Reader Gary used his Bank of America credit card to pay $2 on a parking meter in Washington, DC. Bank of America treated it as a cash advance and slapped him with a $10 fee, as well as a higher APR. When Gary called to complain, he learned that it wasn’t an error: Bank of America has started treating payments to parking meters as cash advances and may even treat all payments to government entities as cash advances.
For the unfamiliar, multispace meters, also called “Pay and Display” machines, are a central machine where drivers can purchase time on a particular space or print out a ticket to display on their dashboards; most machines accept bills and credit/debit cards, allowing drivers without quarters to purchase parking. Obviously, a $10 service charge negates this convenience.
Gary writes:
I recently used my bank of America credit card to pay for a multi-space parking meter in Washington DC. The type electronic meter common in urban areas for parking on the street and which accepts credit card payments. The charge for parking was $2. Bank of America treats this charge as a cash advance. They charged me a $10 cash advance fee on top. So now I will be thinking twice before using any bank of America cards. A transaction that should cost $2 can come out costing $12. Also, my card currently has a 0% promotional APR on purchases, but they put the $2 parking purchase in a separate category subject to a much higher interest rate.
Gary sent us a follow-up the next day:
I spoke to their CSR twice and I never really got an adequate explanation. I am attaching a copy of the email explanation they sent me. From what I understood, they now treat payments to government entities as quasi-cash transactions. During my last conversation the CSR explained that parking meters and payments of fines would now be treated as quasi-cash transactions subject to a minimum fee of $10. I think this is something new that they recently introduced and I have requested an updated version of my terms of service to get a better understanding of these fees.
(Photo: dM.nyc™)
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I would like to hear exactly what the CSR said and what Gary asked her instead of Gary’s second-hand, anger-filtered paraphrasing.
Didn’t Cist cover an extremely similar story before about parking tickets in a city, and the fault was actually with the city for the method they used to handle the transaction?
Good journalists check the morgue first.
Not that today’s successful bloggers feel the need to be good journalists any more than today’s successful journalists do…
Oh, look, thanks to MovableType, I can do the onerous legwork myself:
[consumerist.com]
Sounds REALLY familiar!
I suppose a good journalist would also do follow-up and further research, but that’s sooo Old Media!
PS Where’s the email Gary said he attached? Hm?
@krom: Thanks for the incredibly snide comment. To answer your question: no, the fault was not with the city for the method they used to handle the transaction. Apparently Bank of America’s terms of service do say they treat fines as a cash advance but parking meters≠parking tickets or fines, so no, these are not the same.
@Alex Chasick: I’m wondering if the city is processing the parking meter transactions through the same merchant account used for accepting payment of fines or something. Seems quite possible, given that it’s probably the same department at the city government. If they’re doing that, how would BoA be able to tell fines apart from the meter fees?
@johnva: I could see that being the case, although it makes me wonder what else gets charged on that account (like zoned parking permits, for example). If that is the case, cities need a better fix than a warning on their website; they need to stop using the same account (or Bank of America can stop treating fines as cash advances).
@EBone:
@straight_up:
If you’re going to go with a major bank, Wells Fargo is the one to go with. They aren’t completely free of questionable big-bank practices (keeping closed accounts open to new charges then charging overdraft fees) but they’re better than the other major banks.
A better option if you intend to stay in AZ is a credit union. Not sure what ones are the most widespread. Actually, I’m in AZ, and the only bank account I’ve got is a credit union in AK. It could work wherever you are. But if they’ve got ATM refunds (mine doesn’t…I just don’t use them) it would make a credit union about as good an option as an online bank wherever you go.
And many online banks have partner banks whose ATMs you can use fee-free. They offer better interest rates than even credit unions do.
@EBone:
I’m pretty sure BofA is a major shareholder in both Visa and Mastercard. So if you’re using either one, they’re probably getting a piece of it.
Ha ha! No BoA for me!
Besides, they’ll blame the Government for their $10 fee, giving some insipid reason.
Someone may have pointed this out already, but…using BofA’s interpretation of this parking meter transaction as a cash advance, wouldn’t every credit purchase ever made be a “cash advance”?
Just curious, but did the OP use his PIN? If you ever use your pin when using a credit card, you’re using the cash advance feature. But there are some cards that make cash advances extra ‘convenient’ for you, and maybe BofA CCs are some of them.
@Jesse: And you might want to check who does issue your credit union’s credit card: A lot of credit unions here outsource their Visa/MC/AmEx credit card products to FIA Card Services, a division of (surprise!) Bank of America. I kid you not… I’ve checked.
If FIA issues your credit union’s cards, I couldn’t imagine that their fees would be any different than the average BofA card.
