$900M Added to Visa, Mastercard Swipe Fee Class Action Settlement

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.

A New York federal judge preliminarily approved a massive Visa, Mastercard swipe fee settlement, which would add an additional $900 million for merchant Class Members.

The deal was granted initial approval by U.S. District Judge Margo Brodie, who also required some changes be made to the class notice.

The settlement resolves claims that Visa, Mastercard and a number of banks artificially hiked the swipe fees for businesses that allow customers to use credit and debit cards.

The claims were consolidated into a Visa, Mastercard swipe fee multidistrict litigation (MDL) and the credit card companies attempted to settle the class action lawsuits by offering nearly $7 billion.

While Visa and Mastercard agreed to pay Class Members, including an estimated 7 million merchant claims, and agreed to reduce fees for card swipes, the deal drew controversy almost immediately.

The $7 billion settlement agreement was granted final approval in 2013, but was appealed by unhappy Class Members.

Merchant Class Members opposed the Visa Mastercard fee MDL settlement because the financial companies did not agree to any limit on continued fee increases.

Further, the approved settlement agreement divided Class Members into two groups – one that would receive a monetary award, while the other would receive injunctive relief only. The deal protected Visa and Mastercard from future litigation, pointed out the objecting Class Members.

Additionally, Class Members contended that the settlement agreement did not prohibit merchants from passing the cost of the fee for card swipes onto customers as a surcharge, but that the practice is prohibited in a number of states.

The appeal to the settlement agreement went to U.S. Court of Appeals for the Second Circuit, which reversed approval of the deal and determined that the proposed Classes required separate class representatives. This decision was appealed all the way to the U.S. Supreme Court.

In the meantime, Visa, Mastercard, and other banks entered into a new settlement agreement that would add an additional $900 million for merchant Class Members.

Under the terms of the settlement agreement, Mastercard will pay $108 million, while Visa will be responsible for $600 million of the $900 million total. Other banks will make up the difference.

Law360 reports that large retailers may choose to opt out the settlement and pursue separate litigation against the credit card companies. As such, the total settlement amount ranges from approximately $5.5 billion and $6.26 billion.

“We believe we have an excellent settlement that will end at least the 23(b)(3) class proceedings in this case,” an attorney for the merchants who objected to the settlement told Law360, noting also that they were happy with the judge’s approval.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The merchants are represented by Robins Kaplan LLP, Berger Montague PC, and Robbins Geller Rudman & Dowd LLP.

The Visa Mastercard Swipe Fee Class Action Lawsuits are In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, Case No. 1:05-md-01720, in the U.S. District Court for the Eastern District of New York.

UPDATE: March 2019, a settlement website has recently been established for Class Members in the Visa, Mastercard swipe fee class action lawsuit. While Claim Forms are not currently available, the website provides an opportunity for Class Members to pre-register to receive one.