Deadline to exclude or object to monetary settlement in interchange fee litigation is July 23 

July 16, 2019

Consult your accountant and/or attorney on this
and other major business process decisions.

By Tuesday, July 23, merchants that accepted Visa and/or MasterCard between Jan. 1, 2004, and Jan. 25, 2019, can object to or exclude themselves from a class-action settlement over interchange, or swipe, fees.

Every time someone pays with a debit or credit card, the card networks and banks charge merchants a swipe or interchange fee.

In 2005, a small group of retailers sued the major card networks – Visa and MasterCard – claiming antitrust violations that illegally inflated the fees banks use to fund consumers’ credit card rewards.

In January of this year, the U.S. District Court gave preliminary approval to a proposed monetary settlement that could reach $6.24 billion and would be a minimum of at least $5.54 billion in the class-action portion of the lawsuit.

Besides the monetary damages, the litigation also seeks to make changes to Visa and Mastercard’s rules and business practices. Merchants can participate in the portion of the settlement regarding how the fees are set, even if they participate in the monetary settlement.

The impending settlement deadline is for the class focused on monetary damages. Meanwhile, the litigation on the card rules and practices continues.

The legal rights and options available to retailers included in this lawsuit at this point are:

  • Exclude yourself from the monetary settlement class. Merchants that exclude themselves will not get any money from this settlement but can individually sue the defendants on their own at their own expense, if they so desire. Merchants that wish to exclude themselves must make a written request, place it in an envelope, and mail it with postage prepaid and postmarked no later than July 23, 2019, or send it by overnight delivery shown as sent by July 23, 2019, to: Class Administrator, Payment Card Interchange Fee Settlement, P.O. Box 2530, Portland, OR 97208-2530. (See Page 10 of the settlement notice for more details.)

 

  • Object to the monetary settlement. The deadline to object also is July 23, 2019.  To learn how to object, visit PaymentCardSettlement.com or call 1-800-625-6440.  (See Page 12 of the settlement notice for more details on how to object.) Note: Merchants that exclude themselves from the settlement class cannot object to the settlement.

 

  • Eventually file a claim for payment. To receive payment, merchants will be required to fill out a claim form. Claims cannot yet be filed.  If the court grants final approval, and if that approval is affirmed on any appeals, the court will approve a claim form and set a claim deadline. Claim forms will then be mailed to all identified merchants.  When the time comes to file, merchants can submit claims via mail or email, or may file online at PaymentCardSettlement.com. Merchants who take the money will be barred from suing Visa, MasterCard and the banks for additional damages over the same issues for five years.

The proposed deal won preliminary approval from U.S. District Judge Margo K. Brodie in January, and a hearing on final approval is scheduled for Nov. 7, 2019, in U.S. District Court in New York.

Credit card swipe fees average about 2 percent but can be as much as 4 percent for some premium rewards cards and vary according to a merchants’ card volume and other factors. Applied to millions of transactions each day, these fees total some $80 billion a year nationwide.

SOURCES: Payment Card Interchange Fee Settlement website, Food Marketing Institute, National Retail Federation and Retail Industry Leaders Association.