RPC 1.5(a), 1.5(b)
Credit Card Transaction Fees Charged to Client
This opinion addresses whether credit card transaction fees may be charged to the client.
Question: A lawyer accepts payments from a client by credit card. The client pays the lawyer with a credit card and the credit card company then charges the lawyer a fee for the transaction. May the lawyer charge the client an additional amount to cover the fee charged the lawyer for the credit card transaction?
Answer: It is not prohibited under the Rules of Professional Conduct, PROVIDED that the lawyer notifies the client in advance of such charges and does not charge the client any more than a fee that reasonably reflects the actual cost incurred by the lawyer for the credit card transaction. HOWEVER, the attorney should consult the merchant services agreement from their credit card processor, as it is typically prohibited to charge these fees back to the customer.
Analysis: Lawyers may charge clients reasonable amounts for expenses. RPC 1.5(a). The lawyer should communicate with the client in writing the basis for expenses for which the client will be responsible. RPC 1.5(b). Comment 1 to RPC 1.5 further explains that a lawyer may charge a client “for the cost of services performed in-house, such as copying, or for other expenses incurred in-house, such as telephone charges, either by charging a reasonable amount to which the client has agreed in advance or by charging an amount that reasonably reflects the cost incurred by the lawyer.”
At the time of issuance, of this opinion, the operating agreements used by most of the major credit card companies prohibit charging customers extra fees to cover the cost of such credit card transaction fees and attempting to do so may place a lawyer in violation of obligations imposed by the credit card provider agreements. [note 1]. Before attempting to charge a client any fee to recover the costs imposed by credit card providers, the lawyer should carefully consult all applicable agreements and the contracting bank.
[n.1] Despite prohibiting transaction fees to the consumer, many credit card agreements permit the use of discounts for cash payments. A lawyer should carefully review the applicable credit card agreements and contact the contracting bank to assess what is permitted under the specific agreement at issue.