Visa and Mastercard were taken to court in the United States in a class action lawsuit that lasted 10 years and it’s finally come to an end. The two payment processing companies, which provide the infrastructure for other financial companies to facilitate electronic transactions, will be paying out millions in a settlement involving 17 years’ worth of ATM transactions.
However, there’s bad news for those who may have qualified but neglected to file a claim.
Visa and Mastercard are paying out a $197.5 million settlement to Americans
If you were charged a fee for using a Visa or Mastercard bank or credit card at a bank’s ATM not associated with either of the two at any time between October 1, 2017, and July 26, 2024, you may have qualified for a portion of a mighty $197.5 million settlement payout.
According to the official court-authorized settlement website, the deadline to submit a claim in the class action lawsuit was January 22, 2025. This means that anyone who qualified but didn’t claim in time has missed the boat and won’t be seeing any payout hitting their pockets.
The settlement brings the protracted lawsuit that accused two of the world’s largest card service companies of inflating surcharges at certain bank-operated ATMs between Oct. 1, 2007, and July 26, 2024, to an end.
Another issue affecting credit card holders is how customers are taxed on their rewards, and it’s advisable that you are aware so that you don’t have headaches in tax filing season.
What did Visa and Mastercard do wrong to be hit with a lawsuit?
Court records indicate that the lawsuit was initiated by a complaint filed in the US District Court in Washington, DC. Two cardholders claimed that extra ATM fees imposed by banks associated with Visa and Mastercard were not clearly disclosed. The fees, termed “surcharges,” are imposed when customers use ATMs not associated with their bank’s network.
Visa and Mastercard refused to admit guilt
Records show that millions of customers were affected with the figure estimated at between 175 million and 215 million. Visa has agreed to pay $10.4 million toward the settlement and Mastercard will fork out $92.8 million. Neither of the defendant parties admitted guilt and maintained they were innocent of the allegations. A judge ultimately declined to assign blame and accepted the terms. The settlement documentation states:
“The parties’ negotiations were hard-fought via protracted negotiations that occurred at multiple mediations over several years.”
The settlement explains that the amount of money each claimant will receive will depend on the number of claims submitted. Customers will likely be paid out via a digital option such as PayPal or a virtual debit card, but they also have the option of requesting a paper check to be mailed.
Visa and Mastercard have another settlement to pay out in 2025
Vias and Mastercard have another settlement to pay out over an antitrust lawsuit involving small businesses and merchant transactions. Merchants who accepted Visa and Mastercard payments between January 1, 2004, and January 25, 2019, may have been eligible for compensation from a class action settlement related to alleged violations of antitrust laws. The deadline to claim was February 4, 2025.
The lawsuit alleges that Visa and Mastercard, along with member banks, conspired to impose excessive fees on merchants for accepting branded cards. It revolves around the claim that Visa, Mastercard, and associated banks broke antitrust laws by artificially inflating merchants’ interchange fees (or “swipe fees”) for accepting their cards, which were charged each time a customer used a Mastercard or Visa debit or credit card.
The huge settlement amount is expected to be in the range of $5.5 billion and $6.2 billion and only applies to small business merchants who filed their claims in time.
In more news about class action lawsuits and settlements, Ford has been taken to court twice over its EcoBoost engines and it’s getting expensive.