Using the corporate fine print of debit card contracts to zing public-transit riders (and, in turn, to generate non-fare revenue fees for cash-strapped government agencies)

by Theresa Amato (guest post)

Reporter Jon Hilkevitch’s March 20 front-page
Chicago Tribune story
(“CTA’s Ventra debit option rife with fees,
Contract’s fine print shows good deal for agency, not users”) describes the
multiple unexpected charges awaiting customers in the fine print should they
sign up for a prepaid debit card account along with their new “Ventra” fare
card that the Chicago Transit Authority (CTA) and Pace bus system plan to roll
out this summer. 

The terms of this first-in-the-nation transit-plus-optional-debit-card payment system are detailed in a 1000-page plus contract. The contract allows the CTA to get from participating corporate vendors “nonfare
revenue generated by the debit card fees” extracted from CTA's consumers who opt for the debit card. Undoubtedly, many of the consumers will be unaware of the fees. These debit card fees potentially include, in
addition to an ATM fee, a $2 paper statement, if requested, a $2 fee for a call
to an “operator-assisted” customer service center, and then $10 per hour for an
“Account Research Fee,” a $5-a-month “dormancy fee” after 18 months of no
purchases or transfers, a $2.95 Internet “reload fee,” a $6 “balance refund
fee,” and much more.   

The CTA defends the card as “voluntary” and competitive (go here),
claiming both that the fees are lower than some other similar debit card fees
and that the new CTA card is a benefit to low-income riders who do not have a bank
and “don’t own a credit or debit card.” 

Anyone else find disturbing this use of a government agency
and public transportation system to issue fare cards marketed in conjunction
with debit cards that have the potential to gouge consumers through corporate
fine-print practices? 

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