On Friday, the National Retail Federation (NRF) asked the Federal Reserve Board (the Fed) to prevent banks from misleading customers into believing that fees charged for using a PIN number when making a debit-card purchase in a retail store are imposed by the store rather than the bank.

The NRF argues that many banks do an inadequate job of disclosing to customers that they might be charged a fee if they enter a PIN number when using a debit card in a retail store. The Fed is conducting a study of debit-card fees at the request of the Senate Banking Committee, asking among other questions whether existing disclosures required under the federal Electronic Funds Transfer Act adequately inform consumers of fees imposed by financial institutions when a debit card is used to make a purchase from a merchant.

"Annual statement disclosures are insufficient-they get buried among a host of other disclosures, and they are rarely clear," NRF Senior Vice President and General Counsel Mallory Duncan said. "Only a concrete disclosure at the point of sale will make it clear and allow consumers to effectively comparison shop among banks and encourage efficiency in the marketplace."

NRF noted in its comments that rules and conditions for PIN fees are often included in the fine print of annual statements, written in legal jargon along with a myriad of other disclosures.

"Customers come to us with their bank statements and express their surprise-to put it mildly-that they have been charged for entering their PIN," Duncan said. "Once we overcome their disbelief and explain the true source of the charge, the customers' anger is immediately directed at their banks. But this job should not be the retailer's responsibility."

Look for a full story in the Sept. 6 edition of Christian Retailing.

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