Class action lawsuits threaten major credit cards
VISA and MasterCard services are essential to commercial transactions and business cash flow, but higher-than-average fees – called multilateral interchange fees – have caused controversy in the business community and have now led to a class action against the credit card institutions that is expected to start early in 2023. The action is expected to be a success.
Visa and mastercard
In April 2023, Visa and Mastercard are due to appear at the Competition Aleal Tribunal (CAT) to defend themselves against claims made against them. A large number of businesses are seeking damages for what is perceived as unlawful charges for commercial transactions.
The claims against these major credit cards are expected to proceed to a full trial next year involving a number of litigation lawyers. One conveyancing solicitor suggests that UK businesses were overcharged and have a strong case against the credit cards in the courtroom.
It was litigation lawyers from a range of companies that brought the class action against the credit card companies. These lawyers – specializing in litigation, competition litigation, and class action lawsuits – brought the claim to CAT, the UK’s judicial body for anti-competitive claims.
The case centers around the multilateral interchange fees (MIFs) charged to businesses for accepting corporate credit cards, along with debit and credit cards used by overseas visitors. The claim has now been made official and moves towards a courtroom date early next year.
Anti competitive and unlawful
The MIFs set by the “big two” credit card firms are claimed to be anti-competitive and unlawful by litigation lawyers. They claim that Visa and MasterCard have forced banks to accept a
higher-than-average MIF level using their status and market strength to insist on higher fees.
Some lawyers have stated that the MIF fees are unlawful and should be abolished. Not only should the UK businesses affected receive full compensation, but the interchange fees need to be dropped in the interests of health market competition – so it could be a landmark case.
Consumer credit cards
Litigation lawyers are full of confidence going into the trial as the UK Supreme Court, and the Court of Justice of the EU has already condemned the practice of multilateral interchange fees. It is now time for the UK courts to step in and eradicate unlawful commercial and regional fees.
The unlawful interchange fees harm some businesses more than others, such as travel, hospitality, retail, and luxury sectors, but at a time when the economy is seriously struggling, it seems appropriate to abolish them and support more growth in these leading trade bodies.
This litigation is a class action open to a large number of businesses; VISA and MasterCard can expect support from most areas of industry affected by the fees, including large international companies, small, medium, and large businesses, as well as some non-UK companies as well.
The current economic climate is not conducive to higher-than-average fees for commercial transactions, but that’s not the only reason litigation lawyers are confident of a successful outcome. They already have the backing of the UK courts and the competition authorities.