What You Need to Know About the Visa/MasterCard Merchant Fee Settlement
By Charlie Howard – GCADA
Protect Your Interests, Your Rightful Share is Significant! Be sure to Act Soon!
Perhaps you have already read about this but I think it is worth mentioning just in case. A number of merchants brought a class action lawsuit against Visa/MasterCard related to merchant fees. After lengthy litigation a settlement has been reached and is available for merchants who accepted Visa and MasterCard Credit and Debit Cards anytime between January 1, 2004 and November 28, 2012. At stake is an estimated $6 billion in damages that will be divided pro-rata between merchants. It is estimated that for every $1 million in sales, you are entitled to approximately $800 in damages. For many dealers this could be a substantial sum.
If you’re like me you have received these class action notices in the past announcing that you may be a member of the affected class and may be eligible for an award. These notices are always lengthy and confusing. In most cases the damages available to the members of the class is so small it’s simply not worth your time or effort to complete the paperwork for whatever de minimis award the court decides you are entitled to. This one however, I think, deserves your attention.
Dealers have a couple of options within the next several months:
• Do Nothing – Miss deadlines and receive no money from the Settlement.
• Accept the Settlement Administrator’s ESTIMATE of your damages – These figures will be derived from a three month period from 2008-09. As you will recall these were not particularly good business years, so a sampling from this period in all likelihood would severely underestimate your true damages.
• Reject the estimate and submit your own documentation –This would entail reviewing all of your transactions from 2004-12. With this option you are likely to receive the greatest reimbursement from the Settlement rather than accepting the Administrator’s estimate. The problem is how does a dealer actually sort through nine years of transactions and then present the information in a cogent manner that will persuade the court that these are in fact your damages?
Here is the good news -At the OADA Convention at the Greenbrier in White Sulfur Springs, West Virginia, OADA announced a program whereby they have engaged an experienced third party vendor, MCAG, who can provide dealers assistance with this case. It’s a program that is turn-key for dealers as MCAG does all of the work, ensures deadlines are met, and tracks the filing to completion. MCAG’s fee is based on a contingency basis and they only get paid if they are able to secure more money than the estimate presented by the Settlement Administrator.
If you have not done so already, I encourage you to take a closer look at this program and determine whether it may be a benefit for you. OADA has more on this program as well as a much more detailed description of your options, and various deadlinesat www.oada.com. No matter how you ultimately decide to go, please make sure you investigate all of your options and collect your share of this substantial Settlement. And as always…be sure you meet the required filing deadlines.
