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Class action lawsuit served against Visa and Mastercard to contest interchange fees

Class action lawsuit served against Visa and Mastercard to contest interchange fees

A significant class action lawsuit has been served against Visa and Mastercard at the UK’s specialist competition tribunal on behalf of a large number of claimants seeking damages for allegedly unlawful interchange fees charges.

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Class action lawsuit to contest interchange fees

Harcus Parker has brought the corporate card claim at the Competition Appeal Tribunal (CAT), the UK’s specialist judicial body for hearing competition cases.

The class action seeks compensation for UK businesses, which were charged Multilateral Interchange Fees (MIFs) for accepting payments using corporate* credit cards, and credit and debit cards from overseas visitors.  The CAT has published the claim on its website.

Harcus Parker claims that Visa and Mastercard have forced banks to agree to a level of MIFs set by the two giants, which are “anti-competitive and unlawful”.

“We want to make sure that businesses across the UK economy are properly compensated. We are making a stand against unlawful interchange fees, which should be abolished,” said Jeremy Robinson, competition litigation partner at Harcus Parker.

“Both the Court of Justice of the EU and the United Kingdom Supreme Court have condemned this practice for consumer credit and debit cards. The UK courts should now clamp down on commercial card and inter-regional fees.”

Multilateral Interchange Fees make up the greater part of the service charges levied by banks on businesses when customers pay by card. Typically, for every £100 spent, up to £1.80 is charged on payments made by corporate cards, or cards used by overseas visitors – costs which are borne by companies throughout the UK.

“UK businesses in the travel, hospitality, retail and luxury sectors are particularly hurt by Mastercard and Visa’s multilateral interchange fees” according to Robinson.

Since 2015, EU law capped Multilateral Interchange Fees at 0.3% on consumer credit card transactions, and 0.2% for consumer debit cards.

However, this cap did not apply to corporate credit and debit cards or for inter-regional transactions.  These sales have continued to attract fees of up to 1.8% per transaction.

Harcus Parker accuse Mastercard and Visa of requiring banks to charge anti-competitive MIFs on businesses. These MIFs for corporate and inter-regional payments should be 0%, say Harcus Parker.

The class action is open to all business, including large international companies and local businesses, as well as some non-UK companies. Many of these businesses, particularly in the travel and hospitality sectors but also the luxury sector too, have been particularly hard hit by Brexit and Covid-19.

The CAT is expected to hear the first round of the case in late 2022 or early 2023, when it will decide whether the case can be certified to go forwards to trial.

The case is financed by a third party litigation funder, Bench Walk Advisers, and is fully insured.

 

The post Class action lawsuit served against Visa and Mastercard to contest interchange fees appeared first on Payments Cards & Mobile.

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