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MasterCard faces £19 billion lawsuit over illegal card fees

Staff Writer | July 9, 2016
MasterCard is facing a multi-billion pound damages claim that could reach £19 billion for imposing illegal card charges that were ultimately borne by UK consumers.
Walter Merricks
Illegal charges   The biggest claim in UK legal history
The claim, the biggest in UK legal history, will be one of the first to be filed under the Consumer Rights Act 2015. The Act enables a collective damages claim to be brought on behalf of a class of people who’ve suffered loss.

MasterCard was found, following a long-running legal battle with the European Commission that ended in 2014, to have infringed EU law by imposing charges (known as ‘interchange’ fees) on the use of MasterCard debit and credit cards.

MasterCard had the option to accept that its card fees were set at an anticompetitive, high level and reach a settlement with the European Commission to lower its fees.

It chose not to do that and instead imposed unlawfully high card fees for nearly 16 years and engaged in a legal battle for nearly 10 years.

MasterCard lost this battle at every level and showed complete disregard for its cardholders and consumers at large, focusing instead on generating unlawful profits.

Consumers 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 - not just MasterCard holders - have lost money as a result.

Because MasterCard’s fees have already been found to be illegal by the Commission, this ‘follow-on’ claim need only prove the damage consumers suffered as a result of MasterCard’s anticompetitive behaviour.

Based on expert analysis using publicly available data, the total damage caused to UK consumers may be many billions and as much as £19 billion. This will equate to hundreds of pounds in damages for every single UK consumer.

The claim is being brought as class representative by Walter Merricks CBE, as representative of the class of UK consumers that have suffered loss.

Merricks is a qualified lawyer and the former Chief Financial Services Ombudsman, a position he held for 10 years.