MasterCard sued for £14 billion damages in UK tribunal
Credit card major MasterCard is facing a lawsuit filed on Thursday seeking £14 billion in damages - the largest legal claim in British history - over allegations it overcharged 46 million consumers in the UK.business Updated: Sep 09, 2016 21:42 IST
Credit card major MasterCard is facing a lawsuit filed on Thursday seeking £14 billion in damages - the largest legal claim in British history - over allegations it overcharged 46 million consumers in the UK.
MasterCard said it would oppose the lawsuit vigorously. Filed by law firm Quinn Emanuel in the Competition Appeal Tribunal, the lawsuit relates to fees imposed by MasterCard on businesses that accepted its debit and credit cards between 1992 and 2008.
According to Quinn Emanuel, the fees – known as ‘interchange fees’ – were set at an unlawfully high level and pushed up prices for British consumers. The claim was brought by Walter Merricks, the UK’s former chief financial services ombudsman.
It is the first claim to be filed under the Consumer Rights Act 2015 on behalf of all UK consumers. The Act enables a collective damages claim to be brought on behalf of a class of people who have suffered loss, the law firm said in a statement.
“MasterCard had the option to accept that its card fees were set at an unlawfully high level and reach a settlement with the European Commission to lower its fees. It chose not to do that and instead imposed these unlawfully high card fees for nearly 16 years whilst it engaged in a decade-long legal battle with the Commission. MasterCard lost this battle at every level and showed complete disregard for its cardholders and consumers at large, focusing instead on generating unlawful profits”, Quinn Emanuel said.
Consumers, it said, were unaware of the level of these fees or that they were illegal. The fees were a significant cost for retailers that was then passed on through increased prices of goods and services. All UK consumers, including cash purchasers – and not just MasterCard holders – had lost money as a result, it added.