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Groundbreaking British class action suit for 46 million customers against Mastercard for 14 billion British Pounds

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I know that Fatwallet is generally an American site, but I'm posting this topic for two reasons:

1.  A number of Fatwallet readers live, or previously lived, in the UK and/or the EU, and have, or had, Mastercards from British issuers. 
(I am such a Fatwallet reader.)

2.  The UK has a new legal approach to class action lawsuits and this is a landmark case for them,
and, as such, I thought the topic might be interesting in a general sense for some Fatwallet readers.

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Notable information about this claim 
(from from a second article I have found which I've added to the end of this post):

* Might be worth up to 450 British pounds per customer.

* Consumers no longer living in the UK, but who were here between 1992 and 2008 will have the opportunity to opt in to the collective claim.

* All UK consumers who used MasterCard credit cards, or even cash, cheque, or any other payment method, for their purchases during that period [1992 - 2008] and are currently living in the UK will automatically become part of the claim.

* Any hearing on the case is not expected until early 2018, following a trial, unless MasterCard settle it out of court.  If the claim is successful, it could be up to two to three years before compensation is paid out.

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first article that I found:

Credit card group MasterCard is being sued for 14 billion British Pounds, the largest legal claim in British history, in a landmark lawsuit over allegations that it overcharged 46 million UK consumers.

From the Guardian newspaper
September 8, 2016
https://www.theguardian.com/money/2016/sep/08/mastercard-sued-for-14bn-over-allegedly-overcharging-customers 

"Credit card group MasterCard is being sued for £14bn, the largest legal claim in British history, in a landmark lawsuit over allegations that it overcharged 46m UK consumers.

The claim, which MasterCard said it would oppose vigorously, is the first major case under a new framework for class action lawsuits on behalf of multiple claimants. It revolves around fees imposed by MasterCard on businesses that accepted its debit and credit cards between 1992 and 2008.

Law firm Quinn Emanuel, which filed the suit at the Competition Appeal Tribunal, alleges that these charges – known as “interchange fees” – were set at an unlawfully high level and pushed up prices for British consumers.

The claim was brought by Walter Merricks, the UK’s former chief financial services ombudsman, on behalf of around 46m consumers he claims have lost out.

It follows a 10-year legal battle between MasterCard and the European commission that ended in 2014 with the European court of justice concluding that the credit card firm’s fees for cross-border transactions were too high.

In a long statement on its website, the law firm said MasterCard has spurned a chance to settle with the commission, instead of choosing to fight its case through the courts.

“MasterCard lost this battle at every level and showed complete disregard for its cardholders and consumers at large, focusing instead on generating unlawful profits,” Quinn Emanuel said in a statement.

Merricks, who spent 10 years in charge of oversight of British financial firms, said: “The filing of this claim is the first step towards consumers obtaining compensation for what MasterCard did.

“MasterCard charged billions of pounds of unlawfully high fees for its sole benefit and to the detriment of consumers. It has already been found to have broken competition law, the basis of which was to protect consumers, and that cannot be disputed.

“There is no basis upon which MasterCard can contend that its card fees were not unlawful.”

He said that because MasterCard’s fees had already been ruled unlawful in the European court, the claim need only prove that consumers suffered losses as a result.

Under the UK’s framework for lawsuits on behalf of multiple people, which was overhauled in the Consumer Rights Act of 2015, anyone who lost out is automatically eligible for compensation unless they opt out explicitly.

Boris Bronfentrinker, a Quinn Emanuel partner, said: “Despite criticising this action publicly in July and further insulting consumers by referring to the UK’s new collective action regime as ‘unfortunate’, MasterCard has since turned over evidence [witness statements and expert reports] that allows us, even at this early stage, to robustly value the claim at £14bn.

“They are now preparing for a tough legal battle which we estimate will go to trial in 2018 unless they are prepared to make UK consumers a fair settlement offer before then.”

He said MasterCard had made “no effort” to compensate consumers who lost out, despite acknowledging that the fees had been passed on to them.

“It is not clear how MasterCard can now turn around and argue the opposite to prevent our case from succeeding,” he added.

