All About Mastercard Lawsuits

As one of the longest running antitrust lawsuits involving the credit card payment industry, both Visa and Mastercard faced a class certification request in 2015 that reignited charges the two credit card processing companies conspired to rig ATM fee prices. The new class certification request comes four years after the initial class action lawsuit stalled in a civil court. 

The National ATM Council Inc. and 13 independent sales organizations filed the first class action lawsuit in 2011. Class certification in 2015 has landed the class action lawsuit in the United States District court in Washington, D.C. Mastercard faces restraint of trade charges that are covered by the federal antitrust provisions written into the landmark Sherman Act. Jonathan L. Rubin, who represented Mogin Rubin LLP during the initial class action lawsuit, said in an interview the plaintiffs sought “hundreds of millions” in monetary damages.

Expect the court to rule on the new class action lawsuit sometime in late 2020. The ruling was expected to be handed down in early 2020, but because of the Covid-19 outbreak, the judge presiding over the case has pushed the hearings back a few months.

On November 27, 2012, a federal judge presiding over a United States District Court granted preliminary approval of a proposed settlement for a class action lawsuit filed by merchants and trade associations against Visa and Mastercard back in 2005. The class action lawsuit claimed the two credit card processing corporations fixed prices on the swipe fees charged to businesses that pay for the privilege of honoring Mastercard and Visa credit card payments. In addition, the merchants and trade associations joined in the class action lawsuit alleged both credit card companies prevented businesses from suggesting to customers that they use a less expensive form of payment, such as cash, checks, or lower fee credit cards. 

Although the initial settlement was for $6.24 billion, the presiding judge amended the initial settlement in November of 2019 to $5.54 billion. The class action lawsuit settlement created the following class: “All persons, businesses, and other entities that have accepted any Visa-Branded Cards and/or Mastercard-Branded Cards in the United States at any time from January 1, 2004 to January 25, 2019, except that the Rule 23(b)(3) Settlement Class shall not include (a) the Dismissed Plaintiffs, (b) the United States government, (c) the named Defendants in this Action or their directors, officers, or members of their families, or (d) financial institutions that have issued Visa-Branded Cards or Mastercard-Branded Cards or acquired Visa-Branded Card transactions or Mastercard- Branded Card transactions at any time from January 1, 2004 to January 25, 2019. The Dismissed Plaintiffs are plaintiffs that previously settled and dismissed their own lawsuit against a Defendant, and entities related to those plaintiffs. If you are uncertain about whether you may be a Dismissed Plaintiff, you should call 1-800-625-6440 or view the list of Dismissed Plaintiffs for more information.”

Not many companies have faced more antitrust lawsuits than the number of antitrust lawsuits litigated by Mastercard. During the late 1980s and early 1990s, Mastercard and Visa were found guilty of engaging of exclusion against American Express. At the time, American Express offered the only non-revolving credit card plan, which put Visa and Mastercard at a competitive disadvantage.

In 1996, more than four million businesses formed a class action lawsuit against Mastercard alleging the credit card processing corporation forced merchants to accept its newly introduced debit card. Merchants that did not accept the new Mastercard debit card experienced a sharp increase in swipe fees. In 2003, a United States District Court judge awarded the plaintiffs a multi-billion dollar settlement, which at the time was the largest class action lawsuit payout for an antitrust case in American history.

In 1998, the United States Department of Justice sued Mastercard for conducting business with Discover and American Express. Federal law strictly prohibits credit card processing companies from forming business alliances. The Department of Justice won its antitrust case in 2001, with the verdict withstanding an appeal filed by Mastercard. In Florida, the Attorney General sued Mastercard in 2001 for violating the Florida Deceptive and Unfair Trade Practices Act. Three years later, Mastercard agreed to an antitrust lawsuit payment to American Express for nearly $2 billion.

Credit card processing companies such as Mastercard have earned the reputation for violating the groundbreaking Telephone Consumer Protection Act (TCPA). Passed by the United States Congress in 1991, the TCPA prohibits companies from trying to generate business by making repeated telemarketing calls at odd hours of the day. The TCPA also bans the long standing practice of using automatic telephone dialing systems to leave telemarketing messages. Because of the highly competitive nature of the credit card processing industry, companies like Mastercard continued to push consumers aggressively by leaving automated telephone sales messages.

In 2012, the Federal Communications Commission revised TCPA regulations by requiring companies “to obtain prior express written consent from consumers before robocalling them, to no longer allow telemarketers to use an established business relationship to avoid getting consent from consumers when their home phones, and to require telemarketers to provide an automated, interactive “opt-out” mechanism during each robocall so consumers can immediately tell the telemarketer to stop calling.” Government regulators have conducted several investigations to determine whether credit card processing companies such as Mastercard have implemented guidelines that comply with the 2012 regulations.