Retailers Appeal 'Flawed' Credit Card Swipe Fee Settlement
The National Retail Federation (NRF) has formally filed an appeal of a controversial antitrust lawsuit settlement covering credit card swipe fees, asking the 2nd U.S. Circuit Court of Appeals to overturn a lower court's ruling.
Last month, a federal judge approved the settlement between retailers and card giants Visa Inc. and MasterCard Inc. Retailers had accused the card companies of conspiring to fix transaction fees charged to stores for handling credit card payments.
NRF calls the settlement a flawed "abuse of the class action system" that should never have been approved and won't stop fees from soaring in the future.
"NRF is filing the appeal to overturn the flawed credit card swipe fee settlement," NRF Senior Vice President and General Counsel Mallory Duncan said in a statement. "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. 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."
According to NRF, there has been no agreement to this settlement by the retail industry. Instead, there's a settlement with nine individual retailers whose views are not representative of the collective industry. NRF also says that 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 (including Target and Macy's), and close to 8,000 retailers and merchants have formally rejected the proposal.
"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 continued.