A UK court has approved an over £10 billion ($14 billion) class action suit against financial services corporation Mastercard for overcharging fees to millions of British consumers using their credit cards for payments.
Britain’s first mass consumer class action suit with 46 million claimants was brought by former financial ombudsman Walter Merricks to the Competition Appeal Tribunal (CAT), which formally approved it to proceed to trial on Wednesday.
The case will be probed under the Consumer Rights Act 2015, which entitles claimants, both consumers and small businesses, to compensation for Mastercard’s alleged anti-competitive behavior.
“Mastercard has thrown everything at trying to prevent this claim going forward, but today its efforts have failed,” Merricks said in a statement on Wednesday.
Merricks alleges that the global payments system charged unreasonably high interchange fees between May 1992 and June 2008, which resulted in higher prices for consumers and violated EU competition laws. The fees in question are paid by retailers to card-issuing companies when consumers use their cards to shop. The class action suit has been brought on behalf of all individuals over 16 years of age who bought goods and services from UK businesses via Mastercard in the specified period.
The CAT has not, however, included Merrick’s claim for compound interest and claims from the estates of consumers who died between 1992 and 2008 in the case. According to Mastercard, this reduced the claim’s size to around £10 billion from the initial £15 billion. The company is hopeful that further proceedings will cut the overall claim even more.
“The decision reduces the value of this spurious claim by more than 35%. 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 said in a statement.
Merricks said the CAT 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.”
No date has been set for the trial yet. Previously, the European Commission ruled that Mastercard interchange fees violated the EU’s competition law in 2007.
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