Mastercard resists compound interest in $ 19 billion UK class action lawsuit
- Britain’s first mass consumption case awaits certification
- If successful, UK adults could pocket Â£ 300 each
- The UK Supreme Court dismissed objections to the case in December
- Mastercard says she fundamentally disagrees with the claim
LONDON, March 25 (Reuters) – Mastercard Inc (MA.N) on Thursday fended off attempts to add compound interest to a UK Â£ 14bn ($ 19.2bn) class action lawsuit in a hearing before a specialized tribunal to certify and agree on the scope of the historical case.
On the first day of a two-day hearing before the Competition Appeal Tribunal (CAT), an attorney for Mastercard said the common law does not presume interest would accrue on a compound basis on such claims. .
âThe law is not the same as economic theory,â he said.
“In most cases, simple interest will be perfectly adequate as a means of compensation.”
Former financial ombudsperson Walter Merricks, who is leading the complaint, alleges Mastercard overcharged nearly 60 million people in Britain – including around 14 million people now dead – over nearly 16 years. The case could entitle adults and their estates to around Â£ 300 each if successful.
Mastercard will set out its arguments on Friday on why the claims of the deceased should be excluded, after which the CAT must decide whether to certify Britain’s first mass consumer claim as class action – and clarify the rules for a series of other class actions stuck in its wake.
The UK Supreme Court paved the way for the case to continue after dismissing the objections in December. Read more
Merricks, who is advised by law firm Quinn Emanuel, alleges Mastercard charged excessive “interchange” fees – the fees retailers pay credit card companies when consumers use a card to make purchases – between May 1992 and June 2008 and that these costs were passed on to consumers as retailers increased their prices.
Mastercard says it “fundamentally disagrees” with the claim that people have gained valuable benefits from its payment technology and that the lawsuit is being led by US lawyers and supported by money-driven organizations for themselves.
The case was filed in 2016, a year after the CAT was appointed to oversee the UK’s US-style ‘opt-out’ class action regime for breaches of UK or EU competition law – and 12 years after that the European Commission ruled that Mastercard had illegally charged cross-border interchange fees over the period.
($ 1 = 0.7288 pounds)
Reporting by Kirstin Ridley; edited by Emelia Sithole-Matarise
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