Interchange Settlement Battle Enters New Phase
Oct. 15, 2012
The battle over the settlement reached this summer in a class action suit charging the card networks and issuers with setting interchange rates in violation of federal antitrust rules enters a new phase this week. Attorneys officially will file the settlement agreement with the court and begin the wait for Judge John Gleeson’s decision on whether the $7.25 billion settlement will receive preliminary approval and continue a legal process that still could take years before any cash payments are made to merchants.
On Friday, ahead of the filing, retailers made a last ditch effort to convince Judge Gleeson through the media that a critical mass of class members and plaintiffs were against the settlement their lawyers negotiated, hoping to short circuit the process . More than half of the original litigants have publicly come out against the settlement, according to a statement from those merchants and merchant trade groups.
“The people asking the court to approve the proposed settlement simply do not represent the interests of most merchants, we do,” said Hank Armour, President and CEO of NACS, one of the plaintiffs of the original legal action that began in 2005. “The proposal represents a minority view and must be rejected.”
Representatives for Visa, MasterCard and the card issuers named in the suit as defendants are confident that preliminary approval will be given and that final approval will follow when the process plays out. Opposition to the negotiated settlement is nothing more than greed, according to Trish Wexler, spokesperson for the electronic Payments Coalition, a trade group representing the payments industry.
“By publicly ‘objecting’ to a settlement that they themselves designed, they hope to create enough noise to secure even more handouts from Capitol Hill,” Wexler said. “This is politically motivated greed and must be seen for what it is.”