Visa and Mastercard are just two companies ordered to pay over $900m in the latest from a class action lawsuit. Other defendants include JP Morgan Chase, Bank of America, and Citigroup. Much of the settlement and disagreement was around card-swiping fees, ie the banks were over-charging for uses of credit and debit cards, everywhere from major retail stores to smaller mom-and-pop shops. In this iteration of the settlement, Visa will pay an additional $600m, Mastercard will pay another $108m, and the other banks will make up the rest, totaling $900m. That amount is to be added on to the remainder of the lawsuit, which now exceeds $6b. The lawsuit was filed in a U.S. Eastern District Court of New York.
The likes of Target and Starbucks are about to enter round 2 of the heavyweight fight against Visa and Mastercard. The settlement, which is roughly $7.2 billion, will bring an end to 7 years of litigation concerning the credit card companies themselves and big merchants, such as Target, Starbucks, and Wal-Mart. The large merchants are protesting the proposed answer over “swipe fees” that they are ordered to pay in return for granting their customers quick service to their credit cards. The underlying issue is that the nearly 8 million merchants are saying the deal is unfair for them, claiming the credit card companies are in bed with the banks and are focused on monetizing with no regard for business. The economics of the settlement are also in question, as well as the $550 million tied up in a preliminary deal between the two parties poised to stop the bleeding.
Hells Angels, the infamous motorcycle group from southern California, are filing suit in federal court against the United States. The dispute stands over the US’s ban of foreign members of the gang entering the country. Members of the Hells Angels have been convicted of multiple crimes, including drug trafficking, extortion, and other felonies in North America, South America, Europe. The U.S. has classified the Hells Angels as a “known criminal organization,” but due to the suit the government is in the process of fielding the request for an injunction in which they cannot associate the Hell’s Angels with violence and crime.
Retailers and credit card issuers settled last week on terms that will allow vendors to apply surcharges to customers who choose to pay by credit. The additional charge, if implemented, will be used to compensate for small fees the vendor assumes for processing the transaction. This charge can typically range from 1.5 to 3 percent of a purchase when using plastic. And while most merchants are not expected to take advantage of the ruling, don’t expect the ones who do to exercise the same power that several Long Island gas stations have demonstrated.