Visa and Mastercard Agree to $197 Million Settlement in ATM Fee Class Action

69

Visa and Mastercard have agreed to a $197 million settlement to resolve a class action lawsuit accusing the financial giants of maintaining artificially high cash access fees. The proposed settlement was revealed by the plaintiffs’ lawyers on Wednesday in a filing with the federal court in Washington, D.C.

The lawsuit centers on allegations that Visa and Mastercard’s ATM network rules led to consumers paying inflated access fees. The settlement pertains to consumers who withdrew cash from bank-operated ATMs since 2007.

– Visa will contribute $104.6 million to the settlement fund.

– Mastercard will pay $92.8 million.

In addition to the settlement with Visa and Mastercard, banks involved in the case had previously agreed to settle related claims for $66 million.

Two other class actions remain pending in the same court:

– One involving consumers who used non-bank ATMs.

– Another involving businesses that own independent ATMs.

The settlement follows a decision by the U.S. Supreme Court in April, which declined an appeal from Visa and Mastercard. The companies had challenged a lower court ruling that allowed the plaintiffs to proceed as class actions. Visa and Mastercard argued that the judge had not conducted a “rigorous analysis” before certifying the class actions.

The plaintiffs in the three cases claimed that the ATM network rules of Visa and Mastercard caused them to incur artificially high access fees. Collectively, they were seeking more than $9 billion in damages.

The proposed settlement requires court approval, and members of the settlement class, estimated to include at least 175 million people, will have an opportunity to object to the terms. This includes the amount of the settlement fund and any legal fees awarded.

The plaintiffs’ attorneys described the settlement as providing “immediate and assured relief” to the affected consumers. Visa and Mastercard have denied any wrongdoing as part of the settlement agreement and have not immediately responded to requests for comment.

This settlement is part of broader legal challenges faced by Visa and Mastercard. Both companies are defendants in a separate, long-running legal proceeding in Brooklyn federal court over allegations of overcharging merchants in debit and credit card transactions.

As the settlement process unfolds, consumers impacted by the inflated ATM fees will await further details on the resolution of this significant legal battle.