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?