Mastercard faces £14bn compensation claim

Daniel Fowler
April 20, 2019

The lawsuit, the largest class action brought in the United Kingdom courts and the first under the Consumer Rights Act 2015, is being brought by Walter Merricks, the former financial ombudsman.

A £14billion damages claim against the payment provider was revived by the Court of Appeal.

The Competition Appeal Tribunal threw out the claim two years ago.

If Mr Merrick's wins his claim, everyone entitled to a payout will be given £300 unless they state otherwise.

However, the Court of Appeal has now set aside the CAT ruling and decided that the claimants can have their case for certification of the class action reheard.

And it's not just for those who use Mastercard; it's alleged that anyone who made payments in Britain during that time was hit with disproportionate transaction fees. Anyone who was over the age of 16 and resident in the United Kingdom for at least three months between 1992 and 2008, and who made a purchase from a business that accepted Mastercard could potentially qualify for a compensation.

Mastercard could be forced to pay out £300 to nearly every United Kingdom adult if a £14bn class action lawsuit against the company prospers.

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They ruled the claim was not "suitable to be brought in collective proceedings".

Boris Bronfentrinker, partner at the firm, said: 'Whilst it had been commented that the claim against Mastercard was overblown, the Court of Appeal has today definitively determined the opposite, recognising the need for mass consumer collective actions to be able to be pursued.

But senior judges in London yesterday found the Competition Appeal Tribunal had applied the wrong legal test.

Merricks alleges that Mastercard's breaches of competition law (which were found by the European Commission in 2007) meant that United Kingdom customers paid more on transactions using the card.

"It's now time for Mastercard to admit the damage they did, to apologise to the British public, and to agree to pay the compensation they owe".

The firm also cleared by saying that "this judgment is not a final decision and the proposed claim is not approved to go forward".

But any shop that had accepted Mastercard's steep prices could be due payouts, in addition to customers who had never used the card. Mastercard continues to disagree fundamentally with the basis of the claim'.

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