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Mastercard Interchange Fees Class Action Lawsuit Overview:
- Who: Walter Merricks filed a class action lawsuit against Mastercard.
- Why: Merricks claims interchange fees charged by Mastercard were unlawfully passed on to consumers by retailers.
- Where: The class action lawsuit was certified in August by the Competition Appeal Tribunal.
A former financial ombudsman will be allowed to file a £10 billion class action lawsuit against Mastercard on behalf of around 46 million consumers, following a reversal of course by the Competition Appeal Tribunal (CAT).
Plaintiff Walter Merricks claims interchange fees Mastercard charged to retailers were often passed onto consumers, who subsequently had to pay higher prices in violation of EU competition law, reports Financial Times.
Merricks’ class action lawsuit is the largest in the history of the UK and the first under the Consumer Rights Act 2015, meant to compensate and protect consumers and small businesses from anti-competitive practices.
“It’s a pioneering initiative,” Merricks said of his complaint. “We were committed to do this because of the change in legislation in 2015.”
The complaint is also the first opt out class action lawsuit in the history of the UK. Most class action lawsuits in the country require consumers to opt in to participate, while Merricks’ will opt Class Members in automatically.
Merricks called opt out cases a “novelty,” noting his class action lawsuit is much larger than others, which often revolve around smaller sectoral issues.
“I think that many people in the consumer world have been long advocating for the possibility of consumer class actions,” Merricks said.
The CAT had previously declined to certify Merricks’ class action lawsuit in 2017, however, the Supreme Court ruled in December that the tribunal had erred in disallowing the complaint, and asked it to rethink its stance.
Merricks said that, while the class action lawsuit has taken a while to go through the courts, the recent approval is a “very exciting development.”
“It’s been a rollercoaster ride and it’s taken a long time to get back to where it should have been in the first place,” Merricks said.
Mastercard’s Interchange Fees Breached Competition Law, Class Action Lawsuit Claims
The claims against Mastercard stem back to a 2007 ruling by the European Commission, which found the interchange fees the financial services company charged for transactions using its debit and credit cards breached competition law.
Merricks said he is now trying to show that elements of those fees were unlawfully transferred onto consumers, who ended up having to pay more than they should have.
“I am breaking such new ground in this and I am encountering issues that have not been encountered before,” Merricks, the former financial ombudsman, said. “I am very conscious that I need to get this right and get the approach to it right and get the strategy right.”
Merricks’ class action lawsuit seeks to represent any individuals aged 16 or older who purchased a good or service from a UK business which accepted Mastercard anytime between 1992 and 2008.
“I feel both very excited but also aware of the responsibility on my shoulders,” Merricks said. “ I am representing a very large class of 46 million consumers, that’s pretty much the adult population.”
The class action lawsuit originally called for an estimated £14 billion in compensation, however, while certifying the complaint, the CAT dismissed claims for compound interest and those made on behalf of consumers who passed away between 1992 and 2008, reports Financial Times.
Merricks’ called the CAT’s decision “disappointing,” but said the tribunal left open the possibility for his team to be able to include claims on behalf of consumers who die or have died since he originally filed the complaint.
“I think that’s an important aspect because I do anticipate that this litigation will go on for some while,” Merricks said. “And it’s important therefore that those who pass away between now and its conclusion are not excluded just by the fact that sadly they pass away.”
Were you charged more for a product or service when using a Mastercard debit or credit card? Let us know in the comments!
The plaintiff is represented by Marie Demetriou QC and Victoria Wakefield QC of Brick Court Chambers, instructed by Quinn Emanuel Urquhart & Sullivan LLP.
The Mastercard Interchange Fee Class Action Lawsuit is Walter Hugh Merricks v. Mastercard Inc., et al., Case No. 1266/7/7/16, in the Competition Appeal Tribunal.
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