Future of Payments
Massive damages claim filed against MasterCard over charges to UK shoppers
8 September 2016
A £14 billion damages claim has been filed against MasterCard in a UK collective action over card charges that were passed on to shoppers.
The claim - led by former financial services ombudsman Walter Merricks, who has instructed US-based law firm Quinn Emanuel - was filed on Thursday at the Competition Appeal Tribunal (CAT) in London under the new Consumer Rights Act 2015.
It claims MasterCard set unlawfully high interchange fees - charged to stores when shoppers swipe their debit or credit cards - for 16 years, which were passed on to consumers in the form of inflated prices for good and services.
In 2014 the European Court of Justice declared that such fees were a violation of EU antitrust rules.
On April 29 last year the European Parliament and the Council of the European Union adopted the Interchange Fee Regulation, and caps of 0.2% for debit cards and 0.3% for credit cards came into effect on December 9.
MasterCard has said it “firmly disagrees” with the basis of the claim.
Mr Merricks said: “MasterCard charged billions of pounds of unlawfully high fees for its sole benefit and to the detriment of consumers. It has already been found to have broken competition law, the basis of which was to protect consumers, and that cannot be disputed.
“The filing of this claim is the first step towards consumers obtaining compensation for what MasterCard did. I am confident that the CAT will authorise the claim to go forward, and I look forward to the opportunity to present our case. This is a watershed moment for consumer redress in this country.”
Quinn Emanuel partner Boris Bronfentrinker said: “MasterCard has itself argued before English courts that any unlawful charges were passed on to consumers by retailers when trying to defend itself in cases brought against it by retailers.
“Despite arguing that consumers bore the cost of its illegal fees, MasterCard has made no efforts to try to compensate consumers through new voluntary compensation mechanisms.”
MasterCard said: “Now that the claim has been filed, we will take time to review it in detail, however we continue to firmly disagree with the basis of this claim and we intend to oppose it vigorously.
“We deliver real value through the benefits of security, convenience and consumer protection, and we are committed to investing in our payment services in order to continue to meet the rapidly evolving needs of all our customers.”
All UK consumers who paid the charges and are currently living in the UK will automatically become part of the group of claimants unless they explicitly opt out.
Those no longer living in the UK but who were here between 1992 and 2008 will have the opportunity to opt in.
Photo from Andrew Matthews / PA Wire