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Opt-outs of $7.2 bln credit card fee settlement face risks
Over the last few weeks, some of the largest retailers in the United States have split off from a proposed $7.2 billion class action settlement over an alleged conspiracy to inflate credit card fees, hoping they can do better on their own. But their path is not without significant risks. Craig Wildfang of Robins, Kaplan, Miller & Ciresi, who has served as one of the lead lawyers for the class, said that merchants striking out on their own may not appreciate the novel nature of the claims made in the class action. “I think they have greatly underestimated the risk of the case and probably overestimated their ability in the short and medium term of getting greater economic value in a settlement,” Wildfang said.
The Whiners and the Winners of the Credit Card Wars
I believe that retailers need to stop bemoaning credit card swipe fees as a kind of necessary tax. Businesses aren’t forced to accept credit cards, and many smaller businesses do fine as cash-only businesses. Meanwhile, Visa and MasterCard provide companies with an invaluable service – keeping transactions digital and allowing retailers to avoid the hassle, expenses and danger of stockpiling large quantities of cash. Accepting credit cards also generates higher sales volume from more shoppers who use plastic for their everyday needs. Credit card usage also encourages pricier purchases – spending $1,000 in cash sure feels a lot more costly than swiping and signing on the dotted line. Lastly, swipe fees are often used to enable reward cards, which can keep customers coming back to spend more. In other words, retailers have plenty to thank Visa and MasterCard for. However, they continue to see swipe fees as taxes and an … Continue reading
Visa, MasterCard Strike Back at Swipe-Fee Settlement Foes
Visa Inc. (V) and MasterCard Inc. (MA) are firing back at retail trade groups trying to derail a pending $7.25 billion settlement over so-called merchant swipe fees. The world’s largest payment networks asked a federal judge Friday to rule that their practices for setting fees paid by merchants that accept credit and debit cards aren’t anticompetitive, which could limit the type of lawsuits retailers could bring against the companies in the future. Such a ruling is “necessary to prevent the continuation of endless, wasteful litigation” between merchant trade groups and Visa and MasterCard, the companies said in a complaint seeking declaratory judgment filed in U.S. District Court in Brooklyn.
Visa, MasterCard Sue Interchange-Fee Settlement Drop Outs
Visa Inc. (V) and MasterCard Inc. (MA) sued trade groups and retailers that rejected a $7.25 billion settlement in a price-fixing suit and asked a court to rule that the card companies’ fee practices weren’t illegal. “After years of negotiation, the same retailer trade groups that willingly agreed to a multibillion dollar settlement are now turning around and demanding even more,” said Trish Wexler, a spokeswoman for a coalition representing the interests of the payment card industry. “Enough is enough — these tired old arguments and this battle needs to be put to bed.”
4 ways to know if a merchant is charging a fee for credit card transactions
Consumer advocates are reminding shoppers to look out for merchants that impose credit card surcharges. Merchants must meet certain requirements if they impose a surcharge on credit card purchases: • Retailers must post a notice at the entrance of their stores and at the point of sale. • The retailer has to disclose the surcharge percentage and explain the fact that the charge is being imposed by the retailer (not the credit card company) and does not exceed the amount the retailer pays to accept credit cards. • Receipts need to show the dollar amount of the surcharge. • Online merchants must alert consumers that a surcharge will be imposed on the webpage where credit cards are first mentioned. “The rule of thumb is this – you can’t gouge your customers, and you can’t hide the fees,” said Trish Wexler, spokeswoman for the Electronic Payments Coalition, which represents banking and financial institutions, including Visa … Continue reading
The illegal debit card fees that just won’t die
Some gas stations, convenience stores and other merchants are illegally charging fees for debit card users, as well as putting minimum purchase amounts on customers who use the bank cards, according to a new report. A January settlement of a class-action lawsuit allowed merchants to start adding “checkout fees” on customers who pay with credit cards, but it exempted debit card users. Despite this, some merchants still hit debit card users, GoBankingRates.com reports. So what should you do if you’ve been charged an illegal fee? If you live in one of those states that outlaw credit card processing fees, Visa encourages you to report the retailer to your state attorney general’s office. Consumers hit with minimum purchases or surcharges on debit cards should also call the customer service number on the back of their cards, the report says. That’s because banks that issue the cards will report violations to Visa or MasterCard.
Swipe-Fee Settlement Objectors Spared Contempt Finding
U.S. District Judge John Gleeson in Brooklyn, New York, today said he would “give the benefit of the doubt” to trade associations opposing the agreement and told them they should better police the websites for misstatements. “I think there’s a powerful incentive for the objectors to be sure they’re not basing their argument on ground that’s not so firm,” Gleeson said. Gleeson said on April 11 that the sites contained “bad information” that may have persuaded some merchants to drop out of the settlement and he ordered the groups to make corrections. One of the sites, Merchantsobject.com, continued to “obfuscate” key points as of April 24, the judge said in a written order that day.
Judge threatens trade groups with contempt in card-fee pact
A federal judge has taken the unusual step of threatening to hold retail trade groups in contempt for a website urging merchants to reject a proposed $7.2 billion settlement with Visa Inc and Mastercard Inc over credit card fees.
Judge in U.S. credit-card fees case assails critics’ website
A U.S. judge on Thursday scolded retail trade groups for creating websites urging millions of fellow merchants to reject a proposed $7.2 billion settlement with Visa Inc and Mastercard Inc over credit card fees. U.S. District Judge John Gleeson singled out the merchantsobject.com website of the National Association of Convenience Stores (NACS), which tells merchants to “take action” and says their options are to “opt out” or “object.” He said the wording of the websites could prompt merchants to think that accepting a settlement was not an option. “It’s not fair,” Gleeson said during a 15-minute hearing in Brooklyn federal court prompted by a complaint from the lead class counsel for a proposed class of 8 million merchants. “It’s completely misleading.” He gave the lawyers for pro- and anti-settlement retailers one week to submit proposals on appropriate relief. He said he would not order the sites be taken down but … Continue reading
Judge Orders Merchant Trade Groups To Correct Swipe-Fee Websites
A federal judge on Thursday ordered merchant trade groups to correct information on websites intended to drum up retailer opposition to a multi-billion-dollar class-action settlement with Visa Inc., MasterCard Inc. and several large banks. At a hearing in U.S. District Court in Brooklyn, Judge John Gleeson said the groups in question, which are plaintiffs in suits against the payment networks, must add a banner to their websites stating that Judge Gleeson has determined prior information on the sites to be misleading, according to people who attended the hearing. They must also include a link to a court-approved website with information about the settlement.
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