U.S. District Court approves $5.54-6.24 billion settlement in swipe-fee lawsuit between merchants and credit card companies.
The U.S. District Court for the Eastern District of New York has given preliminary approval to a settlement reached in a lawsuit between merchants and credit card companies.
The lawsuit brought by merchants alleged Visa and Mastercard, separately, and together with certain banks, violated antitrust laws and caused merchants to pay excessive fees for accepting Visa and Mastercard credit and debit cards. Both groups have agreed to the settlement.
A Court hearing is now set for Nov. 7, 2019, to decide whether to approve the proposed settlement. The hearing also will address the requests for attorneys’ fees and expenses, and awards for the Class Plaintiffs for their representation of merchants in MDL 1720, which culminated in the settlement agreement.
Under the settlement, Visa, Mastercard, and the bank defendants have agreed to provide approximately $6.24 billion in class settlement funds. Those funds are subject to a deduction to account for certain merchants that exclude themselves, but in no event will the deduction be greater than $700 million. The net class settlement fund, after deducting court-awarded attorneys’ fees and costs, will be used to pay valid claims of merchants that accepted Visa or Mastercard credit or debit cards at any time between Jan. 1, 2004 and Jan. 25, 2019.
If the Court grants approval of the settlement, and if that approval is affirmed on any appeals, every merchant involved in the lawsuit that does not exclude itself from the class by the deadline and files a valid claim will get money from the class settlement fund. The value of each claim will be based on the actual or estimated interchange fees attributable to the merchant’s Mastercard and Visa payment card transactions from Jan. 1, 2004 to Jan. 25, 2019.
Merchants who are included in this lawsuit have the legal rights and options explained below.
Exclude themselves from the Settlement Class. Merchants who exclude themselves will not get any money from this settlement but can individually sue the defendants on their own at their own expense, if they want to. Merchants who wish to exclude themselves must make a written request, place it in an envelope, and mail it with postage prepaid and postmarked no later than July 23, 2019, or send it by overnight delivery shown as sent by July 23, 2019, to Class Administrator, Payment Card Interchange Fee Settlement, P.O. Box 2530, Portland, OR 97208-2530.
Object to the settlement. The deadline to object is July 23, 2019. To learn how to object, visit www.PaymentCardSettlement.com or call 1-800-625-6440. Note: Merchants who exclude themselves from the Settlement Class cannot object to the settlement.
Eventually file a claim to ask for payment. To receive payment, merchants will be required to fill out a claim form. Claims cannot yet be filed. If the Court grants final approval, and if that approval is affirmed on any appeals, the Court will approve a claim form and set a claim deadline. Claim forms will then be mailed to all identified merchants. When the time comes to file claims, merchants can submit them via mail or email, or may file online at www.PaymentCardSettlement.com.