge a fee. No fee for using an echeck.

I recall a similar fee when renewing vehicle registration in Ohio. I think this type of thing is typical of many government organizations, they charge a convenience fee to use a card vs cash or check.

 

[Ken555]

FWIW, some merchant processors don’t distinguish between debit and credit. I believe both stripe and square (both are huge players in the small business merchant account business) charge the same rate for credit card or debit, to the best of my knowledge.


Sent from my iPad using Tapatalk

 

[tschwa2]

The IRS charges a fee to pay by credit card OR debit card. If they can legally do it I think your HOA probably can too.
https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card

 

[dioxide45]

The IRS charges a fee to pay by credit card OR debit card. If they can legally do it I think your HOA probably can too.
https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card

Not sure a government entity can be used as a comparison. Congress can write laws in a favorable way to themselves. Those same rules don't always apply to the rest of us.