A recent court settlement has ruled that Mastercard charged unjustified fees in the past, which could bring relief to hundreds of millions of consumers. Walter Merricks, an influential champion of consumer rights, has brought a class action against Mastercard. He accuses the company of charging illegal exorbitant access fees and has raised a years long legal battle. Additionally, retailers paid interchange fees to banks every time a customer used their card from 1992 to 2008. They passed these costs onto consumers by raising prices of goods and services.
The court’s unfavorable ruling opened US courts to a $300 million (£200 million) settlement for Merck. Of that, £100 million is set aside as compensation for consumers that were overcharged. Some 46 million shoppers in Britain may be entitled to redress. These people are assumed to have felt the effects of Mastercard’s high fees. The deadline for consumers to file their claims is the end of this year. If just 2.5 million claimants, or 5% of those eligible, claim, each will get an average of £45. But if not enough people claim, payments may be limited to £70 per person.
“Mastercard’s fees paid by retailers for processing card transactions had been unlawfully high,” said Walter Merricks, highlighting the extensive impact of these fees on consumers. He further stated, “Virtually all UK consumers had lost out for long periods by paying higher prices than they should have done as retailers passed on those costs.”
To be eligible for compensation, consumers had to reside in England, Wales, or Northern Ireland for a minimum of three months. This residency should have taken place between June 1997 and June 2008. For people living in Scotland, the eligibility cut-off date is even earlier – starting in May 1992.
Merricks expressed satisfaction regarding the settlement’s approval, stating, “The settlement that has today been finally approved represents a fair and just outcome for UK consumers.” This ruling not only signifies accountability for Mastercard but serves as a reminder of the potential consequences of corporate pricing practices on consumers.