MasterCard said: “Now that the claim has been filed, we will take time to review it in detail, however we continue to firmly disagree with the basis of this claim and we intend to oppose it vigorously.

“We deliver real value through the benefits of security, convenience and consumer protection, and we are committed to investing in our payment services in order to continue to meet the rapidly evolving needs of all our customers.”

In a separate blog post, the company said interchange fees are good for consumers and said similar cases in the US had been thrown out of court. Interchange fees are paid by a retailer’s bank to the bank that issued a credit card used in any transaction. The retailer’s bank then charges the retailer to cover its cost. The fees are fixed by credit card companies and are often incorporated into the prices that shops then charge consumers.

Funds linked with Chicago-based Gerchen Keller Capital, the world’s largest litigation funder, will provide up to £40m to fund the litigation.

There has been one previous case under the new rules on collective action lawsuits, on behalf of pensioners who claim they paid too much for their mobility scooters. But the case against MasterCard is the first to test rules intended to allow suits on behalf of vast numbers of claimants. "

====
Second article:

from the Daily Mail newspaper
September 8, 2016
from:  http://www.dailymail.co.uk/money/news/article-3779820/Shoppers-share-14bn-Mastercard-fees-legal-action.html 

40 MILLION British credit card users could EACH receive a £450 windfall as MasterCard is taken to court over £14bn of ‘unfair charges’

"Around 40 million British credit card users could be handed £450 each as legal action has been taken against MasterCard over £14billion of 'unfair charges' to customers.

A collective action was launched today that accuses the company of setting punitive transaction fees for retailers from 1992 to 2008, which were passed on to shoppers in the shape of higher prices.

All UK consumers who used MasterCard credit cards, or even cash, cheque, or any other payment method, for their purchases during that period and are currently living in the UK will automatically become part of the claim. They will, therefore, potentially benefit from any payout - unless they explicitly opt out.

Consumers no longer living in the UK, but who were here between 1992 and 2008 will have the opportunity to opt in to the collective claim.

The claim, led by former financial services ombudsman Walter Merricks, and aided by US law firm Quinn Emanuel, was filed today at the Competition Appeal Tribunal in London under the Consumer Rights Act 2015.

[...] Any hearing on the case is not expected until early 2018, following a trial, unless MasterCard settle it out of court.

If the claim is successful, it could be up to two to three years before compensation is paid out and customers will have to make a claim within a set time period.

Walter Merricks added: 'It will be a simple process for consumers to get compensation without using claim management companies.' [....]"

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rated:
Thanks OP.
Looks like it affects me.

rated:
Thank you,

Good to know.

rated:
Here is some more information -- I have bolded some of it that caught my eye, and added it to the introductory post:

from the Daily Mail newspaper
8 September 2016

40 MILLION British credit card users could EACH receive a £450 windfall as MasterCard is taken to court over £14bn of ‘unfair charges’

"Around 40 million British credit card users could be handed £450 each as legal action has been taken against MasterCard over £14billion of 'unfair charges' to customers.

A collective action was launched today that accuses the company of setting punitive transaction fees for retailers from 1992 to 2008, which were passed on to shoppers in the shape of higher prices.

All UK consumers who used MasterCard credit cards, or even cash, cheque, or any other payment method, for their purchases during that period and are currently living in the UK will automatically become part of the claim. They will, therefore, potentially benefit from any payout - unless they explicitly opt out.

Consumers no longer living in the UK, but who were here between 1992 and 2008 will have the opportunity to opt in to the collective claim.

The claim, led by former financial services ombudsman Walter Merricks, and aided by US law firm Quinn Emanuel, was filed today at the Competition Appeal Tribunal in London under the Consumer Rights Act 2015.

[...] Any hearing on the case is not expected until early 2018, following a trial, unless MasterCard settle it out of court.

If the claim is successful, it could be up to two to three years before compensation is paid out and customers will have to make a claim within a set time period.

Walter Merricks added: 'It will be a simple process for consumers to get compensation without using claim management companies.' [....]"

from:  http://www.dailymail.co.uk/money/news/article-3779820/Shoppers-s... 

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