For 16 years the leading global payments company MasterCard has been imposing unlawfully high interchange fees for using its cards in shops, according to UK’s former financial services ombudsman Walter Merricks.
He is leading a court action which is expected to be filed soon under the Consumer Rights Act. The law which was introduced in 2015 allows for collective damages claims.
“The prices of everything we all bought from 1992 to 2008 were higher than they should have been as a result of the unlawful conduct of MasterCard. To be clear, there is no question that MasterCard acted illegally in the way it conducted its business, a business that affects all of us. All of us overpaid to the tune of up to £19 billion ($24.5 billion) during a period lasting 16 years,” Merricks said.
He added that “although most of us did not know this, experts who study the retail economy knew it was happening — and so did MasterCard.”
Merricks has already instructed US-based law firm Quinn Emanuel in an effort to seek redress to which UK consumers are entitled and to ensure MasterCard cannot hold on to the illegal profits it made.
"This case should send a signal to companies that break competition laws at the expense of UK consumers that they do so at their financial peril."
READ MORE: MasterCard sees huge potential in China
MasterCard said it “firmly disagrees” with the basis of the claim. “Electronic payments deliver real value to people online, in-store and everywhere,” said a company statement.
“MasterCard is committed to providing ever more convenient, safe and secure payments to all our customers, including consumers, retailers, governments and banks.”
The European Court of Justice ruled in 2014 that interchange fees which are charged to stores when shoppers swipe their debit or credit cards - were a violation of EU antitrust rules.
Last year, the European Parliament and the Council of the European Union adopted the Interchange Fee Regulation. The new rule caps fees at 0.2 percent for debit card transactions and 0.3 percent for credit cards.
Retail giant Wal-Mart said on Tuesday that starting from July 18, it will stop accepting Visa cards at some of its Canadian stores over "unacceptably high fees" for credit card transactions.
Two years ago the retailer announced it was suing Visa for $5 billion for excessively high card swipe fees between 2004 and 2012.