Q: Autopay (water bill) with a credit card & paperless billing since 2008: Can city now charge fee for credit card use?

A: In California, businesses, including cities providing utilities, have the discretion to charge fees for credit card transactions, subject to state regulations and any agreements they may have with customers. The legality of introducing a new fee after a service has been provided under certain terms for an extended period hinges on the terms of the original agreement and applicable laws. California Civil Code Section 1748.1 allows merchants to charge a fee for the convenience of using a credit card in certain circumstances, but this must be clearly disclosed and cannot exceed the cost of processing the credit card transaction.

If your city decides to implement a new fee for credit card use, it must ensure that this change is communicated effectively and in accordance with any existing agreements or policies that govern your utility services. This includes providing adequate notice to customers before any changes take effect, allowing customers the opportunity to make informed decisions about their payment methods. Additionally, the city should ensure that the fee does not exceed the actual cost of processing the credit card transactions, to comply with regulations that protect consumers from excessive charges.

It's also important to consider whether the original terms of service or any subsequent agreements explicitly forbid the introduction of new fees or changes to the billing process. If there is a clause that limits the ability to modify terms or introduce new fees, the city may be restricted in its ability to impose such charges. In any case, if there are concerns or disputes regarding the legality or fairness of the new fees, it may be beneficial to seek legal guidance or contact consumer protection agencies for assistance in resolving the issue.