@kepler11: I use a credit card to pay for shipping on eBay transactions all the time (it helps me keep track of things). Never been socked with a cash advance fee, but under this logic I should be. BofA is really grasping at straws trying to define that as a quasi-cash transaction. “Quasi-cash” is for things like wire transfers and gaming chips/gambling. Under that definition pretty much transaction could be “quasi-cash”.
Well they got rid of soap and coffee for their employees, they’ve got to make up that subprime shit somehow.
So take the normal merchant 25 cent plus 3 percent processing charge and you get a 31 cent fee. That’s kind of different from 10 dollars.
Something similar happened to me. I made a purchase through PayPal with my BoA Visa as my funding source, something I have done many times before with no problem. This time when I got the bill there was a $10 same as cash fee. These fees must be new because the CSR I spoke with kept insisting that the fee must have come from PayPal, not them. Eventually, he put me on hold while he spoke to someone, and when he came back he admitted the fee was from BoA. He did waive the fee, but said that they would not waive the fee again since I now knew about it.
@johnva: John, how can you see both sides of it? What is the other side exactly? The transaction cost of $10,000 is the same as transaction cost for $1, so what? What difference does it make when that transaction cost is close to zero? There is no other side to consumer fraud. Go write yout ‘balanced crap’ somewhere else, be a man, and take a stand one way or the other.
@vancedecker: What I’m arguing is that while the cost of individual transactions is essentially equal, there may be more loss to fraud associated with large transactions because the potential loss from that single transaction is much higher. So the average cost of larger transactions may be higher, even if the individual cost isn’t.
Alex: You still haven’t posted the email that the OP says he attached.
@MFfan310:
Thanks for the tip!
I go through US Bank right now, but am considering a local credit union which supposedly has a e-checking account that yields 2.5% APY (I think the pulled an Office Space and misplaced a decimal though). If true, that combined with my high yield online savings account will be a decent utilization of my cash vs. what it’s doing now at US Bank (0% and .10%.
why would you use your Credit Card at a parking lot. Maybe if you have award program. yeah that’s just dumb
BoA is THE WORST! Have been for years. Wells Fargo seems to be trying to hard follow in the footsteps of their business model also. I dropped BoA over 12 years ago here in Los Angeles for the credit union and never looked back. Years later, when BoA started charging you $5 to cash a check written from one of their customers checking accounts if you didn’t have an account with them I knew I had made the right decision. Let’s face it, we all have people who’s checks we cash at their bank to save fees at ours if their check bounces! Preceeding that, they had it where you could only cash the check at that person’s branch. I’m not even religious and I see that the temple of America is full o’ money changers. One word – DEREGULATION of the banking industry. Thanks Reagan/republicans. Same with the Airlines. Let me define DEREGULATION – “companies are free to screw people over with any idiotic idea that comes to mind.” I’m all about a free market place, but there has to be a line drawn somewhere when corporations get mercinary and take advantage. Yep’… another LONG LOST BoA customer here to. Companies know one true thing – people are sheep who don’t like change!
He should put up the “I hate Bank of America” banner on his wall.
My fiancee and I will be leaving BOA for a local credit union. Until federal governing bodies stand up for consumers we need to walk!
As the economy tightens look for all companies to screw their customers over to help themselves out.
I can’t believe people think a ‘free market’ in today’s world is good for consumers.
Two different comments from B of A people on this one…and there’s a big difference between what the CS Rep says to a normal person and what the Government Relations person says to a city employee….
Much thanks to Amy J. Ruiz of the Portland Mercury for the legwork here…
A response to my e-mail to B of A:
Thank you for your inquiry dated 6/29/08 regarding (your card). We are happy to
assist you.
You may access cash with your credit card up to the credit line; however
please keep in mind of your transaction fee associated along with each
cash transaction.
Bank of America will now convert charges from parking meters, court
fines, and parking tickets into a cash charge.
The transaction fee for each cash transaction is three percent with a
minimum of $10.00 and no maximum cap.
We appreciate the opportunity to assist you online. Should you have any
further inquiries, please e-mail us again. Thank you for choosing Bank
of America. We value your business and look forward to serving your
banking needs.
(shill), Bank of America
But here’s what happened when Ms. Ruiz talked to a City of Portland employee who then contacted B of A…:
(B of A Rep) said that there was an issue early this year whereby some municipalities were encoding parking meter transactions incorrectly. The issue was identified and corrected by May 5.
Bank of America does not charge a cash advance transaction fee to use parking meters. Parking meter payments are treated as purchases. There is no associated fee for this transaction.
Below is the actual statement she said that their Government Banking Merchant Group sent her regarding the payment of parking tickets:
“Bank of America does not consider payments of parking tickets as cash advance fees. There was a coding error for a brief period in April and we worked with the District of Columbia to correct it and credited any fees back to our customers.”
As far as we know, there was no such problem in Portland.