A £200 million settlement in a lengthy class action lawsuit against the payment card company has been approved, and millions of Mastercard holders will soon get compensation.
Beginning in 2016, the lawsuit came to an end on Tuesday when the Compensation Appeal Tribunal approved the distribution plan. It will reward millions of cardholders up to £70.
The case, led by former financial ombudsman Walter Merricks, was based on a European Commission decision from 2007.
The Commission concluded that “multilateral interchange fees,” which MasterCard charged companies for transactions from 1992 to 2008, were illegal under competition law.
Mr. Merricks contended that over 46 million British consumers were unjustly charged more for transactions made during 15 years as a result of these surcharges
Compensation for impacted consumers is now possible thanks to the deal. Instead of customers, the fees were covered by merchants who took Mastercard payments.
However, Mr. Merricks argued that because retailers passed these taxes on to customers in the form of higher prices, consumers had suffered.
It came after the Consumer Rights Act of 2015, which made it possible for UK competition claims to use class actions similar to those in the US.
Millions of UK consumers involved in the class action could now come forward and collect their portion of the £200 million, with each person possibly receiving between £45 and £70, according to a statement from Mr. Merricks.
He stated that regardless of whether they have ever used a Mastercard or not, UK consumers would soon be able to register to receive s payment by filling out a straightforward online form.
He stated that it was anticipated that customers who registered before the year’s end would receive their money.
Regarding the result, Mr. Merricks stated: “I started this case because I believed that MasterCard’s fees paid by retailers for processing card transactions had been unlawfully high and virtually all UK consumers had lost out for long periods by paying higher prices than they should have done as retailers passed on those costs.
“All the evidence came to be known through the litigation process, this was the position only in a relatively small proportion of transactions, and the settlement reflects that.
“The settlement that has today been finally approved represents a fair and just outcome for UK consumers.
“On any view, recovering £200 million by way of a settlement for UK consumers is a huge sum, and that will translate into a meaningful impact in the pockets of UK consumers.”
