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Mastercard faces £19bn claim over card charges

MasterCard is facing a multi-billion pound damages claim that could reach £19bn for imposing allegedly illegal card charges.

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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 anti-competitive, high level and reach a settlement with the European Commission to lower its fees.

 

The individual bringing the claim, Walter Merricks CBE, believes that Mastercard did not accept this, and then imposed what he alleges were unlawfully high card fees for nearly 16 years. Mastercard says it firmly disagrees with the basis of the claim.

 

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

 

Merricks claimed that the fees were a significant cost for retailers and were then passed on through increased prices of goods and services. He added that all UK consumers, including cash purchasers – not just MasterCard holders – have lost money as a result.

 

Merricks claimed that 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 analysis using publicly available data, he calculates that the total damage caused to UK consumers may be many billions and as much as £19bn.

 

Merricks is a qualified lawyer and the former chief financial services ombudsman, a position he held for 10 years.


He said: “The prices of everything we all bought from 1992 to 2008 were higher than they should have been as a result of the unlawful conduct of MasterCard.

 

“Although most of us did not know this, experts who study the retail economy knew it was happening – and so did MasterCard. My aim is to get the redress to which UK consumers are entitled.”

 

Merricks has instructed leading litigation law firm Quinn Emanuel on the landmark case. Their team is being led by partners Boris Bronfentrinker and Kate Vernon.

 

Competition barristers Paul Harris QC of Monckton Chambers and Marie Demetriou QC of Brick Court Chambers have also been instructed.

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