The case for a £1.5-billion travel and hospitality class action lawsuit against Visa and Mastercard will be heard in April next year.
The claim to the Competition Appeal Tribunal (CAT) will be set out at a certification hearing on April 3-5. This will decide whether the claim can proceed to trial, which would likely be held in stages in 2024 and 2025.
Specialist law firm Harcus Parker has brought the claim for repayment of ‘multilateral interchange fees’ (MIFs) charged by Visa and Mastercard on corporate card transactions and card payments by overseas visitors.
The fees, paid to banks but set by Visa and Mastercard, make up most of the merchant service charges (MSCs) banks levy on card payments. Visa and Mastercard, in turn, receive ‘scheme fees’ from the banks.
Harcus Parker will argue Visa and Mastercard forced banks to agree to a level of MIFs which are “anti-competitive and unlawful”.
It believes the claim on behalf of travel and hospitality businesses alone could exceed £1.5 billion.
Abta, the Advantage Travel Partnership, inbound association UKinbound, hospitality association UKHospitality, and industry lobby group the Tourism Alliance have backed the claim since it was first announced in April this year.
Jeremy Robinson, Harcus Parker competition litigation partner, said: “We’re making a stand against unlawful interchange fees, which should be abolished.
“Both the UK Supreme Court and the Court of Justice of the EU have condemned this practice for consumer cards. The UK courts should now clamp down on commercial card fees and consumer card inter-regional fees.”
He argued: “We want to ensure businesses across the UK are properly compensated. Businesses in the travel, hospitality, retail and luxury sectors are particularly hurt by Mastercard and Visa’s fees.”
Typically, a multilateral interchange fee of up to £1.80 is charged on every £100 spent on corporate cards or cards used by overseas visitors.
The EU capped MIFs at 0.3% on consumer credit card transactions and 0.2% on debit cards in 2015. However, the cap did not extend to corporate cards or inter-regional card transactions which continue to attract fees of up to 1.8% per transaction.
Harcus Parker argues the fees should be zero and says the class action is open to all businesses, including large international companies.
The case is financed by a third-party litigation funder, Bench Walk Advisers, and is fully insured.
UK businesses are invited to register interest online at commercialcardclaim.co.uk.
Those with an annual pre-Covid turnover of £100 million or more should opt into the claim. Businesses with a lower turnover which register online will be automatically included unless they opt out.
For more information visit: commercialcardclaim.co.uk