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Appeals court limits California credit card surcharge law

SAN FRANCISCO (AP) - A federal appeals court says California can't prevent five businesses from charging additional fees to customers who use credit cards.

Posted: Jan. 3, 2018 2:57 PM
Updated: Jan. 3, 2018 2:57 PM

SAN FRANCISCO (AP) - A federal appeals court says California can't prevent five businesses from charging additional fees to customers who use credit cards.

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The 9th U.S. Circuit Court of Appeals said Wednesday a 1985 state law that banned credit card surcharges violated the businesses' free speech rights.

The case dealt with swipe fees that merchants must pay credit-card issuers each time a customer charges a purchase. The state attorney general's office says surcharges at the cash register mislead customers about a product's true cost.

The 9th Circuit disagreed, noting that the law allowed the businesses to charge cash customers less. The court said the businesses only wanted to communicate the difference as a surcharge for credit card users rather than a discount for cash users.

The California attorney general's office said it was evaluating its options.

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