Millions of Mastercard holders are set to receive compensation following the final approval of a £200 million settlement in a long-running class action lawsuit against the payment card giant.
The Competition Appeal Tribunal sanctioned the distribution plan on Tuesday, bringing a close to the case that began in 2016. It will see up to £70 given to millions of card holders.
The lawsuit, spearheaded by former financial ombudsman Walter Merricks, stemmed from a 2007 European Commission ruling. The Commission found that Mastercard’s “multilateral interchange fees,” levied on businesses for transactions between 1992 and 2008, violated competition law.
Mr Merricks argued that these fees were unfairly passed on to approximately 46 million British shoppers, effectively overcharging them for purchases made over a 15-year period. The settlement now paves the way for affected consumers to receive compensation.
The fees were paid by retailers accepting Mastercard payments, rather than by consumers themselves. But Mr Merricks claimed shoppers had lost out as retailers passed on these fees in the form of higher prices.
It followed the arrival of the Consumer Rights Act 2015, which allowed for US-style class actions in UK competition claims.
A statement from Mr Merricks said millions of UK consumers who are part of the class action could now come forward and claim their share of the £200 million, with individuals potentially getting between £45 and £70 each.
He said UK consumers would shortly be able to register to receive a payment by completing a simple online form, regardless of whether they ever held a Mastercard card.
It was expected that payments would be made to consumers who register before the end of the year, he added.
Commenting on the outcome, Mr Merricks said: “I started this case because I believed that Mastercard’s fees paid by retailers for processing card transactions had been unlawfully high and 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.
“As the evidence came to be known through the litigation process, this was the position only in a relatively small proportion of transactions and the settlement reflects that.
“The settlement that has today been finally approved represents a fair and just outcome for UK consumers.
“On any view, recovering £200 million by way of a settlement for UK consumers is a huge sum, and that will translate into a meaningful impact in the pockets of UK consumers.”
