UK consumers are preparing a £19bn (€22.5bn) class action lawsuit against MasterCard, almost two years after an EU court ruled the processing fees the company charged for cross-border transactions were unfair.
Walter Merricks, a lawyer who once led the UK organisation handling consumer disputes with banks, has hired Quinn Emanuel Urquhart and Sullivan to draft a lawsuit they plan to file by September, he said.
The claim would be the UK’s biggest and one of the first filed under the Consumer Rights Act 2015.
MasterCard has faced numerous lawsuits since EU courts said the company’s fees for cross-border payments unfairly restricted competition.
The firm had said that a cap imposed by the Commission on what it charged retailers to process transactions on foreign cards would shift the burden onto consumers, an argument the Court of Justice rejected.
The underlying antitrust investigation into the fees is ongoing and the company said in October that it risks “substantial” fines in the matter.
“The prices of everything we all bought from 1992 to 2008 were higher than they should have been as a result of the unlawful conduct of MasterCard,” Mr Merricks, the lead claimant, said.
“My aim is to get the redress to which UK consumers are entitled and to ensure that MasterCard cannot hold on to the illegal profits,” he said.
MasterCard disputed Mr Merricks’s claim, saying “electronic payments deliver real value to people online, in-store and everywhere.”
It’s too early to determine potential losses for MasterCard, Keefe, Bruyette & Woods analyst Sanjay Sakhrani said in a report to clients yesterday, noting the payments firm generates about $4bn (€3.6bn) a year in cash.
“As with most litigation, we expect this to be a drawn-out process, which is ultimately likely to create some level of overhang,” he wrote.
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