Does MasterCard/Visa regulations allow for Business's to tack on Credit Card Surcharges? Because I was charged a $4.00 surcharge by a business to use a credit card. If it's not allowed. How do I report such a business to their merchant processor and do I file a claim with my financial institution?

Visa and MasterCard do not allow for surcharges for using your credit card. They strictly forbid it. Call your credit card company and report it to them. They should be able to point you in the right direction. You may want to chargeback that $4 as well.

There are many service fees that can be charged now and is approved by Visa/MC etc..

Here's some examples: Schools, taxes, drivers license and vehicle regs etc....

The OP did say it was a business that added the charge. I wasn't aware of any commercial type transactions that allowed added fees.

Actually it depends on which country the business has its merchant account. I can tell you that if you have a merchant account in Australia, you can charge a "service fee" to cover the merchant discount rate. A number of large Australian businesses such as Telstra charge this fee.

As stated - it really depends. Some examples on when a merchant can charge a surcharge

Charged for a bona fide convenience outside of the merchants customary payment channel
Disclosed to the cardholder as a charge for alternative payment channel
Added only to non face to face (if merchant is face to face merchant)
A flat or fixed amount
Applicable to all forms of payment
Disclosed prior to completing transactions
Included in total amount of transactionof course meeting the requirements is at the card associationss discretion. And the rules are re-interpreted every April and October, so things can change

Yep, the only constant thing about Visa & MC rules is that they constantly change. ;)

However, the list Corey outlined above is a good rule of thumb for U.S. transactions.

Even with the rules being what they are, merchants violate them every day. I can think of at least a half dozen merchants that I have seen locally ranging from little cafes to dry cleaners that have handwritten surcharge signs in their stores.

If they are called to the carpet, some of them will back down. Others will just ignore the warnings and a few will stop accepting credit cards. In many cases, it ends up just being a slap on the wrist unless it happens a second time.

Of course, if you were charged a surcharge without your knowledge, then that gives you an excellent opportunity to charge it back and illustrate their violation in the documentation you provide to your issuing bank. THAT would be a difficult chargeback for them to try to dispute considering they are in breach of VISA/MC policies!