All you need is a dollar and a dream to play the Lottery, except if you're paying with MasterCard — then it's an extra 10 bucks.
Plus interest.
The credit card company has quietly been treating subscription purchases of Lotto or Mega Millions tickets as cash advances — making them subject to an extra fee.
MasterCard is also charging higher cash advance level interest on the Lottery ticket purchases, as much as 24.9% percent in some cases.
That, too, is a no-no, Lottery officials said.
"They're breaking state law," said Jennifer Givner of the New York State Lottery. "It is illegal to charge additional fees beyond the price of a lottery ticket."
Givner said Lottery officials have alerted MasterCard, via an intermediary, and are "examining ways to fix this."
She said about 22,000 customers pay their Lotto subscriptions with credit cards.
"A number of our customers have already started using other forms of payment for their subscriptions," she said.
MasterCard passed the blame for the extra bucks to the banks that issued the cards.
"We don't have rules that prohibit issuers from charging a cash advance fee," a spokesman said. "Fees charged to cardholders are up to the individual issuer."
Several disgruntled MasterCard customers told the Daily News the firm's move was hardly priceless.
"They're collecting money off of people when they shouldn't be," said Christina Wilkinson, 37, of Ridgewood, Queens, who bought two yearlong subscriptions using her Chase MasterCard last month.
Wilkinson said there were two $10 service charge fees - and daily finance charges — that weren't there in 2009 when she made a similar purchase with her credit card.
When she called Chase MasterCard, they blamed the Lottery for the extra charge, Wilkinson said.
Wilkinson was eventually able to convince Chase to drop the $20 in service fees — but still had to pay the finance charges.
Tim Tango wasn't so lucky. He was socked with a $10 advance cash fee and interest charges for using his Chase MasterCard for a July 15 purchase of a yearlong Lotto subscription.
"They refused to help me," said Tango, 55, of Seatuket, L.I. "So I said, 'Cancel the card.' "
Tango, a Chase customer for 30 years, wound up having to pay off the complete balance with the added Lotto charges.
Yet another customer, who asked not be identified, provided a credit card statement which showed that Capital One MasterCard charged him the $10 fee for a $50 Lotto subscription — and an immediate $1.18 in interest on the combined amount.
MasterCard began treating Lottery ticket purchases as cash advances around June 1, when a new federal law aimed at cracking down on Internet gambling went into effect.
State Sen. Joseph Addabbo (D-Howard Beach) has called for an investigation. "It seems to be a misinterpretation of federal law," Addabbo said.
Thanks to truesee for the tip.
MasterCard is guilty of outright gouging and I hope they get clobbered for it legally.
They should pay back double to everybody they screwed and then massive punitive damages on top of it just to get the message out to all the would-be crooks out there.
Cancel your card. That's how you hurt 'em!
Yeah but you hurt yourself too, especially if you've had it 30 years like the one guy. Your credit score usually plummets when you lose an old credit line unless you have a bunch of other old lines to make up for it.
It would be better to pay it off immediately and then don't use it. That way you keep the benefit of an old credit line, they lose money from stores on usage fees and they lose money on interest you've been paying. It's a win/ lose/ lose situation.
FWIW I know some cards require usage occasionally or they'll cancel the card. So you'd have to use it to buy a small item every 10 or 12 months and pay the bill before interest accrues.
Mastercard would not be at fault here. Mastercard isn't a bank that "loans" the money on a credit card, they are a payment processing company. It would be up the the bank that handles the card to charge fees or not. In now way is this Mastercard's fault, it would be Capital One, Bank of America, Chase, or whatever bank the credit card is from. I think the story is kind of misleading.
Brad
I agree with you 100%. The greedy bas-tards should be fee gouged themselves. Sound like a lot of buck passing on behalf of the government and banks. Yet they pay no hefty fees when they take their greedy butts on gambling excursions to Monte Carlo or Vegas themselves.
That's why I always pay cash for my lottery purchases and if i order anything I pay with a money order and the only credit card I use is a pre-paid credit card. Keeps me on my monetary budget and I don't have a monthly bill every month. No money on the card, no charging for me.
Viva la prepaid charge cards. I recommend them to anyone.
Our state lottery won't allow credit card purchases of lottery tickets. It's just as well. Playing games of chance with money you don't have yet is a sure way to find yourself living on the street.
YEAH most gambling isnt allowed on credit. one of my staes lotto orgs had a buy via credit card on their website, and i took advantage of that for about 2 years, before someone have a prob wei noticed and it all ended.
but i dont have a prob with them charging cash advance fees, it is meant to be a cash only game. so the charges should be same lvl as cash
I thought of becomming a subscriber a few times. Thought I'd use my debit card (cash), I wouldn't need to spend money on gas driving to stores that way (plus spending extra money on non-lottery related store purchases).
However, has anybody won a net multi-million $ JACKPOT yet who was a subscription ticket holder? If yes, please share the details.
In Virginia, I've bought lottery tickets with a debit card - I couldn't buy them with a credit card.
In South Carolina, I could not figure out where I put my cash, and you had to pay for lotto tickets in cash.
I don't know how Georgia works, because I use cash for almost everything.
usually, they don't accept credit card for Lottery here.
not allowed to use credit cards here in mich.