Visa and Mastercard face class action lawsuit served in London
Harcus Parker claims Visa and Mastercard forced banks to agree to 'anti-competitive and unlawful' fees
Harcus Parker, a UK-based commercial litigation law firm which specilaises in group litigation, competition litigation and class action lawsuits, has served a significant class action lawsuit against Visa and Mastercard.
The firm has brought the corporate card claim at the Competition Appeal Tribunal (CAT), the UK’s specialist judicial body for hearing competition cases on behalf of a large number of claimants seeking damages for allegedly unlawful charges. The case is financed by a third party litigation funder, Bench Walk Advisers, and is fully insured.
The class action seeks compensation for UK businesses, which were charged Multilateral Interchange Fees (MIFs) for accepting payments using corporate credit cards, and credit and debit cards from overseas visitors. The CAT has published the claim on its website.
Harcus Parker claims Visa and Mastercard forced banks to agree to a level of MIFs set by the two giants, which are “anti-competitive and unlawful”.
Jeremy Robinson, competition litigation partner at Harcus Parker, commented: “We want to make sure that businesses across the UK economy are properly compensated. We are making a stand against unlawful interchange fees, which should be abolished. Both the Court of Justice of the EU and the United Kingdom Supreme Court have condemned this practice for consumer credit and debit cards. The UK courts should now clamp down on commercial card and inter-regional fees.
“UK businesses in the travel, hospitality, retail and luxury sectors are particularly hurt by Mastercard and Visa’s multilateral interchange fees.”
MIFs make up the greater part of the service charges levied by banks on businesses when customers pay by card. Typically, for every £100 spent, up to £1.80 is charged on payments made by corporate cards, or cards used by overseas visitors – costs which are borne by UK companies.
Since 2015, EU law capped MIFs at 0.3 per cent on consumer credit card transactions, and 0.2 per cent for consumer debit cards. However, this cap did not apply to corporate credit and debit cards or for inter-regional transactions. These sales have continued to attract fees of up to 1.8 per cent per transaction.
Harcus Parker has accused Mastercard and Visa of requiring banks to charge anti-competitive MIFs on businesses. These MIFs for corporate and inter-regional payments should be zero per cent, say Harcus Parker.
The class action is open to all business, including large international companies and local businesses, as well as some non-UK companies. Many of these businesses, particularly in the travel and hospitality sectors but also the luxury sector too, have been particularly hard hit by the impact of Brexit and covid-19.
UK businesses with an annual pre-Covid turnover of £100m or more may opt-in to the claim. Businesses with a turnover under this threshold will be automatically included unless they choose to opt out.
The CAT is expected to hear the first round of the case in late 2022 or early 2023, when it will decide whether the case can be certified to go forwards to trial.