A class action against the global payments processor Mastercard was approved by a London court whose claim is more than 10 billion pounds ($14 billion-plus). 46 million British adults could be the claimants in the case with each of them potentially receiving about 300 pounds each if the case is won by them.
This is the first mass consumer class action of Britain and analysts had been expecting the case to be certified by the Competition Appeal Tribunal (CAT) of the country. The class action was filed by former financial ombudsman Walter Merricks following overruling of objections to the action by the UK Supreme Court in December last year.
A benchmark for a series of other proposed class actions, that have been put on hold because of the class action against Mastercard, will be set up by the decision to finally authorize the five-year case as a collective action.
"Mastercard has thrown everything at trying to prevent this claim going forward, but today its efforts have failed," Merricks said in a statement.
"The tribunal's ruling heralds the start of an era of consumer-focused class actions which will help to hold big business to account in areas that really matter."
Lawyers were driving the "spurious" claim while it is being supported by organizations "primarily focused on making money for themselves", Mastercard said reacting to the latest development in the class action appeal.
Excessive "interchange" fees had been charged by Mastercard, Merricks alleges in the case appeal. The fees are related to the money that retailers have to pay credit card companies when such cards are used by consumers to purchase products or services. The incidents highlighted in the class action are from between May 1992 and June 2008. The case alleges that the fees collected from the retailers are passed on to consumers with raised prices.
However, attempts at expansion of the scope of the case by Merricks were unsuccessful. Merricks wanted to add onto the case the deceased customers as well as compound interest to be paid by the payments company.
This failure helped to reduce the size of claims to about 10 billion pounds, Mastercard said. The claimants had attempted to set the amount at 15 billion pounds.
"The decision today reduces the value of this spurious claim by more than 35%," Mastercard said in a statement. "Mastercard is confident that over the coming months a review of key facts will further significantly reduce the size and viability of the claim," the company added.
(Source:www.economictimes.com)
This is the first mass consumer class action of Britain and analysts had been expecting the case to be certified by the Competition Appeal Tribunal (CAT) of the country. The class action was filed by former financial ombudsman Walter Merricks following overruling of objections to the action by the UK Supreme Court in December last year.
A benchmark for a series of other proposed class actions, that have been put on hold because of the class action against Mastercard, will be set up by the decision to finally authorize the five-year case as a collective action.
"Mastercard has thrown everything at trying to prevent this claim going forward, but today its efforts have failed," Merricks said in a statement.
"The tribunal's ruling heralds the start of an era of consumer-focused class actions which will help to hold big business to account in areas that really matter."
Lawyers were driving the "spurious" claim while it is being supported by organizations "primarily focused on making money for themselves", Mastercard said reacting to the latest development in the class action appeal.
Excessive "interchange" fees had been charged by Mastercard, Merricks alleges in the case appeal. The fees are related to the money that retailers have to pay credit card companies when such cards are used by consumers to purchase products or services. The incidents highlighted in the class action are from between May 1992 and June 2008. The case alleges that the fees collected from the retailers are passed on to consumers with raised prices.
However, attempts at expansion of the scope of the case by Merricks were unsuccessful. Merricks wanted to add onto the case the deceased customers as well as compound interest to be paid by the payments company.
This failure helped to reduce the size of claims to about 10 billion pounds, Mastercard said. The claimants had attempted to set the amount at 15 billion pounds.
"The decision today reduces the value of this spurious claim by more than 35%," Mastercard said in a statement. "Mastercard is confident that over the coming months a review of key facts will further significantly reduce the size and viability of the claim," the company added.
(Source:www.economictimes.com)