MasterCard Sued for $18.6B on Behalf of 46M People

The lawsuit alleges it charged excessive fees
By Michael Harthorne,  Newser Staff
Posted Sep 9, 2016 5:19 PM CDT
MasterCard Sued for $18.6B Over Excessive Fees
Britain's former financial services watchdog is suing MasterCard for $18.6 billion, alleging the firm slapped excessive charges on millions of transactions.   (AP Photo/Alastair Grant)

(Newser) – Approximately 46 million people in Britain could one day be $400 richer thanks to a massive $18.6 billion lawsuit filed Thursday against MasterCard, CNN reports. It's one of Britain's first class action lawsuits. Walter Merricks, the former head of Britain's Financial Ombudsman Service who filed the lawsuit, alleges MasterCard was charging stores too-high fees when customers used their credit cards between 1992 and 2008. According to Reuters, the lawsuit claims the stores would then pass those fees on to customers—and not just MasterCard users—in the form of higher prices. Merricks calls it "almost an invisible tax" and says MasterCard "behaved disgracefully."

The lawsuit alleges MasterCard charged stores transaction fees of more than 1%. In comparison, the EU recently capped fees at 0.2% for debit cards and 0.3% for credit cards. The lawsuit is seeking damages for anyone who bought anything at a store during that 16-year period, no matter how they paid. And those estimated 46 million people will all be claimants in the lawsuit unless they specifically opt out. That works out to about $400 a person. MasterCard denies it did anything wrong and plans to fight the lawsuit. The AP reports there's currently a similar lawsuit seeking $6 billion from MasterCard and Visa working its way through the appeals process in the US. (Read more MasterCard stories.)

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