Combined credit and debit card swipe fees from Visa® and MasterCard® have tripled over the past decade, equaling roughly $50 billion a year in profits for credit card companies. This has driven up costs for retailers and consequently for merchants at an estimated $427 annually per U.S. household.
In 2005, a lawsuit on behalf of approximately seven million merchants was filed against Visa and MasterCard. The lawsuit alleged that these credit card companies had colluded independently with banks to increase the price of credit card transactions and subsequently eliminate competition at the expense of retailers.
In July of 2012, a $7.25 billion settlement was reached in the lawsuit. However, despite being the largest private antitrust settlement in the Nation’s history, more than half of the lawsuit’s original plaintiffs opposed the offer, approximately half of the lawsuits original named plaintiffs opposed the offer. WalMart and Target have also opposed it, but they are not members of the original lawsuit.
According to, Mallory Duncan, Senior Vice President and General Counsel for the National Retail Federation (NRF), "The settlement still does virtually nothing to protect retailers or their customers from the abuses of the card industry, and it attempts to silence any objections for years to come." In fact, under the settlement, defendants are released from future claims and litigation regarding transaction fees, a major issue of concern for many of the lawsuit’s plaintiffs.
On October 22, 2012, a revised version of this antitrust settlement was filed in U.S. District Court in Brooklyn. There are several reasons for the opposition: First, $7.25 billion in reality represents less than three months of refund of the swipe fees collected by Visa and MasterCard from the millions of card users. Second, this lawsuit releases future claims by retailers and merchants eight months after the settlement is approved. Third, the settlement permits retailers and merchants to impose a checkout fee or surcharge, which is prohibited in several states, difficult to implement, confusing and penalizing to consumers. The relief to class members is illusory. Fourth, the settlement does not stop the wrongful conduct. Visa, MasterCard and member banks can resume their unlawful behavior eight months after the settlement is approved.
The NRF is not party to the lawsuit, but has stated their objection to the settlement, as indicated by their Vice President.
For more information about this class action lawsuit, please contact the Parker Waichman Law Firm or Duncan Firm using the form on this page or their toll free numbers.
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