In another case of banks and financial institutions getting tied up in knots due to the ambiguity of the Unlawful Internet Gambling Enforcement Act (UIGEA), MasterCard has been accused of illegally charging fees to consumers who use their cards to buy New York Lottery tickets.
A spokesperson for the New York Lottery, Jennifer Givner said that since the official implementation of the UIGEA on June 1st, MasterCard has been billing their customers as if they were taking cash advances and that these extra fees and higher interests typically meant that they were paying $10 per transaction and up to 25% interest rates.
In response, Mastercard spokesperson, Chris Monteiro said that it was banks that issue the credit card that set the fees and rates, and the credit card company only received a fee for processing.
However, Jennifer Givner responded that MasterCard had moved lottery transactions into a different category so that it they automatically called for higher bank rates. This category also incorporates gambling services such as horse racing and dog racing – both of which are legal in the United States.
“They’re breaking state law,” said the New York State Lottery. “It is illegal to charge additional fees beyond the price of a lottery ticket.”
The problem was brought to light after people who used their Chase MasterCard’s to buy Mega Millions subscriptions discovered that the transaction, which had previously been treated as a straight bank charge, was actually now considered a cash advance.
While many believe that the bank was taking advantage of the newly implemented UIGEA, State Senator Addabbo said that the problem seemed to be “a misinterpretation of federal law” and called for an investigation.
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