The National Retail Federation asked a judge last week to “right or reject” a proposed settlement of a lawsuit related to credit card swipe fees, saying the current measure needs to be rewritten.
“The proposed settlement is next to worthless,” NRF Senior Vice President and General Counsel Mallory Duncan said. “It does nothing to reduce swipe fees or keep them from rising in the future, it offers retailers pennies on the dollar for the damage that has already been done, and it tries to tie merchants’ hands from ever suing again. This is actually worse than no settlement at all because it further entrenches the monopoly held by the card companies.”
Duncan also said the proposal has not been agreed to “by any stretch of the imagination.”
“This is a backroom deal being pushed by the card industry and trial lawyers more concerned about their fees than protecting retailers or consumers,” Duncan said.
NRF attorney Andrew Celli told the judge that retailers should have the ability to completely opt out of the settlement.
“As it stands, the settlement rewards the perpetrators and traps the victims,” Celli said. “But it is not hopeless. It can be made fair. You have the power to make it so.”
Approximately 25 percent of Visa and MasterCard’s volume—nearly 8,000 merchants—have opted out of the $7.25 billion settlement, which allows retailers the ability to surcharge, provides them with compensation and temporarily reduces swipe fees.
In a brief filed earlier this year, the NRF said the proposal does not protect retailers from future rate hikes by Visa and MasterCard and essentially eliminates their ability to challenge rates and rules in the future.