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Consumers irate over higher gas prices for credit cards

BY CAROL POLSKY | carol.polsky@newsday.com

7:27 PM EDT, July 9, 2008

Peter Jespersen joined a growing number of disgruntled drivers Wednesday when the gas he thought was costing him $4.29 a gallon turned out to cost 10 cents a gallon more -- because he was using his credit card.

The street sign at the Shell station on Commack Road near Exit 52 of the Long Island Expressway had advertised $4.29, but he said he was aggravated to notice a sign atop the pump informing him of the higher price for credit. When he looked back at the street sign, he saw the listed price was for cash.

"I hadn't noticed that," said Jespersen, 37, a Setauket architect. "So it was unexpected. If you're going to have a different price for cash and credit, I feel like it should be advertised on the street sign."

He's not alone. As gas prices climb and consumers watch pennies, more of them are angrily lodging complaints about the price differential with consumer affairs offices in Nassau and Suffolk counties.

In Suffolk, 92 inquiries have come in as of Wednesday, compared to 125 for all of last year, while in Nassau, the rate is about double that of last year's, officials say.

But consumers may not be happy with what they hear.

"We get complaints and inquiries: Can they do that? And the answer is, 'Yes, they can,'" said Charles Gardner, commissioner of the Suffolk executive's Office of Consumer Affairs.

Credit card fees add an average of 3 percent in costs to station owners for each transaction, said Kathryn Odessa, executive director of the Long Island Gas Retailers Association.

A gas station's street sign can advertise the lower cash price without stating the higher credit price, as long as it says "cash" alongside the price, and as long as the prices for both credit and cash are displayed atop each pump.

The law states that while gas station owners may not charge more for credit card use, they can discount cash purchases, said Richard Russ, assistant director of the Bureau of Weights and Measures in the Nassau executive's Consumer Affairs Office.

Consumers "are not expecting it, so they don't look for it," Gardner said of the smaller signs, noting that one irate consumer sent in a video of a gas station where those signs were clearly visible.

"His complaint is that it is illegal to do that, that it was a scam and a bait and switch," Gardner said. "But it's obviously not a bait and switch when the signs are right there."

Complaints are promptly investigated, and in "99 percent of the cases," stations are found in compliance, Russ said, noting that stations have charged the differentials on and off for years.

Many stations are barred by contracts with oil and gas suppliers from discounting cash purchases, Odessa said, adding that her organization, which represents more than 800 stations, was looking into the legality of such restrictions.

Meanwhile, consumers are angry, and "it's very difficult for them to understand when someone from our office explains that there really was no illegality," Russ said.