Explainer: New N.J. credit card surcharge law: What it means for agencies 

August 29, 2023

Gov. Phil Murphy signed legislation into law that prohibits businesses, including insurance agencies, from imposing certain surcharges on credit card transactions.  

What does the new law do? 

The new law prohibits a business (referred to as “sellers” in the law) from charging customers a surcharge for credit card transactions that exceed the actual cost to the business to process the credit card payment.  

For example, an agency that is charged 1.5% surcharge by a credit card company, can only charge 1.5% to its clients.  

What else are businesses required to do? 

Businesses that impose a credit card surcharge of any kind also will be required to post notice of that fact, prior to the customer incurring any charge. The notice must be clear and conspicuous and posted at the point of entry and at the point of sale.  

For agencies, that means placing a notice in the front of the agency, as well as a second written notice provided prior to the purchase of an insurance policy. For transactions that take place online or via an application, notice must be posted on at the checkout page. Verbal notice is required for any transactions that take place over the phone. If you need help with your messaging, you can contact PIA Design and Print at (800) 424-4244 or design.print@pia.org

To whom does it apply? 

The law applies to all “sellers” in New Jersey. That term is broadly defined to mean a person who sells, leases or rents goods or services to a customer. In essence, any business that offers a good or service in the state is subject to the law. One caveat is that the law only applies to transactions occurring in New Jersey. 

Do I really have to do this? 

Yes. A violation of the new law is considered a violation of consumer fraud laws. To demonstrate compliance, sellers are required to make available all relevant documents for the Director of the Division of Consumer Affairs. 

When will the law go into effect? 

The law goes into effect immediately. 

How does this law impact fees charged for insurance services? 

This law only applies to fees related to credit card transitions.  It has no impact on the fee an agency may charge clients for insurance services. “Insurance services fees” are regulated separately. PIA members can access more information on charging fees in New Jersey and in the Ask PIA database.

Bradford J. Lachut, Esq.
PIA Northeast

Bradford J. Lachut, Esq., joined PIA as government affairs counsel for the Government & Industry Affairs Department in 2012 and then, after a four-month leave, he returned to the association in 2018 as director of government & industry affairs responsible for all legal, government relations and insurance industry liaison programs for the five state associations. Prior to PIA, Brad worked as an attorney for Steven J. Baum PC, in Amherst, and as an associate attorney for the law office of James Morris in Buffalo. He also spent time serving as senior manager of government affairs as the Buffalo Niagara Partnership, a chamber of commerce serving the Buffalo, N.Y., region, his hometown. He received his juris doctorate from Buffalo Law School and his Bachelor of Science degree in Government and Politics from Utica College, Utica, N.Y. Brad is an active Mason and Shriner.

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