Costco reaches settlement with Visa, Mastercard over high transaction fees

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Costco Banks class action settlement overview

• Who: Costco reached a settlement with Visa, Mastercard, Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo.
• Why: The deal marks the end of 17-year-old multidistrict litigation that accused the financial companies of charging high transaction fees.
• Where: The class action lawsuit was filed in New York federal court.

Costco closed out 17-year-old multidistrict litigation by reaching a deal with Visa, Mastercard, and several banks who were accused by the wholesale retailer of conspiring to charge merchants anti-competitively high transaction fees when consumers used their credit cards. 

Details of the settlement were not included in the parties’ stipulation filed in New York federal court. The stipulation states that Costco “fully settled all of its claims against all of the defendants.”

The multidistrict litigation was first consolidated in 2005 and included several retailers like 7-Eleven, Walmart, and Starbucks. 

Costco settlement follows previously failed deal

A deal in this multidistrict litigation was initially reached in 2012, but fell apart when Costco and several other merchants opposed its terms. Per the deal, Visa and Mastercard promised to pay more than $6 billion to the affected merchants, to reduce their interchange fees for eight months, and to change their rules to allow merchants to charge customers an extra credit processing fee. 

Merchants opposed the deal, saying it didn’t address the claims brought forth in the litigation and prevented them from future legal action. 

In 2013, the National Grocers Association voted to oppose the settlement agreement and 19 retailers, including Costco, Starbucks, Walmart, The Gap, J. Crew, 7-Eleven, and Crate & Barrel opted out of the settlement. 

What do you think of the Costco settlement with Visa, Mastercard, and the big banks? 

The plaintiff is represented by Constantine Cannon LLP.

The Costco Banks Class Action Settlement is In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, Case No. 1:05-md-01720, in the US District Court for the Eastern District of New York.

Read About More Class Action Lawsuits & Class Action Settlements:

• Student loan settlement to discharge $6B in student loan debt, forgive Westwood College loans
• Facebook reaches settlement with Feds to end biased housing ads
• New York Times class action claims news organization conducts auto renewal scheme
• Consumer Financial Protection Bureau wants buy now, pay later info on credit reports