A lawsuit initiated in 2005, alleging that retailers were charged excessive fees for accepting Mastercard and Visa credit cards, has concluded with a settlement. The Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, a significant legal dispute in the United States, has reached a resolution with a $5.54 billion settlement concerning MasterCard, Visa, and other institutions involved. To Submit a Claim, the deadline to submit the filing is set for August 30, 2024. Here is an explanation about the payment card interchange fee settlement amounts and payouts for merchants.
Understanding the Payment Card Interchange Fee Settlement Amounts and Payouts
The funds from the Mastercard and Visa class action lawsuit available to your business hinge on various factors, notably the interchange fees paid by your business between January 1, 2004, and January 25, 2019. The class action has reserved roughly $5.5 billion for settlements, although this sum will decrease once legal and administrative expenses and allocations for businesses that withdrew from the compensation are deducted. The plaintiffs’ attorneys stated that Mastercard and Visa consented to cover up to $170 million in legal fees and expenses.
To be eligible for a payout, your business must have handled Visa or Mastercard transactions during the aforementioned dates and must not have opted out of the settlement by July 23, 2019. Claim forms were sent to identified class members; however, if you did not receive a form, you can begin the claim process by submitting your Taxpayer Identification Number (TIN) on the official Payment Card Settlement website.
The amount of money each business receives will be proportional to the interchange fees it paid during the eligible time frame relative to the sum of all valid claims submitted. Payment distribution is anticipated to start after May 31, 2024, the claim submission deadline, subject to court endorsement and the settling of any challenges. These payments’ precise schedule and size will be determined based on the number of claimants and the finalization of claim processing.
Eligibility for the Visa Mastercard Settlement Claim
Businesses or merchants that have conducted transactions using Mastercard and Visa in the United States between January 1, 2004, and January 25, 2019, are eligible to receive payments from the settlement. Those who incurred interchange fees during this period qualify to claim their portion of the settlement funds. Recipients of the notices sent on December 23 and January 24 can submit their claims using the provided form.
Claims can be filed online using the secure website by 11:59 PM PST on August 30, 2024.
How Are Individual Claim Amounts Determined?
The Claims Administrator utilizes data supplied by the Defendants to calculate the approximate total of interchange fees paid by each eligible claimant. If the data is unavailable or if you, as a claimant, contest the estimated value of your claim, you are required to submit an estimate of the total amount of Mastercard and Visa interchange fees you incurred during the qualifying period.
Merchants who processed a greater number of transactions received a bigger percentage of the compensation funds. The distribution of the settlement fund to qualified merchants was carried out on a proportional basis, which involved assessing the total amount of Mastercard and Visa transactions processed by all involved merchants. The proportion of each merchant’s settlement was then allocated based on their share of transactions compared to the aggregate volume submitted by all claimants during the claim filing process.
Additionally, if the Claims Administrator cannot validate your claim, you may be required to submit supporting documentation to substantiate your claim.
The process for determining the exact individual claim amounts in the settlement involves a series of calculations based on the total Visa/Mastercard sales and the applicable interchange fee rates over a specified period.
For example, let’s consider a scenario where the total Visa/Mastercard sales from 2004 to 2019 amounted to $200,000,000. By applying a blended interchange fee rate of 1% to these sales, the total interchange fees would be $2,000,000. If every eligible claimant files a claim, a multiplier of 1% is applied to this figure. Consequently, the estimated payout for an individual claim would be roughly $20,000.
*This method is just a simplified method of complex calculations and may not be wholly correct and can be different from the original amount you receive.
When Can I Expect to Be Paid?
When submitting a claim, it’s important to note the expected payout date. Payments are not anticipated to begin until after the Claims Period ends on August 30, 2024.
The pro rata distribution can only be determined once the court submits, reviews, and fully approves all claims. Currently, no specific information regarding the payment schedule is available.
According to the claims administrator, the exact date for the disbursement of funds will be determined only after all claims have been submitted and reviewed and the settlement amounts processed into each claimant’s account. The claims period for the Mastercard and Visa settlement is currently active. If you are eligible for a settlement payment, submitting your claim promptly before the deadline is crucial.
It is recommended to remain patient, as this process could take 18 to 24 months or longer. However, through our partnership with Certificate Clearing, HMS offers a solution to monetize your claim immediately if you possess the necessary supporting documents.
How Host Merchant Services Can Help You?
Merchants looking to file claims for the Mastercard and Visa settlement can do so directly through the claims administrator or opt for the services of third-party claim service providers like HMS. HMS has partnered with Certificate Clearing Corporation as these providers bring over 30 years of experience in claim filing and monetization, ensuring that the process is more straightforward, smarter, and faster.
Host Merchant Services and CCC excel in several key areas. They can locate your claim information even if you have not received a notice from the claims administrator. They are also skilled in estimating the value of your claim and can enhance it if the data from Visa or Mastercard needs to be corrected or completed. Additionally, they handle the entire filing process and keep you updated on the status of your claim.
One of the standout features offered by HMS and CCC is the option to purchase your claim for immediate cash. This means you do not have to wait the typical five-plus years to receive your settlement payment, providing a significant advantage for merchants needing prompt financial relief.
Conclusion
The Payment Card Interchange Fee and Merchant Discount Antitrust Litigation settlement represent a significant milestone in rectifying alleged excessive fees imposed on retailers by Mastercard and Visa. With a substantial $5.54 billion settlement reached, businesses can claim their share of the funds by submitting their claims before the August 30, 2024 deadline.
While the exact payout for each claimant will depend on various factors, including the interchange fees paid and the total number of valid claims, the process aims to provide fair compensation proportional to each business’s contribution. Furthermore, third-party service providers like HMS assist in navigating the claim process, providing expertise and the option for immediate cash relief, ensuring a smoother and faster resolution for eligible merchants.
Frequently Asked Questions
How much is the total settlement amount?
The settlement fund totals about $5.54 billion and is aimed at compensating eligible merchants affected by alleged fee inflation from Visa, Mastercard, and associated banks.
What determines the amount each claimant receives?
Each merchant’s payout depends on the total valid claims and interchange fees paid during the eligible period, calculated pro-rata for equitable distribution.
What is the deadline for submitting a claim?
The deadline for claims submission is currently August 30, 2024. Potential claimants must submit their forms by this date to qualify for compensation.
Can I get help with my claim submission?
Yes, Host Merchant Services has partnered with Certificate Clearing Corporation to assist merchants with claim submission and manage the process for potential recovery. While they may charge a contingency fee, claimants can submit their claims directly at no additional cost through the official settlement website.
