Credit Card Settlement Could Send Thousands Your WayJuly 15th, 2013 | Category: Industry News
If you’ve accepted MasterCard and Visa payments from consumers within the past nine years, you may have some money coming your way. Notice of a settlement was recently filed in the amount of $7.25 billion with merchants who have accepted MasterCard and Visa payments since 2004.
According to David Cherney, vice president of Digital Financial Group (DFG), a merchant service group in Carson City, Nev., the suit was filed in 2006 and has had more than 50 million pages of documents and 400 witnesses to date.
“Basically [MasterCard/Visa was] violating anti-trust laws, which you would call price fixing,” says Cherney. “I have made my living in the merchant service industry so indirectly Visa and MasterCard put my kids through college … but I have no problem in being candid that what they’re being accused of, I’ve seen it. They wouldn’t be agreeing to a $7 billion settlement if there wasn’t.”
The class action settlement authorized by the U.S. District Court for the Eastern District of New York, represents two separate classes in the settlement. Members qualifying in the first class, “which includes all persons, businesses, and other entities that accepted any Visa or MasterCard cards in the U.S. at any time from January 1, 2004, to November 28, 2012,” according to a notice, will see $6.05 billion given in cash refunds and the second class, according to the notice, “which includes all persons, businesses, and entities that as of November 28, 2012, or in the future accept any Visa or MasterCard cards in the U.S.,” will see a ten basis-point reduction in interchange rates for 8 months which is equivalent to a $10 savings for every $10,000 processed.
Cherney says, “An article from the April 22 Green Sheet says industry experts may receive from the first fund anywhere from $400 to $600 for every $100,000 spent” in Visa/MasterCard purchases.
Merchants can determine a rough estimate of the settlement amount they may receive by multiplying the average monthly Visa/MasterCard volume by 12 (the number of months in a year), then multiplying that figure by nine (the number of years eligible in the settlement). Divide that figure by $100,000 then multiply by $400 to see a conservative estimate of the potential amount your company could receive.
A fairness hearing has been scheduled for 10 a.m. September 12, 2013, at the courthouse for the United States District Court for the Eastern District of New York.
“After the hearing, a claim form will be submitted to the court for approval and a claim deadline will then be set … Big box stores are currently contesting the $7.25 billion figure; the final amount, which could increase or decrease, will be finalized at the September hearing,” says Cherney.
“Until this hearing, when the final [amount] is decided, unless you’re going to opt out of the settlement there is nothing you need to do at this point,” he adds. “After the hearing, claim forms will be available.”
Interested merchants can receive more information on the settlement and potential claims here.