Not everyone is fond of state lotteries, but you know what they’re not? Illegal. Still, Tim shared his experience with the New York State Lottery and his credit card company, Chase, where the bank chose to treat his lottery subscription payment as a cash advance, with the $10 fee and astronomical interest rate that goes along with it.
On 7/15/10 I charged a annual subscription to the New York State Lottery Mega Millions game on my Chase MasterCard in the amount of $98. On 8/9/10 I received my monthly statement and was surprised to see a $10 cash advance fee and a $1.24 interest charge for that cash advance fee along with the $98 charge to the New York State Lottery.
When I called Chase, I was misled into believing that the New York State Lottery had incorrectly processed the charge as a cash advance instead of a regular charge. I called the Lottery and spoke to [redacted]. He told me that they had not processed the charge incorrectly. He said that what was happening was that Chase was taking advantage of a new law that was passed on June 1, 2010 that allowed credit card companies to handle charges for illegal Internet gambling in this fashion. The idea behind the bill was to stem the tide of illegal Internet gambling.
He said that it seems that Chase, which was the only bank that had interpreted the law in this fashion, saw fit to include the New York State Lottery and legal horse betting in the State in this category. He said that they have attorneys looking into this matter.
I called Chase back and told them that they had not represented the incident in a honest fashion and that I wanted the charge for the cash advance as well as the interest charge on that cash advance removed from my bill. I told them that I have been a Chase customer for 30 years and have all my personal accounts as well as many commercial accounts with the bank and that I would close the account if they did not remove these charges. They refused. I closed the account.
I’m sure that they took this action (mistreating a 30 year customer) on the premise that by the time anyone stops them in this unethical practice that they will have made millions in these fees.
Sure enough, Tim’s statement shows a $98 charge from the state lottery in Schenectady, NY, a $10 fee, and a high interest charge. Hope the fee income is worth it, Chase!