Interchange Fee Litigation

Overview

The Payment Card Interchange Fee and Merchant Discount Antitrust Litigation is a United States class action lawsuit filed in 2005 by merchants and trade associations against Visa, Mastercard, and numerous financial institutions that issue payment cards. The suit alleges price fixing and other anti-competitive trade practices in the credit card industry. A proposed settlement received preliminary approval from the judge overseeing the case in November 2012, but was ultimately overturned by the appellate court.

The New Proposed Settlement

There is currently a proposed settlement in the lawsuit that includes a cash pool that exceeds $5.5 billion.. Under the proposed settlement, merchants who accepted Visa or Mastercard anytime from January 1, 2004 to January 25, 2019 will be entitled to settlement proceeds.

Under the terms of the proposed settlement, an individual merchant’s entitlement would be determined by a number of factors that include: (i) interchange fees paid by the merchant during the relevant period, (ii) number of dismissed plaintiffs, (iii) claim submission rates by the class, and (iv) legal and administrative fees to be paid from the settlement fund.

Timing for any payment is uncertain and may take several years. A number of steps must first occur. Currently, class members that have filed objections to the settlement are appealing the district court’s granting it approval. Only if and after the appeals have been resolved in favor of approving the settlement, will class members be given a date by which to submit claims, and only after the claims filing deadline passes will the payment calculation and payout process begin.

For the full terms of the Settlement, you should look at the Superseding and Amended Definitive Class Settlement Agreement of the Rule 23(b)(3) Class Plaintiffs and the Defendants and its Appendices (the “Class Settlement Agreement”), available here.

How It Works

Lake Whillans will purchase your company’s entitlements to any proceeds that you may receive from the Visa Mastercard class action. This enables your company to receive payment today rather than waiting to receive an uncertain amount on an uncertain date in the future. We will submit the claims on your behalf and work directly with class administrators to secure payment. The effort required on your part is minimal.

The Process

1. Based on your company’s revenues, we can quickly provide an estimated amount we would be willing to pay for future amounts your company may receive for its Visa Mastercard claim.
2. If you and Lake Whillans are mutually interested in pursuing a transaction based on that estimate, we will enter a non-disclosure agreement and request more specific information including revenues derived from credit card transactions or interchange fees paid during the relevant period.
3. Lake Whillans will then make a firm proposal to purchase some or all of your company’s claim entitlements.
4. If you accept the offer, we document and execute the transaction.