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Table of Contents

Lead Story

2008: Keeping it sticky

News

Industry Update

Mega-mergers' impact on payments

Mega-mergers' impact on payments

E-commerce fraud hits $4 billion

Outsmarting data thieves

ACH evolving and prospering

W.net DIVAs honored

2009 Calendar of events

Features

AgenTalkSM:

AgenTalkSM:
Casey Leloux

The prepaid, m-payments intersection

The archetype in the mirror

Views

What history teaches about change

Patti Murphy
The Takoma Group

The case for collecting fees

Ken Musante
Humboldt Merchant Services

Education

Street SmartsSM:
Dreams fulfilled: Six easy steps

Jason Felts
Advanced Merchant Services

The promise of September 2009

Lane Gordon
MerchantPortfolios.com

Capturing verticals

Nancy Drexler
SignaPay Ltd.

The skinny on thin client

Dale S. Laszig
DSL Direct LLC

The law of fine print

Adam Atlas
Attorney at Law

Ease the pain

Daniel Wadleigh
Marketing Consultant

Company Profile

Affirmative Technologies Inc.

New Products

Payments in your pocket

MicroSecure Card Reader
ProPay Inc.

Multifactor ID for RDC

Excella MDX
MagTek Inc.

Inspiration

Take action, banish fear

Miscellaneous

POScprit

Departments

Forum

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

December 22, 2008  •  Issue 08:12:02

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Legal ease
The law of fine print

By Adam Atlas

Like many businesses, credit card acquiring and issuing depend on fine print. And once in a while those finely printed terms and conditions are scrutinized by the courts. Such was the case in Lonner v. Simon Prop. Group Inc. (2008 NY Slip OP 07877), which was decided by the Appellate Division of the New York Supreme Court on Oct. 14, 2008.

In this case, the court was asked to decide whether a $2.50 monthly inactivity fee on a gift card was permissible since it was disclosed only in fine print at the time of the card's issuance. The court held that the fee was not permissible due to failure by the issuer to adequately disclose the fee in the terms and conditions distributed to cardholders.

The purpose of this article is to draw some important lessons from the ruling that could help you, as ISOs and merchant level salespeople (MLSs), stay on the right side of the law. Please note that this was a New York State case; the findings may not apply in your state or to your particular situation.

The facts

First I will quote from the judgment:

The law

The New York statute governing fine print (CPLR 4544) reads as follows:

The court went beyond the letter of the law and provided an educational summary of consumer protection laws and the way in which they should be interpreted. The court quoted an earlier judgment on fine print; following are some excerpts:

Spotlight Innovators:

North American Bancard | Harbortouch | USAePay | IRISCRM.COM | Humboldt Merchant Services