Senator Durbin defends his amendment against Parkmobile's claims

Oct. 30, 2012

Senator Dick Durbin, D-Ill., is taking issue with mobile payment provider Parkmobile.

A week after Parkmobile announced higher fees for some of its customers, Durbin fired back that Parkmobile misrepresented the amendment to the Dodd-Frank Wall Street Reform Act that bears his name.  

The problem started when Parkmobile introduced a mobile wallet product for consumers in the District of Columbia. Customers who did not wish to use the new mobile wallet would see the cost of their transactions increase by 40 percent. In a letter to customers, the company attributed the highter fees to the Durbin Amendment, which capped the cost of debit transactions but resulted in fees for small transactions actually going up. 

"Due to increased cost related to the Durbin Amendment the transaction fee will be changed from 32 cents to 45 cents," the company said in its letter.

But Senator Durbin isn't buying that rationale. The Senator sent an open letter to Parkmobile USA Inc. CEO Albert Bogaard accusing the company of placing blame in the wrong place.

"Your company's email and press release incorrectly blame the Durbin Amendment for increasing your processing fees," Durbin said. "My amendment did not raise these fees, it put a ceiling on them. Visa and MasterCard raised your fees, and as a merchant you were helpless to stop them short of the ceiling the new law created."

Durbin's letter went on to accuse Parkmobile of dishonesty, siding with credit card companies and refusing to tell customers the truth. "So, I ask that you retract these misleading communications and provide your customers with a clarification that sets the record straight," Durbin said.

Senator Durbin sent a second open letter to D.C. Mayor Vincent C. Gray over the Parkmobile claims. A quote from Terry Bellamy, director for D.C.'s Department of Transportation, appeared in Parkmobile's press release. Senator Durbin objected to the impression conveyed by the quote that the Washington D.C. government "associates itself with the misleading views that Parkmobile has expressed."

The senator requested that Mayor Gray "avoid any potential confusion" by making it clear that the mayor and DDOT "(do) not agree with Parkmobile's analysis of the cause of these fee increases or endorse Parkmobile's disingenuous assignment of blame."

For more stories like this, visit the Regulatory Issues research center.

Topics: Carriers / Operators , Mobile Apps , Mobile/Digital Wallet , Regulatory Issues

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