Parkmobile fee hike causes scuffle with senator
By Dina ElBoghdady,
Is there anything that can’t be blamed on the Dodd-Frank Act?
Maybe the floods in New York or climate change.
Or higher parking fees.
Parkmobile, the District’s pay-by-phone parking contractor, invoked the sweeping financial overhaul measure as reason for a 13-cent jump in the transaction fees charged to customers — and then quickly apologized after touching off a political flap.
In an e-mail to customers last week, Parkmobile said the fees would rise from 32 cents to 45 cents starting Oct. 29 “due to increased costs triggered by recent federal legislative reform enacted by the Dodd-Frank Wall Street Reform and Consumer Protection Act’s Durbin Amendment.”
The missive did not escape the notice of Sen. Richard J. Durbin, the Illinois Democrat who wrote the amendment. At least half of his D.C. staff got the e-mail. And Durbin shot back, firing off angry letters to Parkmobile and D.C. Mayor Vincent C. Gray (D).
In the letter to Parkmobile, Durbin described the company’s assertions as “grossly misleading.” The senator said that his amendment did not raise the transaction fees but rather capped the fees that retailers must pay to banks every time a debit card is swiped.
“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 said. “Instead of honestly telling this story, you decided to side with the credit card giants and refuse to tell your customers what really happened.”
Durbin also put Gray on notice that Parkmobile, which has an exclusive contract with the District Department of Transportation, was putting out false information.
“It is inappropriate for a contractor, using District resources, to offer up incorrect, unsolicited legislative analysis while hiding behind poorly reasoned excuses for their own price hikes,” Durbin wrote in his letter to Gray.
After hearing from Durbin, Parkmobile apologized in a message to customers. Laurens Eckelboom, the company’s vice president of marketing, said that Parkmobile made “an overly simplistic statement about the underlying cause of increasing card transaction fees” and “left the potentially confusing impression that Federal legislation is to blame.”
In a separate e-mail to customers who complained, Parkmobile said that when Durbin’s measure capped the fees that card companies can charge, the companies responded by raising the fees across the board to the maximum limit. Parkmobile’s processing costs tripled as a result, and it put off passing along the increase until this month, when it offered customers a new service designed to lower the fees, the company said.