Class action against Visa and Mastercard gets go-ahead

The Competition Appeal Tribunal (CAT) has given the go-ahead to a class action or ‘collective proceedings’ against Mastercard and Visa on behalf of travel and hospitality companies.

Specialist law firm Harcus Parker launched the proceedings more than two years ago seeking repayments by Mastercard and Visa for alleged overcharging on ‘multilateral interchange fees’ (MIFs) on corporate card payments, which form a large part of the merchant service charges that banks levy on card payments.

Businesses pay these fees to ‘acquirers’ – the banks processing card payments on their behalf – but the charges are set by Visa and Mastercard which, in turn, receive service fees from the banks.

Harcus Parker lawyers claim the fees are “anticompetitive and unlawful”.

The proceedings were ‘stayed’ by a CAT ruling a year ago that invited the claims lawyers to revise their proposals for the proceedings.

Harcus Parker competition litigation partner Jeremy Robinson hailed the ruling last week, which followed a hearing in April, saying: “This is excellent news for businesses in travel and hospitality.”

In a statement, Harcus Parker said: “We’re pleased this important claim will now proceed despite Mastercard and Visa’s attempts over the last two years to deny thousands of UK businesses a straightforward and effective route to justice.

“UK businesses in the travel and hospitality sectors have been particularly hurt by Mastercard’s and Visa’s commercial card multilateral interchange fees.”

More than 2,000 individual claims have been brought for repayment of the fees, about half of which have been settled. The outstanding claims have been grouped as ‘umbrella proceedings’, which were subject to a hearing in February – on which a ruling is awaited – and there will be a further trial in November.

In its ruling, the CAT invited lawyers bringing the collective proceedings to align with this.

Robinson said: “It’s expected we should dovetail our proceedings with the umbrella proceedings.” He insisted: “It’s a very positive ruling.”

Abta, The Advantage Travel Partnership, UKinbound, UKHospitality and the Tourism Alliance are among industry groups to have backed the claim, which is fully financed and insured so there is no risk to claimants.

Go to Source...