Millions of UK consumers set to receive up to £70 payouts after tribunal approves Mastercard settlement over unfairly charged transaction fees.
A tribunal has approved a settlement in a long-running lawsuit against Mastercard, which could see millions of consumers receive up to £70 each. The decision comes after nearly a decade of legal action, brought forward by a former financial ombudsman.
Mastercard is a multinational financial services corporation that provides payment solutions to consumers, businesses, and governments.
Founded in 1966 by a group of banks, it was initially called Interbank/MasterCharge.
The company's name was changed to Mastercard in 1979.
Today, Mastercard operates in over 150 countries, with a presence in more than 200 currencies.
Its services include credit cards, debit cards, prepaid cards, and online payment solutions.
The Background
Walter Merricks argued that shoppers were charged higher prices due to fees wrongly levied on transactions made between 1992 and 2008. These fees, known as ‘multilateral interchange fees,’ were paid by retailers accepting Mastercard payments, rather than by consumers themselves. Despite this, retailers passed on the costs to customers, resulting in overcharged prices for goods and services.
Eligibility for Compensation
Consumers can claim compensation if they lived in England, Wales, or Northern Ireland between June 1997 and June 2008, and bought goods or services from UK businesses that accepted Mastercard credit cards. For those living in Scotland, the starting point is May 1992. The entire settlement is worth £200m, with £100m set aside for consumers who need to claim by the end of this year.
How Much Will Consumers Get?
If 5% of eligible claimants come forward – approximately 2.5 million people – each will receive £45. However, if fewer people apply, payments will be capped at £70 per claimant. Unclaimed cash is expected to go to the company that funded the lawsuit.
A Fair Outcome for Consumers
Mr Merricks stated that he started this case because he believed Mastercard’s fees were unlawfully high. He argued that ‘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.‘ The approved settlement represents a fair and just outcome for UK consumers, according to Mr Merricks.
Next Steps
Consumers will soon be able to register to receive a payout by completing an online form. Once registered, they can expect to receive their compensation.
