According to court documents filed in London, a legal case brought against Mastercard demanding 14 billion pounds ($19 billion) in damages for allegedly charging excessive fees could potentially benefit some 46 million people in Britain.
When shoppers swiped their debit or credit cards, the payments company charged unlawfully high fees to stores which were, the case that has been brought by a former chief financial services ombudsman alleges.
In more than 600 pages of documents filed at the Competition Appeal Tribunal on Thursday, the suitors alleged that Mastercard had been doing this unfair business for 16 years between 1992 and 2008.
“This was almost an invisible tax. Mastercard has behaved disgracefully in this. They have not had the reasonableness to accept that what this was doing was damaging UK consumers,” Walter Merricks, who is bringing the case, told the BBC.
The wrongdoing has been vehemently denied by Mastercard in a statement.
“We continue to firmly disagree with the basis of this claim and we intend to oppose it vigorously,” the world’s second-largest payments network said.
In 2014, Mastercard’s fees to store owners to process international payments within the EU were found to be excessive by the European Union’s antitrust regulator and the latest lawsuit follows that case.
The lawsuit would be brought under a law meaning consumers would automatically be claimants unless they opt out and Law firm Quinn Emanuel said that the lawsuit was the largest damages claim in British history. Any person living in Britain would automatically be part of the claims if that individual was over 16 years old in the period covered by the lawsuit and if he or she had used a credit card, cash or cheques in the period covered.
According to a Reuters’ calculation, each person could receive more than 300 pounds each if the 14 billion pound claim was shared equally between the number of eligible claimants.
Between 1992 and 2008, fees in excess of 1 percent for card use on international transactions were charged by Mastercard to shops, a lawyer working on the case said. The EU’s anti-trust regulator’s 2014 ruing impacted British consumers as it was the default fee used in Britain even though the regulator’s decision only ruled that Mastercard’s international fees were illegal.
The fees that retailers pay were capped at 0.2 percent for debit cards and 0.3 percent for credit cards two years ago by the European Union.
The case is a watershed moment for consumer compensation in Britain, Merricks in a statement said. Merricks had helped to settle disputes between consumers and financial services companies while he was head of Britain’s financial services ombudsmen for ten years until 2009.
In the last five years¸ a range of misspelling cases have plagued the Britain’s banks. Creating the costliest scandal in Britain’s financial services, the banks have paid 24 billion pounds in compensation for mis-selling loan payment insurance.
The collective claim against Mastercard can also include consumers no longer living in Britain, but who lived in the country between 1992 and 2008. Unless MasterCard settle it out of court, any hearing on the case is not expected until early 2018.
(Adapted from Reuters)
Categories: Regulations & Legal