Colorado Attorney General Phil Weiser has reached a settlement with Domuso Inc., a Los Angeles-based rent payment processor, resolving allegations that the company’s percentage-based card fees violated the state’s surcharge and junk fee laws. The consent judgment requires Domuso to cap card payment fees at 2%, terminate revenue-sharing arrangements with landlords, and pay $100,000 to the state.
The case turned on Domuso’s “Certified Funds” product, which guarantees rent payments to properties while the company absorbs chargeback and return risk. Tenants paying by credit or debit card were charged a 3.25% fee, which on a $2,000 rent payment amounts to $65. Colorado’s surcharge statute caps such fees at 2% and requires clear disclosures, which the state alleged Domuso never provided. By comparison, certified ACH payments carried only a flat $3.99 fee.
The state’s complaint offers a window into the economics driving the fees. Domuso reportedly told shareholders that when properties eliminate paper checks and require digital payments, average revenue per unit jumps from roughly $1 to $3.50, an increase of about 250%. In August 2024, the company entered a revenue-sharing agreement with at least one large property client, giving both parties a financial stake in tenants choosing fee-generating card payments. The state also alleged Domuso could confirm check-scanning capability at only 72.8% of its properties, meaning some tenants may have lacked the cost-free payment option Colorado’s junk fee statute requires.
Under the settlement, Domuso must provide free check-scanning software to Colorado properties, maintain its mobile check pay option, and submit annual compliance reports for two years. The company denies liability and said it settled to avoid litigation costs.
The action shows state AGs applying surcharge statutes and junk fee laws to payment intermediaries rather than just merchants and landlords, a theory that could extend to convenience fees charged in collections and payment portals. It also reflects the continued momentum of state-level junk fee enforcement as federal activity in the space has slowed, with fee-sharing arrangements drawing particular scrutiny as evidence of misaligned incentives.
Read the complaint. Read the consent order
