The National Retail federation filed an appeal on Thursday asking a U.S. appeals court to overturn a major settlement related to credit card swipe fees.
“The settlement does nothing to reform the price-fixing payments system that has let credit card swipe fees skyrocket over the past decade and nothing to keep them from continuing to soar in the future,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Instead of lowering fees, the card industry’s settlement proposes that merchants pass them along to consumers in the form of surcharges. That is absolutely the opposite of what retailers sought, and major retailers have soundly rejected surcharging.”
Duncan said the retail industry did not agree to the settlement, adding that nine individual retailers “whose views are not representative of the collective industry” ultimately determine the settlement.
“A majority of the original plaintiffs in the case repudiated the settlement as soon as they saw its terms, the nation’s largest retailers have spoken out against it, and close to 8,000 retailers and merchants have formally rejected the proposal,” Duncan said. “This is an abuse of the class action system and should never have been approved.”
Last month, a U.S. district court approved the original $7.25 billion settlement stemming from a lawsuit filed by merchants that claimed Visa, MasterCard and banks conspired to set credit card interchange fees—the amount a bank or processor charges a merchant to process a credit transaction—unreasonably high.
“The only people pleased with this settlement are Visa and MasterCard, because it means they can continue collecting tens of billions of dollars in hidden fees, the class action lawyers who stand to collect half a billion dollars in fees without fixing the problem, and a lower court, which has cleared a time-consuming case off its docket, but has done a serious disservice to merchants and the public in the process,” Duncan said.